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General Market Commentary
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General Precious Metals
The Dollar & Gold: This is the What We've Been Looking For
The Dollar & Gold: This is the What We've Been Looking For
Written by Gerardo Del Real
The dollar continues to surge. As of Friday November 18, 2016 it climbed to its highest level in nearly 14 years.
U.S. economic data meanwhile continues to support a rate rise in December. An expectation of fiscal spending and tax cuts from a Trump administration is contributing to higher-than-expected inflation expectations.
I’ve repeatedly warned that a stronger dollar would impact precious metals prices in the last quarter of 2016 — and possibly the first quarter of 2017 — and would provide excellent entry points into the best juniors.
I believe we are in the middle of that correction. I believe the dollar continues higher for several months and I believe the correction in gold and silver prices continues.
Gold closed down for the second straight week, trading in the $1206 range, a 1% loss for the week. The close is the lowest since February. I cautioned that the bulk of gold’s gains this year came in the first quarter and that if gold couldn’t break out it would break down.
The breakout met resistance despite Brexit, the election, and a myriad of events in between. Expect lower prices in the short term.
In the mid-long term, we’ll look back at the next three months as an excellent opportunity to maximize gains over the long term.
Silver was down approximately 4.5% for the week, trading in the $16.60 an ounce range.
Copper held up, trading down just 1% for the week and closing at approximately $2.48/lb.
Platinum and palladium went in opposite directions, with platinum losing approximately 2.1% this week, closing at approximately $923 an ounce, while palladium put up a weekly gain of approximately 5%, closing around $718 an ounce.
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