When the C-19 coronavirus chaos began to make its negative influences felt throughout the financial markets, global investment trends in the US currency emerged as a primary safe-haven beneficiary.
As a result of the risk-off trends in market sentiment, .DXY was driven to its highest marks in 3 yrs +, and prior resistance above 99.80 were overcome.
Then we saw reversals after the .DXY approached highs above 102.90 and its valuation experienced declines of as much as 10.5% in less than 4 months.
This reversal led to financial pundits in currency markets calling for the greenback’s demise and the end of its role as the world’s reserve currency, not likely.
Understand, that there are factors involved that could lead to further weakness in the market’s valuation of the Buck.
I believe that this Bearish will have a positive effect on the market prices of both gold and silver as we head into Y 2021.
We know now that the Fed is committed to holding interest rates near Zero for a longtime, so, the current market environment looks to be well-suited for additional moves higher in precious metals assets.
Gold and silver prices tend to perform best in low-yield interest rate environments, so the economic disruptions created by the virus chaos ensure that this risk-off investment context will continue to influence the financial markets for the next many Quarters.
For these reasons we here the HeffX-LTN continue to maintain Bullish outlooks on the precious metals space as long as gold prices hold above critical support levels in the 1,760 zone.
Have a healthy weekend, Keep the Faith!
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