Dollar Looks To Break Out; What Does That Mean For gold?

March 5, 2018

New York (Mar 5)  Equities are in trouble and the dollar looks poised to break out to the upside. Will a strong dollar put pressure on commodities and metals? The answer is not a simple one, but it is my opinion the dollar will have no effect on the commodities or the metals. The dollar has been weak for months, but the metals did not benefit from a weak dollar.

Under normal circumstances, the dollar directly correlates to commodities because they are dollar-denominated. However, with all the Fed and central-bank manipulation, the markets have priced all that information, which has kept these markets under pressure.

Gold appears to range-bound between $1,300 and 1,365, now trading just below midrange. On Thursday, gold was getting hammered, found the lower end of the range and immediately rallied. The current action suggests that gold could test the $1,240 lows, while silver looks to have bottomed


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