Gold Is Surging Tonight, And One Analyst Says It's Now In The Sweet Spot

So the story of the day is this: Bernanke came out and sounded dovish this evening, for reasons which we've explained here.

Markets are rallying, interest rates are down, the dollar is falling, and gold is jumping nicely.

From Kitco:

Of course, gold has been getting massacred for the last couple of months, so it's coming off of a weak spot, but still a nice night for gold owners.

In a note out tonight, Mike O'Rourke of JonesTrading argues that gold is now in the sweet spot, and that Bernanke has lost any tapering credibility:

We don’t believe the Chairman’s intentions have changed. Regardless, the Chairman’s credibility is once again damaged. If the Dollar breakdown continues, it will be a sign that the market believes the Chairman has again lost control over policy. The asset clearly in the best position in such an environment is Gold. After such a notable correction in the past 9 months, the precious metal once again becomes a very attractive global asset if monetary policy in the largest economy of the world spins out of control.