Here is a look at gold and the US dollar as we continue to kickoff trading in the second month of 2025.
February 4 (King World News) – Naveen Nair at Citi: We think room for a move higher in the dollar looks limited in techs, especially with momentum waning. We go deeper into our short term biases below:
US Dollar Index: A very choppy session midst tariff headlines over the weekend and Monday. The dollar index rapidly approached the 110 level, but did not test resistance at 110.18 (Jan high). Ultimately, markets posted an indecision doji on Monday.
US Dollar Index Has To Get Above 110.18 Level To Continue What Has Been A Strong Advance
Where next:
While tariff headlines mean that markets are likely to be choppy, we generally see a bias for the downside. This is supported by weekly slow stochastics crossing lower from overbought territory, suggesting momentum for a move lower.
Furthermore, the room for a move higher in DXY looks very limited. The first resistance level of 110.18 (Jan high) is only ~1% higher from Monday’s close. Subsequent resistance is at 111.19 (76.4% Fibonacci pullback), which is another ~1% away.
Short Term Weakness Likely For US Dollar
As such, when considering the building blocks, we think a move lower is more likely. The first support level to watch is 107.68 (55d MA, followed by 106.97 (Jan low). In the medium term, we see support at 105.42 (Dec low).
King World News note: The US dollar and gold surged higher together in 2024 with the dollar advancing 5% and gold soaring 24%. Regardless of where the dollar trades from here it remains just another garbage fiat currency backed by nothing. Silver is threatening to explode higher and advance toward the $50 all-time high quickly. Continue stacking physical silver and don’t worry about the volatility.
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