Gold is up this morning, still in the resistance zone on the daily chart. It is still in the minor downtrend that began on June 16, but above the SMA 50 this would be its chance to break the correction if that is going to happen in the short-term. Personally, I thought it would correct deeper and that is still a clear possibility, as the gold price got a bit oversold with RSI now bouncing back toward its downtrend’s upper bound.
More importantly to the wider trades in commodities, the Silver/Gold ratio continues to dwell below the downtrending 200 day moving average. Remember that when projecting the bounce the SMA 200 was one of our primary objectives.
The way the SGR often rolls, there would be another leg up and it could impale the resistance (red) noted above. But “could” is not would or will. It could. Another thing it could do is top out here. RSI and MACD are not very pleasant and the ratio is nesting, waiting to break through or fail.
This while Uncle Buck votes “no” on the big beautiful and disgusting debt package about to be inflicted upon the nation by the president and his sycophants.
Our lowest target for USD is support just above 93, and damned if these political animals don’t want to continue making “America great again” on the back of our once highly regarded currency. * I am sorry for the politics (you’ll recall I gave a similar treatment to the last administration as it rigged the macro for reelection), but the truth is the truth. The United States of America is playing the oldest monetary/fiscal parlor trick in the book… compromising the currency for the appearance of economic growth/stability.
As for functional strategy, USD is saying go forth and speculate on the SGR trades. But SGR is dwelling, thinking about it. We should know soon which one is giving the best signal. A declining USD and rising SGR should theoretically go together. Captain Obvious would also instruct that a rising USD and rising Gold/Silver ratio would also theoretically go together.
* Highly regarded in the context of a world full of trampy debt paper, including USD.
