Can Gold Price Continue To Rise As The US$ Moves Higher Too?

October 24, 2016

That question and other ones similar to it keep coming up lately and understandably so.  Gold usually drops when the USD rises, but lately we do see both rising at the same time. I called a low in Gold recently and have been trading in the Precious Metals sector. However, some investors are having a hard time believing it when they see the USD rising too.  Allow me to share my thoughts on this. The following four charts are from the weekend report, where I tried to help my readers see the answer to that question.

Gold And The USD  

CHART #1 -The USD has slowly been approaching the Highs of 2015. The chart does look quite bullish, but it does also show prior lows being taken out and lower highs so far.

CHART #2 – Please notice the triple top in the USD that formed back in the 2000 – 2002. This is when Gold was bottoming and began moving higher. Do we see that now?

CHART #3 – Lets Zoom in on the USD so we can see the triple top forming in 2000 – 2002.  It looks somewhat similar to what we see the USD doing now, I see divergence.  I want to zoom in closer to show you 1 more important fact.

CHART #4 –  Zooming in on the USD WKLY chart of 2001 & 2002 over-laid with Gold.  During that 2001-2002 $USD triple top you will see that at that time Gold ignored the Dollar’s rise and they actually both ran higher together.  See the Orange Box.

That was on the 3rd top.  Might we be forming a 3rd top now?

So what does history show us here? ” Can the USD and GOLD really move higher together?” 

Yes, they can. Moreover, we see that it actually had happened back in 2001-2002″.

Conclusion: I had to answer this question, because I called a bottom in Gold recently - and have been posting charts of bullish looking Miners and opportunities to make some gains in this sector.  There will be pullbacks along the way, so you do want to be able to get in while price is closer to the lows. With the $USD rising, some are hesitating.  They do not believe that Gold can move higher along with the USD, so that question came up often.  I hope this research helps you to gain a little more confidence in your Precious Metals trading.  Things will need to be monitored going forward obviously, but for now I am Bullish on the precious metals sector and called a low using Cycles, Sentiment, and technical analyses. 

If you think that a little extra research can help you in your trading, why not sign up for a month or a quarterly membership and add my findings to your trading style.

Pure gold is so soft that a strong man can squeeze it and shape it.