The previous week started quite favorably for precious metals bulls, but as the week progressed, the situation became less bullish, and finally we saw some bearish signs. Overall, the previous week didn’t change much.
Source (all charts): stockcharts.com
In the previous alerts we wrote a lot about gold, silver and miners’ reaction to the dollar’s rally (more precisely: about the lack of reaction) and the strength of the implications. In short, we didn’t think that the consequences were really bullish, because there had been many cases when the precious metals’ reaction was simply delayed, not absent. We saw some other bearish signs, but we’ll move to them in the following part of this alert. As far as the USD Index is concerned, we saw a pause after a strong rally. It was nothing surprising, as the previous rally was quite sharp and the index moved to the short-term resistance line.
What’s interesting is that while the first part of the last week was rather bullish for metals – they didn’t decline despite the dollar’s rally – the final part of the week was bearish as metals declined without a rally in the dollar. It could be the case that metals are starting to catch up as far as their reaction to the dollar’s rally is concerned.
Has the USD Index really paused or is the rally already over?