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Precious Metals Next Big Move Hinges on U.S. Dollar

By Chris KimbleCurrenciesMay 03, 2023 16:18

uk.investing.com/analysis/precious-metals-next-big-move-hinges-on-us-dollar-200573914

Precious Metals Next Big Move Hinges on U.S. Dollar

By Chris Kimble | May 03, 2023 16:18

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DXY

+0.35%

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XAU/USD

-0.50%

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XAG/USD

-1.83%

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Gold

-0.55%

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Silver

-1.93%

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When the U.S. Dollar broke out to new highs last year, it looked like nothing could stop the greenback. And the headwind of a strengthening dollar made it difficult for precious metals like gold and silver to advance.

BUT… King Dollar has fallen nearly 15% from its highs, and 3 of the past 4 months have closed near the critical support zone of 100-102. This suggests that there has been little conviction of late. And this has provided a tailwind for precious metals.

The long-term monthly U.S. dollar chart (below) highlights the breakout above the “red arrows” zone (100-102), along with the recent testing of that zone.

DXY Long-Term Chart

DXY Long-Term Chart

Note that the 2% zone of 100-102 has been support or resistance numerous times over the past 8-years, making this a critically important area to watch on a monthly closing basis.

Precious metals bulls should experience a fun price ride should support fail to hold here.

Definitely, something to watch. Stay tuned!

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