"The swell of bullishness toward gold has spilled into the mainstream. 'Gold's Got the Touch Again,' says The New York Times. 'Goldbugs Rejoice!' proclaims the Financial Times. 'Take a shine to gold,' urges a financial columnist. The 10-day Daily Sentiment Index of gold traders has pushed to 73.9% bulls, a level commensurate with previous market highs. One group that is not bullish on gold is the smart-money commercial hedgers, who now hold their largest net short position (-72,703 contracts) since the yellow metal was at $418 in February 1996 (-98,449 contracts.) So the smart-money has been selling into this rally. This should turn out to be a sound decision, as the Elliott wave pattern from the February 16 low ($253.50) retains a clearly corrective look. Wave (2) should be contained by resistance of $320-$325. Wave (3) down should carry gold below $250. The alternate count allows for a sharp spike to about $350."
It's the media coverage that tips the scales for me in favor of EWI.
The dollar wave count is much clearer to me, and points to at least one more rise before the dollar dies. While a rise in the dollar doesn't necessarily mean a drop in gold, it doesn't help the near-term gold bull argument. And ISI's liquidity index (M3 + commericial paper) has gone negative, which means actual deflation, not just disinflation.
The dollar is so important to the entire world, the players will not let it die that easily. There will be several massive efforts to prop it up before it dies.