U.S. Dollar Index Impact on Precious Metals

By: Ronald_Rosen

Since there is so much concern and conviction that the U.S. Dollar is about to collapse and the precious metals complex is about to rise sharply, let’s take a close look at where the Dollar Index has been, what if anything in the precious metals complex it has influenced, and where it may be going.

                                                DOLLAR INDEX QUARTERLY

When the Dollar Index made a monthly low the HUI made a monthly high.

                                                              DOLLAR INDEX MONTHLY

                                                                     HUI MONTHLY

When the Dollar Index made a monthly low silver made a monthly high.

                                                                          SILVER MONTHLY
When the Dollar Index made a monthly low gold made a monthly high

                                                         GOLD MONTHLY
It appears that the direction of the Dollar Index has a strong influence on the direction of the HUI, silver, and gold. Let’s see if we can find any clues as to the future direction of the Dollar Index.

“Triangle patterns are usually susceptible to definite and dependable analysis, with the proviso that the investor must wait for a reliable, as opposed to a premature, breakout. Bulkowski advises that, in general, the failure rate for triangles drops significantly if the investor waits for a valid breakout and, once that breakout occurs, the pattern proves strongly reliable.”            www.trending123.com

Perhaps the Delta turning points can give us a reliable indication as to which direction the breakout will occur, up or down.

                                      DOLLAR INDEX MONTHLY

A close look tells us that the MTD turning points for the Dollar Index have been reasonably accurate and have consistently told us what the next direction for the Dollar Index will be. It appears that the Dollar Index will be moving up to MTD # 6 high. MTD # 6 high is due to arrive December 22, 2010 (12/22/10). The Standard Deviation for arrival of MTD # 6 high is from 12/8/2010 to 1/5/2011.
                    
                           DOLLAR INDEX WEEKLY WITH MTD POINTS

One more move up for the Dollar Index seems to be written in “Delta turning points” and will to a high probability be accompanied by declines in the HUI, silver, and gold.

This, in spite of all the bullish talk for the HUI, silver, and gold! I rest my case.

                 DOLLAR INDEX MONTHLY WITH DELTA LTD POINTS

               
                             Stay well,
                             Ron Rosen

Subscriptions to the Rosen Market Timing Letter with the Delta Turning Points for gold, silver, stock indices, dollar index, crude oil and many other items are available at: www.wilder-concepts.com/rosenletter.aspx

By Ron Rosen

M I G H T Y I N S P I R I T

Ronald L. Rosen served in the U.S.Navy, with two combat tours Korean War. He later graduated from New York University and became a Registered Representative, stock and commodity broker with Carl M. Loeb, Rhodes & Co. and then Carter, Berlind and Weill. He retired to become private investor and is a director of the Delta Society International

Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen and Alistair Gilbert  Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen and Alistair Gilbert are not registered investment advisors. Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen and Alistair Gilbert cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.

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