Tuesday, May 22, 2018

Gold price appears to have hit a bottom, but can it rally from there?

It has appeared lately that despite oil prices, interest rates, and commodity prices in general moving higher, gold and silver have languished.  And in fact their moves down below $1300 and $16.50 respectively have almost explicitly been tied to the dollars recent gains back towards 94 on the dollar index.

With this in mind it is looking like gold and silver are functioning in a 'monetary metal' mode versus that of a commodity, since its moves are working almost lockstep in opposition to the dollar.  And despite the fact that it has fallen below its 200 day moving average, signs are showing that it may have bottomed out here around $1282 and is consolidating for a possible move higher.

The only question that remains however, is whether the dollar is also looking to continue its own rally, and this could be the real catalyst for whether gold and silver can sustain any new moves to the upside.

Dollar Index chart:


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