Courtesy of Chris Kimble.
The chart below compares Gold to the U.S. Dollar over the past 30-years. As you can see a couple of long-term trends have taken place.
CLICK ON CHART TO ENLARGE
Gold was weaker than the US$ (lower highs and lower lows) from the late 1980’s until 2001. Gold was much stronger than US$ from 2001 until 2011.
Since 2011 Gold has been much weaker than King Dollar, as a 4-year trend of lower highs and lower lows has been in play.
Gold is up around 15% year to date and up around 2% over the past 52-weeks. Gold hasn’t been able to show these types of positive numbers in the pat few years. A bear market rally has taken place over the past 90-days, pushing the ratio higher, inside of a falling channel.
Now the Gold/US$ ratio is testing dual resistance at (1) above, as 4-year falling channel resistance is in play.
What Gold and King Dollar do at falling resistance has the chance to set the tone for which we should own, possibly for years to come. What happens here could impact portfolio construction in a big way for these assets!
If Gold and the US$ are of interest to you in the form of trading or long-term ownership, we would be honored to have you as a Metals Member. Our monthly program is just $29 (sign up here). We pass along a 20% discount for our annual program (sign up here).
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