Weakening US Dollar Driving Gold to New Record Prices

Weakening US Dollar Driving Gold to New Record Prices

#dollar #gold

$USD $DXY $XAU $GLD $DIA $SPY $QQQ $RUTX $VXX $GS

Savvy participants are going “all-in” on gold,

Goldman Sachs is going “all-in” on gold, that is happening by the currant Southside pressure on the Buck.

With more Southside expected in US real interest rates we here at HeffX-LTN are reiterating our Long gold recommendation from last December and are raising our 12-month gold price forecasts to 2500oz

USD is in failing to regain the luster it had in Y 2015, while gold is rising at a record pace for the 2nd time in 10 yrs.

The focus on the erosion of USD, as now the risk is from the erosion of fiat (paper) currencies that sows the risk for inflation and gold is the best hedge against that action.

If all of this plays out like we believe it will, gold’s price is in for quite a drive North, thanks to the Buck.

Note: Gold at 10,000oz has the total value at just around $50-T, which is still below the value of global financial assets that need to be hedged.

Besides being a good stimulus for investment,  strengthening gold to the US Dollar is also good for exports. This can drive down unemployment so there is a parallel benefit here which the average American is not aware of. We need exports plus cheaper US goods in the international market to recover from our pandemic troubles. 

Just remember this, from an economist point of view, rising gold prices are golden and yes, expect gold to continue to follow this pattern as a hedge to the US Dollar,” says Bruce WD Barren, a recognized world economist and Chairman of The EMCO/ Hanover Group.

Wednesday, gold futures settled 8.80 higher (+0.5%) at 1,953.40

The US Dollar Index was off 0.3% to 93.38.

Wednesday, the major US stock market indexes finished at: DJIA +160.29 at 26539.57, NAS Comp +140.85 at 10543.02, S&P 500 +40.00 at 3258.44

Volume: Trade on the NYSE came in light at 861-M/shares exchanged

  • NAS Comp +17.5% YTD
  • S&P 500 +0.9% YTD
  • DJIA -7.0% YTD
  • Russell 2000 -10.1% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes if Bullish with a Very Bullish bias in here.

Looking Ahead: Investors will receive the advance estimate for Q-2 GDP and the weekly Initial and Continuing Claims report Thursday.

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.