As mentioned last week by Jesse Crossroad Cafe,
many commodities and especially precious metals appear to currently be the inverse trade of the DXY or fiat US dollar vs other major fiat currencies.
US Dollar ‘Strength’
This morning the US dollar is up and precious metal spot prices are of course down for now.
As for US dollar strength talk, most of you probably get paid in them so relax.
It is also important to remember that $ strength measurements are typically fiat vs fiat.
The following is an old but good evergreen chart on said point…
GOLD testing $1,200 oz USD
It is looking like we will be testing $1,200 oz Gold today and into this week.
Below is a chart of gold spot price in US dollars over the past 3 to 4 years or so.
Bullish COT reports be Damned
Of course most precious metal bulls are looking at the COT reports expecting some sort of reversal rally to intervene.
Here are your current COTs in gold and silver close up and backed out for the entirety of the 2000s.
CPI Report this Friday
Garbage data in garbage data out, otherwise known as the Bureau of Labor Statistic’s Consumer Price Index aka CPI… is due to be reported this coming Friday.
If you want to nerd out on all the financial reports for the week ZeroHedge has scrapped much of the commercial bank’s coverage here, have at it.
Real price inflation in major cities for goods and services people actually need, continues at around 10% and has been picking up over the past few years according to some.
This Friday’s BLS CPI report will likely move markets short term.
Waiting and hoping on some ETF miracle, Bitcoin is now sucking wind again falling below $7k and technically looking like it could half in the medium run.
Even one of its chief trading proponents is now tweeting out bearish chart patterns for the end of 2019 followed by bearish COMEX gold price tweets.
— Peter Brandt (@PeterLBrandt) August 5, 2018
After a small fake-out rally on Friday, #Gold daily chart now squarely back in bear camp for swing trade (assumes close Monday <1213) $GLD $GC_F Of course this is paper Gold so it does not count pic.twitter.com/wmmekPLx1c
— Peter Brandt (@PeterLBrandt) August 6, 2018
Gold Could be $1000 or $1400 oz USD by the end of the Year
If you missed Brent Johnson’s video on his US dollar milkshake theory last week, you can find it bottom half of this post here.
As for his reasoning in 24 tweets as to why he put on a gold trade last week and almost puked, well the reasoning is here for you to see as well.
His point about medium term gold price action in US dollars is valid, if you’ve been paying attention.
All for now, have a great week. North American readers, enjoy the long days and great weather outside while they last.
About the Author
James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.