Here is an important look at the US dollar, gold, and mining stocks.
US Dollar’s Resilient Showcase
April 29 (King World News) – Naveen Nair at Citibank: The dollar looks very resilient, reversing a dip through most of last week to retest resistance at 106-106.5 (Nov 10 high, 2024 high) into the weekly close. On top of that, weekly slow stochastics remains in overbought territory and still has not crossed lower, suggesting momentum has yet to wane.
Weekly US Dollar Bias Remains To The Upside
Taken together, the resilient price action leads us to retain our bias for a slightly higher dollar, especially as we head into key event risks this week (FOMC and US Jobs).
Downside watch: The key support level to watch is 105.10 (April 2 high).
US Dollar Key Support Is At 105.10
IF we see a cross lower in weekly slow stochastics or a break below the 105.10 support level, we would have to re-evaluate our bullish USD view.
Gold, US Dollar And Mining Stocks
King World News note: Gold and the US dollar had been rising together very recently. If the dollar begins another move higher it would not surprise me to see gold rising in tandem. Regardless, the price of gold is headed significantly higher over the long term. About the mining stocks, the HUI is currently 270. The high in 2011 was 630. So the HUI is 360 points lower than its high when gold was trading $1,920 in 2011. The undervaluation of the mining stocks will not be a state of permanence. The HUI will eventually smash the previous record of 630, and when the miners are finally in the manic phase you can expect some pretty wild prices on the upside in these stocks. Use weakness to accumulate the high-quality names in the meantime.
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