The anti-market, USD and its fellow (would-be) liquidity destroyer, the Gold/Silver ratio are updated briefly.
USD is halted at our original bounce target of resistance at 102.50, while it tries to decide whether or not to test the next target, which is the resistance coinciding with the 50 and 200 day moving averages at 103.40.
Gold/Silver ratio is still elevated and as such, portrays USD to have the potential for some market price destruction should it rise impulsively. As yet, the GSR is perched bullish, but not impulsive.
Bottom Line
USD is still on the bounce anticipated on December 28th in this NFTRH+ update. It is thus far backed by a perky and bull-biased Gold/Silver ratio.
When gold (more counter-cyclical, less inflation sensitive) rises vs. silver and the stock market counter-party (USD) rise together it implies disinflationary macro signaling. If the GSR rises impulsively and USD breaks bullish again we’ll have signal toward a market liquidity problem.
If USD and GSR fail, we’ll have a signal toward inflation trades and the seasonal party extension. If they simply grind higher disinflationary, it could theoretically benefit the Goldilocks view that has been in play for much of the last year. Or perhaps impair it less than the inflation stuff.
As a side note, recall that the 2001-2003 period featured a rising GSR and a declining USD. That proved positive for the gold mining sector as it was briefly unique amidst a world of declining asset markets. So there is a potential curve ball for us to consider.
