• 12 hours Is This The World’s First Truly Democratic Stock Exchange?
  • 15 hours India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 18 hours First Quarter Profits Slip For World's Top Oil Companies
  • 20 hours The Yuan May Be China's Biggest Weakness
  • 1 day Hedge Funds Having A Banner Year
  • 2 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 2 days BHP Turns Bullish On EVs
  • 2 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 2 days The $90M Inflatable Rabbit Redefining Modern Art
  • 3 days Huawei’s Fate In The Air
  • 3 days Tesla Slashes Prices Again
  • 3 days The Modern History Of Financial Entropy
  • 3 days Italy’s Central Bank Embraces Sustainable Investing
  • 4 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 4 days Researchers Push To Limit Space Mining
  • 4 days Could China Start Dumping U.S. Treasury Bonds?
  • 4 days Is Winter Coming For HBO?
  • 5 days Rise Of EVs Signals Peak Gasoline
  • 5 days Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 6 days Gold Mining Stocks Stuck In Limbo
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

  1. Home
  2. Markets
  3. Other

Gold and Silver Update

London Silver Fix Price: $14.11 (-$0.18 on week)
NYMEX Spot Price: $14.07 (-$0.12)
US Dollar Index: 100.08 (+0.48)

Silver RSI: 29.07 (+1.76) (70 overbought/30 oversold)
US Dollar RSI: 71.07 (+2.53) (70 overbought/30 oversold)

RMAR: 0.98 (+0.01) (1.30 overbought)
SLI: 0.670.68 (+0.01) (1.80 overbought)
GOLD SILVER RATIO: 75.25 (-0.77) (15 overbought)

(This is a copy of the latest weekend update sent to subscribers)

The battle lines are drawn and the fight for supremacy is drawn out along two lines.The first is the 100 line on the US Dollar Index. Since the 13th November, the dollar has meandered between 99 and 100 trying to push higher. The dollar now has reached the same level achieved in March 2015. The ingredients are there for a major double top as the RSI meanders in the low 70s and gold enters deeply oversold territory in terms of the dollar. By that I don't mean the usual technical indicators, but one I created recently which I call the Gold Leverage Indicator and which measures how gold performs in relation to the US Dollar Index. It measures that performance over an extended period and the graph is shown below with gold shown in green.

Monthly Chart

As you can see, the spikes and troughs over forty years tell a story of the dollar and gold going in opposite directions. However, though this gold leverage indicator does not seem a good tool for spotting tops in the gold market, note that it is currently at a bottom which has only been outdone by the lows of 1984 when gold hit the skids after the crash of 1980. Moreover, it is now at a bottom that has only been matched by another low in 2000, and we know what happened after that. According to this graph, gold cannot really go much lower against the US Dollar and the only direction is up.

Meanwhile, the gold price has finally hit the second battle line which is the lower line of the channel it has bounced around in since late 2013. Previous form suggests it does not hang around here for long and bounces back upwards. But channels are there to be broken out of, gold will not stay inside it forever. If the US Dollar Index significantly breaches 100, gold will break out of the channel and head south (or at best it would just follow the channel line downwards). If this is a US Dollar double top, then the next gold target is $1200 at the upper line.

Weekly Gold Chart

As for silver, as said before, it is well above its channel bottom and continues to test its previous low of $13.97. For the time being, we will use the clearer dollar and gold metrics, knowing that silver will follow gold.

Weekly Silver Chart

 

Back to homepage

Leave a comment

Leave a comment