Market Outlook – PMs / US$

Gold and silver went to more new lows today, which is good and all part of a bigger set up. There are shorter term trading opportunities here, but I’m only going to discuss the investment opportunity in this time frame – into the end of November (with re-tests of the lows) – which most of us should focus on. There will be more selling waves, but the strong hands are starting to come back in a bigger way. I am obsessive about the entry point, most people shouldn’t be. But using the pronounced weakness to buy is very preferable. I have drawn in the exact same buy zones numerous times in gold. And I use gold as a proxy for the whole group. This situation is going to take some time, but we need to ignore the (after the fact) “reasons”/excuses as to “why” gold is going down – such as the $ strength. And the US$ went to more new multi-year highs today. But of course, as the $ is at multi-year highs, now many of the folks who were bearish for years are suddenly finding the “fundamentals” of the $ bullish. There is one guy in particular who has made a fortune (I assume) selling his books about how the Fed can easily weaken the $ at will. Now all of a sudden he’s bullish on the $. So sentiment wise, at least, the $ is beginning to be not as solid up here. Intermediate term I’m still very bullish on the $, but this is a horrible entry point to buy. We’re hearing all of the “reasons” now as to why the $ is rallying, but where were they a couple years ago. The $ has discounted an interest rate increase by the Fed wizards next month. And there are zero central banks who want to see the US$ rally this much, this quickly. But this big rally was inevitable, as there’s just too much upside pressure. And in that linked post, I said the central banks are in big part responsible for the upside pressure on US Treasury yields, due to the defending of their own currencies. That will continue, but in the short term bonds (prices) are very oversold and closing in on a short term bottom – (inverted) above 2.40% on the ten year yield.

Originally published on One Radio Network