Dollar is still the driver for gold.
Commodities are still in a downward trend and haven’t broken out.
Global financial stability risks will bring some currencies down and boost the dollar.
I know there will be some who disagree, but the current gold bull run is nothing more than a rebound in commodities overall as a weaker dollar has taken center stage. Enjoy it while you can.
Despite Recent Bounces, Commodities Are Still in a Downward Trend
The following charts show the short-term 3-month picture of various commodities (gold, silver, oil, natural gas, corn) and the 4-year downward trend that is still intact despite the recent bounce.
As you can see from these various commodity charts, they are moving hand in hand with the dollar. If I am going to make the case that gold can still fall, along with these other commodities, then I have to convince investors that the dollar will rise in the near future. To do this, one has to understand that the dollar represents primarily the euro, yen and pound which make up 83.1% of the dollar. These currencies by default would have to collectively fall if the dollar is going to rise. So why would they?
Doug 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
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