No capitulation event - No relief rally
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.