The Dollar Index is now facing some significant resistance in the 99-100 zone.
If the buck turns lower from here, that should help hard asset prices continue to recover from their coronavirus lows.
If the USD continues powering higher in the days ahead, that would suggest investors remain nervous about the geopolitical and economic fallout from the China virus. Such fears usually imply selling in stock markets and industrial commodities – and potentially some safe-haven buying of gold.
The yellow metal appears likely to challenge the $1,600/oz. level again very soon. A break above it would establish new 7-year highs. Longer-term, bulls will be eying $1,900/oz – gold’s all-time high from 2011.
Silver is much further away from its former all-time highs. But when silver runs, it can run much faster than gold.
The first psychologically significant breakout point for silver would be at the $20/oz level.
As metals analyst David Smith explained during the most recent Money Metals podcast, “Technically, on the upside you’ve got resistance at $18, $19, and $20. And that could even take a while to get through or it could just cut through it like a knife through butter. But that will tell you something if it does. I think the real realization is going to start dawning on people when silver gets above $20 and stays there for a few days… You don't have too much resistance between $20 and $26. And I think it's very possible that by the end of this year, silver will challenge $26."
About the Author:
Stefan Gleason is CEO of Money Metals Exchange, the company recently named "Best Overall Online Precious Metals Dealer" by Investopedia. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC and in hundreds of publications such as the Wall Street Journal, TheStreet, and Seeking Alpha.