Is The Dollar Going To Steal The Santa Claus Rally?

Top metals failed to keep on the bullish track set earlier. A heavy-duty dollar reinforced by historically high inflation, earlier tapering expectations, and a turn to safety puts pressure on precious metals.

Let us see what is currently happening with the Dollar Index in the daily chart below.


The well-known "Double Bottom" (blue) pattern has emerged in the summer. It is a textbook case as all stages went precisely as they should appear.

The focus was on the breakup of the so-called "Neckline" (black horizontal line) located at the top between the two bottoms at $93.44. The first attempt to crack that level occurred at the end of August, but it failed. After a small retracement, the second attempt at the end of September succeeded in breaking out. The impulse was so strong that the price overshot the Neckline with a big margin to hit the fresh one-year top of $94.5. Continue reading "Is The Dollar Going To Steal The Santa Claus Rally?"

The King Requires Respect

Before we get down to the update, I would like to answer the comment of our esteemed readers posted last week in more detail about the Cup & Handle pattern on the big gold chart. I think it will be interesting for all to see the visualization of my answer. Besides that, I prepared a bonus chart for you with an established pattern and a trade setup.

Let us start with that big gold chart first.

Gold cup handle pattern

The reader kindly provided exact coordinates, so I just built the pattern. As we can see in the chart above, it is safe to say that the shape of a Cup could have been completed already (blue). However, as I answered to that comment, we are missing the Handle part of the pattern yet. I put the possible shape of it in red on the chart. The price should make a zigzag inside of the Handle first; it could take several years as Cup has been shaped within long 9 years. Only then, the price could continue to the upside. The target will be located beyond $3000. To sum up, the pattern itself is possible, but it is not fully shaped yet, and we should wait to see how the market will play. Continue reading "The King Requires Respect"

Precious Metals: Bullish Only

The king currency and the precious metals move amazingly in line with the previous forecasts. As time goes by, we can see the path clearer these days, and therefore I kept only the one option for each instrument to emerge.

Let us start this post with the updated daily chart of the U.S. dollar index (DXY), aka "King," as it keeps a strong influence on the precious metals.

precious metals

The selling pressure remains relatively strong in the dollar index. The expected pullback transformed into a minor sideways consolidation. It was not deep, as it could not retest the resistance. The price already broke below the consolidation valley in 93.3, and the RSI indicator confirmed that move down sinking below the crucial 50 level. This was one reason to think that we should now expect only the bullish option in the precious metals. Continue reading "Precious Metals: Bullish Only"

Will Gold Outshine Silver?

The collective mind of the Blog's readers has proved to be very powerful as the majority of you guessed it right last time, that the U.S. dollar index (DXY) will reverse down. My assumption that precious metals will start to grow also played out accurately so far, and one could get the clue of DXY reversal from the assumption mentioned above.

In this update, I added minor annotations for fine-tuning previous charts as I switched to a lower time frame of 4-hour. The final chart below will show you the background for the title of this post. Let us start with the DXY 4-hour chart.

Dollar Index

The market indeed saw that orange trendline resistance as the price reversed right at that point. The RSI turned bearish now as it broke below the crucial level of 50. The indicator raises its head together with the price, which could throwback to retest the resistance. The former could briefly overthrow the crucial level, and then it should drop below it again to confirm the Dollar's further weakness. Continue reading "Will Gold Outshine Silver?"

Gold & Silver: The King Reins In

Almost all targets, which were set in the previous post, were reached last week except for the gold. I think the central banks bought the dip of the gold price, as the silver was lack of such strong support.

The majority of readers guessed it right as the US dollar index (DXY), aka “The King,” exceeded the target and reached the trendline resistance that I have mentioned at the beginning of the month. It is time for updates, and “The King” will open the series of charts.

The DXY daily chart is the first.

Gold Silver

It is interesting to see how from time to time, the market catches traders in a “make it or break it” situation right at the end of the trading week, keeping their heads spinning with almost paranoiac thoughts – “I should keep the profitable position Vs. I should book the profit”. It is even worse this time as usually Friday is the “book the profit and relax” day, but the price just stalled on the trendline resistance; hence not much of the selling to cover was there. Continue reading "Gold & Silver: The King Reins In"