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No capitulation event - No relief rally

Commentaries & Views

Relative USD strength persists; as the dollar rises in tandem with the 10 year yield, asset prices will likely continue to be pressured, but whether or not this will translate to falling prices in the "real economy" remains to be seen. The monthly chart below shows the rise in the DXY, currently approaching resistance. A sustained breakout to the topside would keep that pressure up. A breakout and reversal back down in the DXY however (a false breakout), may yet coincide with an abrupt selloff and reversal in metals and indices.

Whereas major US indices have in-fact gone on to make lower lows (which should have contrarian bulls stopped out for now), gold has not gone anywhere lower than the $1,850 printed last week. Although this doesn't hold much weight for now, it is worth keeping the thought that gold maybe sniffing out a short term top in the USD, on the backburner.

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.