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Gold/Silver: The ultimate reserve currency

Commentaries & Views

The surge this week in gold and silver with gold reaching a new all-time high has made it appear that the Fed has little concern about the long term damage that it is creating at the expense of the U.S. Dollar. I found this latest Fed meeting particularly interesting that there was no mention of the U.S. Dollar as if they don't care about yours and mine purchasing power. I guess the old saying goes "out of sight, out of mind," and the Fed shows little concern about the imminent rising inflation on the heels of record debt accumulation, increasing geopolitical tensions, and uncertainty as to when a restart of the economy will get going.

With precious metals showing the sharpest capital inflows since the financial crisis, this strategy of holding a mix of gold and silver should help offset the debasement of the dollar over the foreseeable future. For those of you who have not seen a chart of the U.S. Dollar, this is a tradable futures contract listed on the ICE exchange.  If you did not receive the new edition of our free "Gold Trends Macro Book," it has been updated with currency slides. This monthly updated booklet will provide you with all the quantitative analysis of the precious metals markets. You can request yours here: Free Gold Trends Macro Book.

Dollar Index Daily Chart

Daily Gold Chart

Because of the inverse correlation that we see between the U.S. Dollar and the gold market (-.97%), we can use any up day in the U.S. Dollar as possible entry points into building longterm positions in the gold market along with silver. Our view continues to strengthen with the next upside price objective on gold to be $2500/oz. and silver at $30/oz. We have been extensively covering the technical backdrop of the gold market in the Blue Line Futures Morning Express Research Reports so be sure to stay up to date on the developments by registering for a Free two-week trial by clicking on the link here: The Blue Line Express Two-Week Free Trial Sign up

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.