So Far Today – Silver is Moving Two-to-One vs Gold

As we reported yesterday, Fatty-Fat Finger was trying to work some magic with the charts and we are happy to say it was a miserable failure. Not only was it a failure and both gold and silver recaptured the “dip” both finished day slightly higher. We also see the dollar continuing to slide which is helping to support higher moves in gold, but silver is moving up a better clip.

So far today silver is up 2% while gold is up 1%. Silver has moved twice as much and we hope this trend continues throughout the day.

Will the cartel allow this higher move to continue? The charts above look great, but inviting.

After peaking with a false breakout near 104 in early 2017, the US dollar (as measured by the Dollar Index) has continued to plummet in 2018. As I type, the index is near 90 and already down over 2% year-to-date. Dollar weakness has traditionally been positive for commodity prices, and the evidence of this can be seen below.

First, check the clear and obvious top in the Dollar Index. Note the breakdown through 92, and the most recent drop through the 2017 lows near 91. Source

Is the weaker dollar making for higher silver? Is this the reason we hear that silver is the “achilles heal” of the monetary system? Is this the real reason we only hear silver discussed on financial TV as a commodity metal and only very rarely discussed as a monetary metal?

“A weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters at the Davos, Switzerland gathering, according to the Financial Times.

The dollar has dropped about 11 percent against a basket of currencies since President Trump’s inauguration. A weaker dollar makes U.S. goods and services more attractive to foreign buyers, potentially boosting exports.

Mnuchin expressed confidence, however, that the dollar would strengthen along with the U.S. economy. Source

Whatever the reason we are happy to see both gold and silver moving to the upside and as the dollar continues to slide closer to the dustbin of history we can only hope that the monetary metals do their job and alert a sleeping public. Until that day arrives let us add to our stack and know our insurance policy is, literally, rock solid!