Gold under $800, Go UUP

Strong Dollar, Gold gets crushed.  Let it fall, as Yamana (NYSE:AUY) and the other gold stocks fall its even better for when the masses start to cash out of American bucks and U.S. financials then repeat the cycle again.

Yamana Gold is almost back to when we called it out as a bounce play on Monday (Yamana Gold (AUY): Bounce Play?), sure enough it went back up to $11 and today its back to $9 and change.

The dollar has been on fire, we told you about PowerShares DB U.S. Dollar Index Bullish  (AMEX:UUP) on Aug 5th - Come on US Dollar, Come on PowerShares US Dollar (UUP)

Time to be careful here as the talking heads will next say the dollar sucks, oil heads back up and then it will be time to buy gold again.

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If that's the case, what to buy?

How about two plays:

1. Canada's great Oil Sands company - Suncor Energy Inc. (NYSE:SU).  We'll follow up Suncor with an article later today.

2. Don't want to risk it all on one gold company? Don't, go with the money gold ETF, SPDR Gold Trust (ETF) (NYSE:GLD)

Here's the latest on the gold crap:

LONDON (AFP) — Gold prices tumbled underneath 800 dollars per ounce on Friday, hitting a ten-month low point as the precious metal was hampered by the strong US currency and weak oil prices, analysts said.

On the London Bullion Market, the price of gold slid to 772.98 dollars per ounce. That was the lowest point since the end of October.

Gold, which is used in jewellery, dentistry and electronics, has shed one quarter of its value since striking a record high of 1,032.70 dollars in March.

In the foreign exchange market on Friday, the European single currency sank to 1.4698 dollars -- the lowest point since February 20.

A spike in US consumer price inflation (CPI) on Thursday sparked talk of Federal Reserve interest rate hikes, which could make the dollar more attractive to investors and therefore boosted the greenback, dealers said.

"Sentiment has turned more bearish across the metals spectrum (on Friday) after yesterday's CPI reading triggered speculation the Fed may raise interest rates in order to cap inflation," said BullionDesk analyst James Moore.

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"Gold has broken below 800 dollars per ounce, platinum has traded to its lowest since December, silver has slumped almost 15 percent, while palladium has dipped to its lowest in almost two years."

A stronger US currency tends to reduce demand for dollar-priced goods, like gold and oil, which become more expensive for buyers holding weaker currencies.

At the same time, gold is regarded by investors as a sound defence against inflation, which in many countries is driven by soaring crude prices.

But oil prices have fallen heavily sharply in recent weeks on mounting fears over slowing global growth and lower demand, traders said.