The USD Index is down today. Quite visibly so – it moved below its most recent low.
What does it imply for the U.S. currency?
Well, it implies absolutely nothing.
It’s yet another test of the previous low, and perhaps even the second verification of the breakout above the highest of the declining resistance lines, which already proved its strength as support.
It does imply something interesting to the precious metals sector, though – at least it’s majority.
The thing is that the move lower in the USDX (and the UUP ETF, which is the proxy for the latter) didn’t cause bigger rallies in gold, silver, and mining stocks.
Silver DID move to new all-time highs today, but as I wrote previously, silver is likely decoupling from the rest of the precious metals sector due to its unique fundamental situation.
Will silver soar above $60 soon? Given this momentum and silver’s ability to stay above the previous highs for three consecutive trading days, it’s quite likely.
Mining stock and gold, however, don’t share the same bullish technical setup.
In their case, the fact that they failed to rally visibly today despite USD’s decline is a bearish sign.
Consequently, it seems that our silver-vs.-miners spread continues to be a good trading strategy.
Thank you for reading today’s free analysis. This week, we made major shifts in all parts of the portfolio. Detailed targets and profit-take levels are available in its full version - today’s Gold Trading Alert and invite you to subscribe and read them today, while the opportunity is still present.
Przemyslaw K. Radomski, CFA
Founder
Golden Meadow®