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Commodities / Commodities Trading May 09, 2016 - 02:11 PM GMT

By: Chris_Vermeulen

Commodities

Traders who follow the price of gold and silver, should keep an eye out on the U.S. dollar index. The dollar has been within a trading range for more than a year. During December of 2015, the dollar rose to test the highs at 100, however, since February of 2016, the dollar has been in a downtrend, as shown in the chart below.

The FED has reduced the expectations of a rate hike in 2016 from one full percentage point, in the beginning of the year, to a half percent and perhaps to none at all. However, my expectation is that the FED may have to start rolling back this increase before the end of 2016.


The bullishness in the dollar was sparked by expectations of a change in the monetary policy of the FED. Market participants believed that the Zero Interest Rate Policy, NIRP, would end and that the rates were on an upward trajectory.  However, world economic conditions have deteriorated since the beginning of 2016 and the ECB and BOJ both responded with Negative Interest Rates, NIRP and more QE. Consequently, the FED was forced to delay their rate hikes.

Last week’s shot term breakdown of the dollar, below the critical support of 93, was a bearish sign which can bring the dollar further down to the 86 levels. But the dollar posted a solid rally by the end of the week to regain that critical support level for the time being.

Although gold is a commodity, it is used as a hedge against ‘uncertainties’ and ‘crisis points’ which gives it a different edge. Gold, also behaves differently because of its’ usage as money, as ‘a store of value’, for many centuries for both individuals and countries.

Due to the ‘meaningless’ monetary policies of the various global Central Banks, gold will follow its’ unique behaviour. I have explained this earlier and my models have been very timely in forecasting the turning points.

Gold will have a one-way move higher with many corrective phases on its’ impulsive new uptrend, therefore, I always keep my subscribers immediately informed so as they know when to make the next profitable trades of both gold and silver. The next trade I feel is just around the corner.

Get My Daily Live Price of Gold Market Analysis, Forecast & Trade Alerts: www.TheGoldAndOilGuy.com

Chris Vermeulen

Join my email list FREE and get my next article which I will show you about a major opportunity in bonds and a rate spike – www.GoldAndOilGuy.com

Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com.  There he shares his highly successful, low-risk trading method.  For 7 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets.  Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

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