Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Weaponizing the Dollar; Gold Mining Stocks Chart Path to Breakout

Commodities / Gold & Silver 2019 Dec 17, 2019 - 05:28 PM GMT

By: MoneyMetals

Commodities

Federal Reserve Chairman Jerome Powell’s comments on inflation last Wednesday added fuel to the contra-dollar trade.

During a press conference following the Fed’s decision to leave interest rates unchanged, Powell said, “In order to move rates up, I would want to see inflation that's persistent and that's significant. A significant move up in inflation that's also persistent...

"To move inflation expectations up from where they are, which appears to be a bit below 2%, will not happen overnight."

In other words, the Fed won’t be satisfied until consumer prices rise much higher over time.


This “weak dollar” policy may come back to bite, though, as the Federal Reserve Note steadily loses credibility as world reserve currency.

Over the weekend, Treasury Secretary admitted as much.

“People don’t have to use the dollar, we have the right to put restrictions on people using the dollar. And over a long period of time, if we’re not careful, people will look at using other currencies,” Mnuchin said Saturday in a CNBC interview.

Despite insisting that “we are not weaponizing the U.S. dollar," Mnuchin’s Treasury Department is leveraging the dollar’s privileged status in international trade to impose and enforce economic sanctions against U.S. adversaries. They include North Korea, Venezuela, Iran, and Russia.

But as CNBC noted, “Officials in China and Europe have been actively promoting their currencies as substitutes for the dollar when it comes to both reserves and transactions, particularly in the face of expanding U.S. sanctions and protectionist trade policies like tariffs.”

The central banks of China and Russia are also steadily replacing their sizable Federal Reserve Note reserves with gold.

Gold Mining Stocks Chart Pathway for Gold Breakout

Gold and silver prices remain mired in weeks-long trading ranges. They are essentially moving sideways – for now.
Precious metals mining stocks, however, are moving up. The chart of the HUI gold miners index shows an uptrend in place since mid-October.


The HUI has traded above its 50-day moving average for several days in a row. The 50-day line itself is now also curling up, confirming underlying technical strength.
If the HUI is a leading indicator for spot gold (and it often is), then gold prices may be on the verge of also breaking out. Gold closed last Friday right at 50-day moving average resistance.


A couple strong closes above the 50-day line should put gold on a pathway to an extended rally.

Silver, meanwhile, has been trading around the $17.00/oz level for the past five weeks and needs to break above $17.30, then $17.50, to get something going on the upside.

Bulls can take encouragement in the impressive outperformance of the Silver Miners ETF (NYSE:SIL). It gained 4.5% last week to reach a three-month high. Another move of that magnitude this week would put SIL at a new high for the year – and give silver itself some catching up to do!

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2019 Stefan Gleason - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in