Can Gold Continue To Rise, Since The Usd Is Moving Higher Too?
Commodities / Gold and Silver 2016 Oct 24, 2016 - 06:50 PM GMTBy: Robert_Alexander
That question and other ones similar to it keep coming up lately and understandably so. Gold usually drops when the USD rises, but lately we do see both rising at the same time. I called a low in Gold recently and have been trading in the Precious Metals sector, but some are having a hard time believing it when they see the USD rising too. Allow me to share my thoughts on this. The following 4 charts are from the weekend report, where I tried to help my readers see the answer that question.
GOLD AND THE USD
CHART #1 -The USD has slowly been approaching the Highs of 2015. The chart does look quite bullish, but it does also show prior lows being taken out and lower highs so far.
CHART #2 – Please notice the triple top in the USD that formed back in the 2000 – 2002. This is when Gold was bottoming and began moving higher. Do we see that now?
CHART #3 – Lets Zoom in on the USD so we can see the triple top forming in 2000 – 2002. It looks somewhat similar to what we see the USD doing now, I see divergence. I want to zoom in closer to show you 1 more important fact.
CHART #4 – Zooming in on the USD WKLY chart of 2001 & 2002 overlayed with Gold. During that 2001-2002 $USD triple top you will see that at that time Gold ignored the Dollars rise and they actually both ran higher together. See the Orange Box .
That was on the 3rd top. Might we be forming a 3rd top now?
So what does history show us here? ” Can the USD and GOLD really move higher together?”
Yes, they can, and we see that it actually has happened back in 2001-2002″.
Conclusion: I had to answer this question, because I called a bottom in Gold recently and have been posting charts of bullish looking Miners and opportunities to make some gains in this sector. There will be pullbacks along the way, so you do want to be able to get in while price is closer to the lows. With the $USD rising, some are hesitating. They do not believe that Gold can move higher along with the USD, so that question came up often. I hope this research helps you to gain a little more confidence in your Precious Metals trading. Things will need to be monitored going forward obviously, but for now I am Bullish on the precious metals sector and called a low using Cycles, Sentiment, and technical analyses. If you think that a little extra research can help you in your trading, why not sign up for a month or a quarterly membership and add my findings to your trading style?
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By Robert Alexander,
My name is Robert Alexander, but I’m probably better known as ‘Alex’ in trading forums. I’ve been a full time trader for well over a decade and began trading in the late 1990s while working in management and sales at a well-known aerospace company. As my style evolved, so did my success, and it allowed me to leave corporate America to pursue my passion and trade full time.
© 2016 Copyright Robert Alexander- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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