As gold and silver get hammered this morning, the US dollar index is ramming upward. This is exactly the scenario that would lead a sector correction and corrections in other markets, including commodities (with one geopolitically charged commodity ramming upward on the anti-war president’s video game war in Iran).
As yet, these look like normal pullbacks in gold and silver.
We (or at least I) can only guess if more downside will be at hand. If there is more upside in the GSR and USD/DXY, there will be likely more downside in the precious metals and other markets.
It’s important to note that today is one day and as noted in NFTRH 904, the knee-jerk effects of war do not tend to last or prove fundamental to markets beyond the flash points.
But also, we/I had been anticipating a correction, either selling the news of a solid earnings season or upon its completion. That before the pop to new highs in the miners messed with what I thought was a well thought out correction view. Sometimes markets just love to screw with you.
GSR & USD are trending down. But if the GSR is planning on testing resistance and the now down-sloping SMA 200 (orange) there could be significantly more pain before things stabilize. USD is taking out the moving averages and its next objective is the 100 area, which has halted several rallies previously within its cyclical bear market.
I am hedged to decent degree in the stock market after again increasing SPXS and SOXS. But am naked in the precious metals. I’d hate to have to short after such a big pullback as indicated in GDX this morning, pre-market. So I am going to let it breathe after the open, but keep a close eye on the Gold/Silver ratio.
