We’re going to have a look at the dollar today, something that should
continue to help commodities, as it appears our currency could be in
the early stages of a longer-term decline. Provided below is a weekly
chart of the U.S. Dollar Index, and as you can see, it continues to find
its way below its 3X3 DMA (blue). That’s not a good sign for the dollar
on a near-term basis.
It doesn’t mean it’s going down in a straight line, but based on what we’re seeing here, it sure continues to look like a sell the rips and buy the dips scenario. And, it’s important for everyone to remember part of Trump’s plan throughout his entire campaign was to win the currency war with respect to foreign trade. In other words, he continued to blame foreign countries for de-basing their currency to help their exports, something that likely appears to be in the early stages here at home now.
This brings us to gold now. Provided below is an isolated weekly chart of GLD, the primary ETF tracking the price of gold, along with all of the moving averages we like to use, both displaced and simple moving averages. As you can see, we’ve circled what looks to be an extremely major battle of the averages right now. Meaning, they’re all converging to almost a single point. You won’t see that very often on any chart. Look around and you’ll see what we’re referring to.
You can also see the first time it appeared GLD was going to break above its 200 day simple moving average recently (orange line), it failed. However, it looks to be gunning for that major average again, all while we could be getting some follow through on some nice recent technical crosses. If that ends up being the case, it’s very possible gold could be in for much higher levels ahead, which would continue to suggest nice returns in a bullish leveraged gold vehicle like UGLD.
What’s the takeaway today? It appears gold continues to be worth owning, and we definitely think there isn’t all that much more downside left for commodities as a whole on a long-term basis. There’s no question stocks are still the place to be right now, but commodities do continue to look pretty attractive for the long haul based on we continue to see take place from both a technical and fundamental perspective.
It doesn’t mean it’s going down in a straight line, but based on what we’re seeing here, it sure continues to look like a sell the rips and buy the dips scenario. And, it’s important for everyone to remember part of Trump’s plan throughout his entire campaign was to win the currency war with respect to foreign trade. In other words, he continued to blame foreign countries for de-basing their currency to help their exports, something that likely appears to be in the early stages here at home now.
This brings us to gold now. Provided below is an isolated weekly chart of GLD, the primary ETF tracking the price of gold, along with all of the moving averages we like to use, both displaced and simple moving averages. As you can see, we’ve circled what looks to be an extremely major battle of the averages right now. Meaning, they’re all converging to almost a single point. You won’t see that very often on any chart. Look around and you’ll see what we’re referring to.
You can also see the first time it appeared GLD was going to break above its 200 day simple moving average recently (orange line), it failed. However, it looks to be gunning for that major average again, all while we could be getting some follow through on some nice recent technical crosses. If that ends up being the case, it’s very possible gold could be in for much higher levels ahead, which would continue to suggest nice returns in a bullish leveraged gold vehicle like UGLD.
What’s the takeaway today? It appears gold continues to be worth owning, and we definitely think there isn’t all that much more downside left for commodities as a whole on a long-term basis. There’s no question stocks are still the place to be right now, but commodities do continue to look pretty attractive for the long haul based on we continue to see take place from both a technical and fundamental perspective.
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