News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
*** GOLD MARKET WIRE ... GOLD MARKET WIRE ***
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US Producer Prices Increased by 6.6% in May... Fastest Pace in a Decade... Year-on-Year PPI Increases 5.3%
US Producer Prices Increased by 6.6% in May... Fastest Pace in a Decade... Year-on-Year PPI Increases 5.3%
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US Bans American Banks from Purchasing Russian Sovereign Debt
US Bans American Banks from Purchasing Russian Sovereign Debt
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*** GOLD MARKET WIRE ***
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Gold Market Wire

News, analysis and commentary for gold traders and investors

FX Watch

US Dollar Backs and Fills

January 19, 2020 - (Gold Market Wire) - The US Dollar has bounced off the 50-day moving average (vs. the EUR) this European a.m. after a strong start to the year which has seen it move from 1.235 to 1.205. The charts shows the back and fill in the rally.

our power downtrend - aka US Dollar rally - and the 50-day m.a. in orange

So we have briefly poked our head above the parapet. All pretty normal behaviour. But we don't believe we've seen the end of the rally for the Dollar. Why? Well, one reason is that the level of Dollar shorts in the market is enormous, and to shake them out - the market's favourite pastime - there must be more pain. Indeed it is strange, if entirely predictable, that the whole world would get short the Dollar as it approached major support - but there you go. The sounds of market pain are reverberating around the world, because the Biden administrations plans to print like never before have the market convinced the Dollar will be eviscerated in a sea of digital dollar printing. Have they learned nothing since 2008? Velocity is zero, and the $20 trillion+ economy is contracting like never before. No matter how much they print, its not going to make a difference. Until, of course, a "use it or lose it" ultimatum is delivered to the savers of currency.

Gold has taken a small solace from the Dollar retracement, but until we get solid action over $1850 -we won;t even think about length. Those who followed our spec short advice did well, if they were clever enough to day trade out of it like a good spec should - avoid the greed level. Scalps aren't made to hold. They aren't positions. Right now, if anything, we're leaning towards another short spec on the scalping run, but that's just from the "wild eyed gamblers" side of things. The power downtrend has been fairly steep, so the nuanced play is caution and neutrality.

caught in an $1800-$1860 range?
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