Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Weekly Wrap-Up: Gold Dips on the Week While Silver Rises Almost 3%
By: Chris Mullen, Gold Seeker Report

Taiga Launches Website, Sets Tentative CSE Trading Date
By: Eagle Plains Resources Ltd.

Economics 101: Who Sets Prices?
By: Alasdair Macleod

Silver Breakout Or Fakeout?
By: Mike Maloney and David Morgan

COT Gold, Silver and US Dollar Index Report - April 20, 2018
By: GoldSeek.com

Gold Nearing Bull Breakout
By: Adam Hamilton, CPA

Surmounting The Greatest Market Threat
By: Deepcaster

GoldSeek Radio Nugget: John Williams and Chris Waltzek
By: radio.GoldSeek.com

Turkey Takes Possession of 220 Tons of Gold Repatriated from Federal Reserve
By: Rory Hall

Black Monday II - Repricing of Risk Begins
By: Gordon T Long

 
Search

GoldSeek Web

 
Connecting the Dots


 -- Published: Thursday, 31 March 2016 | Print  | Disqus 

By: Market Anthropology
Extending the Fed's good cop/bad cop routine, Chairwoman Yellen brought the sugar in her speech to the Economic Club of New York Tuesday and tamped down last week’s more hawkish tone brought on by comments from a few of the Fed’s regional bank presidents – namely, Dennis Lockhart from the Atlanta Fed, who speculated that the strength of the most recent US economic data could justify a rate increase as early as April.

... Pssft

Tacking downwind from Lockhart’s comments and following the line extended from the Fed’s March policy statement, Yellen reinforced that “economic and financial conditions remain less favorable than they did” in December, when the Fed raised its funds rate modestly off ZIRP. Warning that if oil prices began falling again it could create “adverse spillover effects to the rest of the global economy”, the Chairwoman seemingly embraced the underlying reflationary spirit in the markets over the past several weeks  greatly buttressed by the gathering downturn in the US dollar.

With the broad benchmark for the dollar falling the most in March since the April 2011 cycle low, we thought we would reassess possible bearings; as we have speculated that the dollar was pivoting lower from a cyclical high – and to boot – with mirrored affinity with the dollar's Q3 2011 pivot. 

As we have observed over the years in various markets, you can find that an asset will transpose structure for a period with mirrored symmetry to a corresponding, but inverse pivot. Although the potential top over the past year in the US dollar index has been much broader than the structure of the cyclical low, the breakdown has followed a very similar pattern with the index's breakout in 2011 and 2012.

While we remain steadfast and long-term bears on the greenback and agree its prospective fall would help hasten the “adverse spillover effects” noted by Yellen to the underlying global economy, the inverse cycle comparative from the dollar's cyclical low in 2011 is now approaching another retracement bounce in the pattern over the next few sessions.  
Should the pattern remain prescient, we'd expect the broader commodity sector – that was led higher by gold and silver over the past quarter, to retrace lower as the markets trade into April. From an intermarket perspective, gold is expressing a divergence with the dollar, as it so far has failed to make new highs even as the US currency has extended the lows from two weeks back. All things considered – and despite this mornings healthy bid, gold still appears to have some unfinished business with its retracement decline.

Moreover, by extrapolating the mirror from the corresponding cyclical peak in commodities from 2011-2012, you find a relative congruence in the broader pivot structure in an asset such as silver that exhibited an acute negative correlation with the dollar back in 2011 and 2012. 
When you contrast the structure in silver today with a wider benchmark of commodities from that period, you see a closer fit  as the heightened volatility in silver from that period is smoothed out by the broader index.
 

| Digg This Article
 -- Published: Thursday, 31 March 2016 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.