Hey there folks. I’m in Jacksonville, teaching a class with Tom Busby the first few days of this week.
As such, I’ll keep today’s update brief and to the point.
The top thing on my mind fight now is how gold and the dollar are moving in tandem.
It’s not often that gold and the U.S. dollar move in sync. As I mentioned my Weekly Wrap-Up on Friday, they don’t usually move together like this. Normally when one goes up, the other goes down.
It makes sense if you think about it: Gold is priced in U.S. dollars, so when the dollar strengthens (or gold weakens), it typically takes fewer dollars to buy the same amount of gold, pushing the price down.
And on the flip side, when the dollar weakens (or gold strengthens), gold prices often rise because it takes more dollars to buy the same amount of gold.
That’s why seeing them move in the same direction is so unusual. It’s a rare thing, and while it has happened before, it’s something I’m keeping a close eye on this week.
Here’s what I’m seeing:
- Gold’s Key Levels: Gold is struggling to break above $2,650 and needs to close above $2,670 to gain momentum for another leg higher. Right now, that $2,650 area is acting like a ceiling, keeping the rally in check.
- Silver and Copper Playing Catch-Up: Unlike gold, silver and copper don’t seem to care about the dollar’s movements. Instead, they look like they’re trying to catch up with gold’s recent strength.
- Why It Matters: Gold’s unusual alignment with the dollar could signal a shift in market dynamics. Whether it’s tied to interest rates, inflation concerns, the upcoming political changes, or broader economic trends, this connection is worth watching.
As for silver and copper, their moves could indicate that the broader metals market is starting to wake up. If we see gold close above $2,670, it might be the catalyst that pulls the rest of the metals higher.
My Takeaway:
For now, I’m watching these levels closely. Gold needs to prove itself by breaking $2,670 on a closing basis and holding there. Until then, I’m staying cautious and keeping an eye on how silver and copper react.
This week is already shaping up to be an interesting one for the metals market, and I’ll be sure to keep you updated.
— Geof Smith
P.S. January is one of the busiest months in the stock market, as money managers shift billions from December’s losers to January’s market darlings… And Nate Tucci’s planning to target those tickers for massive gains.
