The US Dollar ($USD) Resumes Its Downtrend

I keep watching the US dollar, because the action there defines the market. Looking at the chart, you can see that the US dollar banged its head twice on overhead resistance and has now resumed its downtrend.


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Crude oil continues its March to the cellar, even as one expert/chattering head after another tries to call a bottom. Gold is headed higher as the dollar goes lower. My recommendation to $10 Trigger Alert subscribers last week that they buy Barrick Gold ($ABX) and Silver Standard Resources ($SSRI) is working out well .... for now.

Just remember things can change quickly in this market. That said, I am bullish on select precious metals miners for reasons I laid out in $10 Trigger Alert issues.

I am in Elko, Nevada, looking at a gold project. This one is very early stage, but very exciting at the same time. More on that another time.

Good luck to us all, and good trades.

Today's Must-See Gold and Dollar Chart

The US dollar continues to surge as shocked Europeans flee to the Greenback.  FX firms that played the Swiss Franc are going bankrupt. 

Remember also, the Ruble is collapsing, too.

But guess what else is holding up fine? Yep, gold. Even when it's priced in dollars. Because, as you've heard me (and others) say time and again, gold is the hardest of currencies.

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When the dollar finally takes a breather -- as it must -- what do you think will happen to gold? Gold usually moves INVERSE to the US dollar. I'd say gold has a chance to go ballistic.

We'll see how it plays out. Exciting times.

Friday Update -- Chart on the Dollar and More

Gold miners got hammered this week, and we had to take another round of gains in Gold & Resource Trader as another raised stop was hit.

I think gold's weakness has a lot to do with physical demand from China cooling off as that country's anti-corruption campaign heats up. They'll be back. And meanwhile, yesterday's dip spurred physical demand.

But the drop in gold prices also has to do with strength in the US dollar. Remember, gold is priced in dollars. As one goes up, the other usually goes down.

First, here's a chart of the US dollar ...

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The US dollar is on the path to test its highs from last year. The wind beneath its wings is the collapse of the euro, triggered by eurozone stimulus.

August jobs numbers generally sucked. This was expected. And here's a big part of the reason why.

A major New England grocery store chain shut down last month due to a strike. The strike is over. One would think that will help the next round of job numbers.

Overseas, the population of Russia is plummeting like it is suffering a major catastrophe or world war. And no, Ukraine doesn't count. People are generally miserable as the oligarchs squeeze them mercilessly.  A lesson for our own ruling class, not that they care.

Freeport McMoRan reached a deal with the government of Indonesia; laying out a roadmap for how the mining industry in that country could get back on track.

The US imported 878,000 barrels of Saudi crude a day in August, the least since 2009. This chart from InvestmentU tells the real story.

 I'll have more on America's energy production tomorrow. Have a good weekend.

Dollar and Gold Chart & The "PDAC Curse"

Here's an updated chart of the UUP, which I've been using to follow the US Dollar ...

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The US dollar folded like a cheap card table today as the Euro currency rallied ... partly on comments from European Central Bank president Mario Draghi. The market takes Draghi's comments as less dovish on EU monetary policy. Well, if you say so, my European friends. Anyway, as you can see from the bottom of the chart, dollar weakness is bullish for gold. Gold is now poised to make another assault on $1,350.

I think the piss-poor numbers from retailers like Costco and news that office supplies retailer Staples is shuttering 250 stores are probably also weighing on the dollar.Why is the dollar ignoring the fact that US jobless claims fell to their lowest level in 3 months? 

Janet Yellin says the Fed is watching the weather. Well, the weather can change. Stay warm, my friends.

One more note on gold. There is generally a drop in mining stocks after the Prospectors & Developer's Association of Canada -- the world's biggest mining conference, which just wrapped up in Toronto -- known as the "PDAC Curse."

But as analyst Eric Coffin pointed out in an interview with Kitco's Daniella, the PDAC Curse is in normal years. This year, 2014, is a year coming out of a bear market. The PDAC Curse is much less likely to happen in such a year.

Seasonal swings have been thrown out the window since the third quarter of last year anyway. My view: Buy value, and hold on for what is likely to be a hell of a ride.

Friday Afternoon Charts of Gold, Copper, Nat-Gas and More

Yesterday, I recommended Gold & Resource Trader subscribers grab three rounds of gains. They were nice gains, especially considering the short time frame.  Now, we'll have to see what happens next. Will I regret selling, or will we get a buying opportunity?

Here are some charts I'm watching ...

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