Gold & Silver Resist Stronger Dollar's Headwinds
by Mike Paulenoff, Mon September 12th, 2011
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The most interesting aspect to the enclosed comparison charts is the juxtaposition of the Euro/USD with spot gold and silver. Let's notice that the Euro/USD plunged from its mid-August recovery high at 1.4520 to this morning's low at 1.3500, 7% in about 3 weeks, while gold and silver prices -- including the SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) -- remained relatively resistant to the influence of the higher dollar.
Today's new reaction low at 1.3500 in the Euro/USD followed by a recovery to unchanged near 1.3650 could be an initial indication that the current downleg across the May-Sept down-channel is nearing or is at completion, and that a period of recovery is underway.
Barring a decline that breaks 1.3500, the precious metals "head- winds" created by a strengthening dollar just might be about to dissipate. Notwithstanding the direction of the wind, spot gold must hold above $1790 and spot silver above $39.40 to preserve the still bullish patterns.
Mike Paulenoff is author of http://www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
