Is President Trump’s Tweet About Oil Prices Really About The US Dollar (Gold & Silver By Extension)?

Another warning to OPEC, but is this really about oil, or is the ESF about to weaken the dollar, which will affect oil (and gold & silver) prices?

First of all, our economy is doing great!

But don’t take Ol’ Half Dollar’s word for it, see for yourself:

Apparently nobody has any of those “new, high paying jobs”, because just 3 minutes later, we learn the price of oil is just too darn high!

Which one would think wouldn’t matter, since crude oil prices aren’t even anywhere near 100 bucks a barrel, and in a “great and very vibrant” and “only getting better” economy, it would seem that an oil price of $70 could easily be absorbed by the economy, couldn’t it?

That’s not my main point.

Moving on.

Here’s my point, and I’ll pose it as a question: What is President Trump really saying?

I ask that because if President Trump is saying what I think he is, gold and silver are about to take off in price again.

You see, I think President Trump is saying that Stevie’s Exchange Stabilization Fund is about to weaken the dollar, and if the ESF does that, it means crude oil prices are going to rise.

Let’s see what this looks like on a chart.

Here’s a chart showing the prices of crude oil and the dollar index:

Comparatively speaking, oil prices are not that high, but that’s not the point I want to make. That is a “3 day chart” above, which means that each candle represents 3 days of trading. I use a chart like this one to show many years on the same chart. In the chart above, we can see crude oil and the dollar index going back 10 years.

And what do we see?

We see the dollar and crude oil generally move the inverse of each other.

That is to say, when the dollar goes up, the price of crude oil comes down, and when the dollar goes down, the price of crude oil goes up.

Zooming in a bit, we can see the the dollar is starting to look like its next move is down:

Remember, I have been saying that if we put in a new lower-low, the chart above would begin to look bearish, and as of last night and into this morning’s trading action, it is clear that we have put in a new lower-low, and that gives us a clear pattern in development of lower-highs and lower-lows, which indicates a bearish trend.

In other words, it seems the dollar is going lower.

If the dollar is going lower, oil prices are going higher, and so we see President Trump setting up the blame for OPEC when oil prices rise as the dollar falls.

OK, “Great Half Dollar, but what does this mean for gold & silver?”.

Good question.

Check out the dollar’s correlation to gold:

At times the dollar and gold can move together, but generally speaking, they move the inverse of each other. This is especially true of the last several years. Now, if I’m right about the dollar going down, then following the recent trends of late, gold will be moving up in price.

Silver is a little harder to see in terms of the correlation, but remember, if the government and central banks publicly hate gold, they really hate silver, even more so than gold, because silver is the money of, and the power of, the people.

Bankers, politicians and the government in general hate the people, and bankers, politicians and the government especially hate it when the people have any power.

So the dollar compared to silver looks like this:

Let’s review.

1.Trump says OPEC “must get prices down now!”. What the President is really saying is that oil (gas & diesel) prices are about to go up, because the ESF is now planning on weakening the US dollar, and when the dollar weakens, oil prices go up. That’s my working theory. By lashing out at OPEC, Trump is going to divert attention away from the falling dollar being the cause of rising oil prices and cast the blame on a cartel, the oil cartel known as OPEC.

2. By extension, as the dollar moves lower, the prices of gold and silver will rise as they move the inverse of the dollar index.

3. Most importantly, we may be on the cusp of the violent move higher in gold & silver prices everybody keeps talking about because of the speculator short positioning in both paper gold & paper silver. That is to say, if the dollar falls, and if gold & silver rise in price, the short squeeze will have to begin at some point.

There is a wildcard: The whole “Chinese are controlling the gold price” theory. If the dollar begins to drop as measured in the DXY, what does that mean for the yuan-dollar/yuan-gold peg?

It looks like we’re about to find out.

Stack accordingly…

– Half Dollar


 

About the Author

U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at PaulEberhart.com. Paul’s Twitter is @Paul_Eberhart.

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