We got our answer on the micro level today when we saw the dollar fall below 94 on the index. You will recall yesterday that the dollar resuming its move lower would be bullish for the metals and today we saw that happen and gold move up $13 for most of the day and while silver was up 50 cents early it still eked out a 35 cent gain to close at 17.45. Gold closed in the $1,278 range after hitting a high of $1,280.60.
Watch the dollar for micro clues still and it seems we have to lean long based on today’s price action.
However, overall stock market weakness today may continue and whatever the price of gold does, mining stocks may be in for a bit of a fall if the overall market continues lower.
Why I Am Eventually Dollar Bullish Which Will Put Pressure On Gold
My reasoning for eventual dollar bullishness again, after this current dip lower (into the low 90’s so far), is the same reasoning I have had the last few years where I have said the stronger dollar could put pressure on the metals and has. It’s because of the Debt to GDP ratios of over 71% of the dollar represented by Europe and Japan is worse off than the U.S. and the banking situation in Europe for some of these countries is on the brink (Japan we know is unsustainable with current structure too). Throw in a Brexit or Grexit and/or Italian/Portugal banking fiasco (on the brink?) and what will the Euro do? Just trying to read the tea leaves across the pond.
A heavy load – Italy’s latest attempt to stabilise its banking system
Portugal bank situation needs fixing
Brexit could ‘unravel’ EU, warn former US security advisers
Olivier Blanchard eyes ugly ‘end game’ for Japan on debt spiral
Related posts
About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.