As we kickoff 2018, the US dollar is flashing a major warning as the price of gold is set to surge above $1,400.
U.S. Dollar Under Pressure Again
January 2 (King World News) – The following is from Andrew Adams at Raymond James: The U.S. Dollar was weak for much of 2017 but appeared to be trying to rally late in the year. However, the recent action has returned to being negative and the overall path of least resistance appears to still be on the downside. Support remains in the 91-92 zone on the U.S. Dollar Index, but a drop beneath there would not be a good sign for the U.S. dollar strength.
US Dollar In Danger!
Inflation Still Low, but Will it Pick Up in 2018?
One of the biggest questions regarding the U.S. economy is why we aren’t seeing higher inflation levels if the economy is really as good as the data suggests…
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The PCE Price Index, which the Fed uses as its preferred inflation gauge, is nowhere near its 2% target, which has likely helped keep the Fed from raising interest rates faster than it has. Yet, if inflation does finally start to pick up, especially if the tax cuts have their intended stimulative effect, will that mean interest rates will also rise, negating some of that economic help? That is one of the biggest questions investors will have to deal with in 2018.
Does This Look Like A Strong Economy?
Crude Oil Rallying
The weaker U.S. dollar may be helping commodities priced in dollars right now, and crude oil may be one beneficiary of this. WTI has managed to climb above $60 for the first time since June 2015 and is now threatening the $62.50 resistance zone. With much of the pressure off oil prices, we think investors will slowly start to return to the Energy sector, hopefully setting up a better year for oil stocks.
Crude Oil On The Move
Gold May Finally Be Behaving
We have previously pointed out that Gold was sitting right above major support and looking like an interesting trade candidate. It has taken some time, but the metal finally looks as if it has come into favor, judging by the previous two weeks. It has gotten back above $1,300 and looks set to possibly move higher.
Gold Looks Set To Move Higher!
King World News note: KWN pointed out that the last time Adams turned bullish on silver, the price of silver had a very big surge. If gold sees a similar move that would take the price of gold well above the crucial $1,400 level. The bottom line is that 2018 is set up to be a very interesting year in major markets.
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