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Takeaway: If the US dollar continues to head lower, you can expect $GLD to continue making all time highs over and over again.

Since 2008, gold has enjoyed the fruits of Ben Bernanke’s labor. The Federal Reserve has been engaged in devaluing the dollar and driving up commodity prices for years now, much to the chagrin of investors who are hooked on gold. Every time the Federal Reserve announces a new round of extension of quantitative easing, gold heads higher and has continued to do so since QE1 started in November of 2008.

GOLD: Where Do We Go From Here?  - QE goldchart

However, things could be taking a different turn now that the investing public has caught on to how the QE gold trade works. If you look at the above chart, you can see that up until September of 2011, gold’s meteoric rise was predictable and much of the same. But when the Fed extended lower rates back in January of this year, gold popped a bit then fell off and continued to do so right up until this month when Bernanke’s Jackson Hole meeting.

Seeing as how we’ve already enjoyed our Jackson Hole pop, the question remains: where do we go from here? Here’s what Keith had to say about gold (specifically, the GLD ETF) yesterday:

If the US Dollar falls again from here and Gold recovers this morning’s losses to make higher-all-time-highs, I’ll likely cover my short position in GLD. If it doesn’t, well, I guess that’s not going to be my problem.”

Gold is really at a turning point at this moment. It’s either going to continue its post-Fed activity rise and will continue making all time highs or correct and fall off a cliff if the dollar manages to recover and strengthen. With November’s election fast approaching, a lot of catalysts lie in wait. Our immediate term risk range for gold is currently $1731-1762. You can rest assured we’ll be keeping a close eye on everyone’s favorite metal this week.