Gold Sector Counting Down To Launch June 26, 2022
(David Brady) “Historically, the dollar is the antithesis of Gold because Gold is the anti-dollar: it exposes the true devaluation of the greenback. Said simply, when the dollar rises, Gold falls, and vice-versa. However, more recently, they have tended to rise and fall together more often, so it is less of an indicator than it was in the past. This is because the dollar is being rapidly devalued by inflation and yet it continues to appreciate relative to other currencies, such as the euro and the yen, because they are being devalued at a faster pace than the dollar. Gold rises too as all fiat currencies are being devalued. With that said, if we see a dramatic dump in the dollar, Gold will very likely go skyward.
The dollar has had a great run since its low of 89 in January 2021. But now it has set a negatively divergent higher highs across all indicators. It is also extreme bullish. Just look at all of those tweets calling for 120 next. That said, little of this matters if the DXY doesn’t break support at its prior low of 101.42 with follow through below 100. If and when that happens, my forecast for sub 90 levels increases in probability. Until then, 120 remains a possibility. I’m leaning towards a break down in the dollar across the board if and when the Fed reverses course next. When the dollar does peak and dump, Gold and Silver will likely resume their inverse correlation to the dollar and shoot higher.”
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