USD Index’s Bottom is Like to Impact Many Markets – Profit on It
In my Friday’s free analysis, I wrote that the USD Index was likely bottoming and that both: silver and copper were likely to reverse their course.
That’s exactly what we see right now and given the situation in the S&P 500 futures as well as in bitcoin, it seems that we’re on the verge of a move lower in many markets.
Silver just invalidated its breakout above its declining resistance line. I previously wrote the following about it and about copper:
“Meanwhile, silver is moving to its declining resistance line once again, and there’s nothing uncommon about it. As I described it previously, broader short-term tops are relatively normal for the white precious metal:
Silver is up, but it’s not as high when it was when we took profits from the previous long positions. It is another breakout, though. Will it this one be invalidated as well? That appears likely to me.
Please note that silver often pauses after the top and before the slice. That’s how it topped in October 2024, and in July 2024. Consequently, seeing a third top here is rather normal.
A fourth top will also be normal.
And speaking of normal topping patterns, if the current rebound in copper seems troubling, please consider that it’s exactly how copper topped in the previous cases.
Sometimes the rebound is bigger (Nov. 2024), sometimes it’s smaller (May, 2025) and sometimes it’s average (Sep./Oct. 2024), but it’s normal for it to take place.
Consequently, what we see now is not a reason to become bullish.
Indeed, copper moved back down and is already trading close to its recent lows. The quick rebound appears to be over.
Quoting further:
Besides, FCX already clearly showed us, which way it wants to go.
The initial slide that we saw yesterday was enormous for an hourly price move. FCX got back up and ended the day only 1.51% lower, but:
- This still increased our profits from the short positions in it,
- This was still a day when FCX underperformed copper, thus being a bearish confirmation,
- Given the situation in copper, FCX is likely to slide soon, anyway.
Indeed, even despite copper’s daily gain, FCX went down by 1.79% on Friday, once again underperforming and confirming that it really wants to move lower from here. And given the broad head-and-shoulders pattern, it’s likely to move much lower.
As copper declined significantly in today’s pre-market trading, it’s likely that FCX will slide once again today.
Spot gold and spot silver are down today, and they have pretty much erased their last rally.
Zooming in shows that spot gold is pretty much back below the Jan. 22 high.
This fits the weakness that we saw in silver and copper. It also fits bitcoin’s second failure to hold above $100k.
The second top was slightly above the first one. Does that kind of performance of the “new, electro-gold” remind you of something? It should, because that’s how the “regular” gold topped in 2011.
Even the little initial top (mid-Aug. 2011 and mid mid-Nov. 2024) is similar in those patterns.
Moving back to what I wrote in the opening paragraph of today’s analysis, the S&P 500 futures just plunged.
Shortly after testing their 2024 highs, S&P 500 futures declined back below the 61.8% retracement based on the recent decline.
It is a very bad sign for many markets, particularly for mining stocks (especially junior mining stocks) and silver.
What’s REALLY peculiar is that all this is happening while the USD Index moved higher by just a bit.
Normally, given how linked the precious metals and commodity market and the USD Index are, one would expect that a small move up in the USDX would trigger a small move down in the PMs and commodities (like copper and crude oil).
Not today.
The PMs and copper are reacting strongly, which further confirms what I’ve been writing previously i.a. based on miners’ relative weakness to gold. Namely, that the precious metals sector just “can’t wait” to move lower.
The USD Index itself appears to have bottomed. It moved back to the 2023 top very briefly and then quickly went back above its 23.6% Fibonacci retracement level. This, plus the fact that the RSI recently moved below 50, and this previously marked the previous bottoms in the USDX (and tops in PMs and miners), suggests that we have already seen the end of this pullback.
This, in turn, strongly suggests that the rallies in gold, silver, miners, and copper are over.
Thank you for reading my today’s free analysis. As always, I will keep my subscribers informed (also via intraday Alerts whenever the situation requires them). Please note that by subscribing now, you’ll also get access to last week’s webinar with details on gold’s and silver’s medium-term price targets. I encourage you to become our subscriber and get those premium benefits while the opportunity from the current trade is still present. Alternatively, if you’re not ready to subscribe yet, I encourage you to sign up for my free gold newsletter today.
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Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief