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The U.S. Dollar’s Renewed Bull Market Is Bad News For Gold

Monday, March 6, 2017 5:07
% of readers think this story is Fact. Add your two cents.

(Before It's News)

From "http://investinghaven.com/reading-markets/dollar-bull-market-bullish-yields-bearish-gold/"
target="_blank">Taki Tsaklanos
: The U.S. dollar is back in a
bull market. After a long consolidation in the last 24 months, the
dollar broke out in November only to come back and test its
breakout level in February of this year. "more-157563">

InvestingHaven’s research team wrote in December: "nofollow" href=
"http://investinghaven.com/next-big-move/us-dollar-long-term-chart-bullish/"
target="_blank">5 Reasons Why The US Dollar Long Term Chart Is
Bullish
. That was another spot-on call, as it appears now that
the dollar is going higher.

What does that mean to other asset classes? According to the
current "http://investinghaven.com/reading-markets/primary-market-trend-2017/"
target="_blank">primary trend
, it implies that a rising dollar
would be good for yields but bearish for gold. Below charts make
that point.

"http://investinghaven.com/reading-markets/dollar-bull-market-bullish-yields-bearish-gold/attachment/dollar_index_march_2017/"
target="_blank"> "http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/dollar_index_march_2017.jpg"
rel='magnific' sizes="(max-width: 975px) 100vw, 975px" srcset=
"http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/dollar_index_march_2017.jpg 975w, http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/dollar_index_march_2017-300x134.jpg 300w, http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/dollar_index_march_2017-768x344.jpg 768w"
alt="dollar bull market" width="500" />

First, yields are rising with the dollar since last year. Now
that is a very important insight, and should be carefully examined
by investors. The point we try to make is that href=
"http://investinghaven.com/reading-markets/stock-market-correlation-oil-prices/"
target="_blank">market correlations
tend to work in the context
of a cycle. In other words, a rising dollar could be the dominant
trend and, during that trend, positively correlate with yields and
negatively correlate with gold. That does not imply, however, that
those correlations will last forever. On the contrary, they tend to
last for a period of time, typically during a risk on / risk off
cycle, as explained in "http://investinghaven.com/reading-markets/market-outlook-2017-indicators/"
target="_blank">Market Outlook 2017 According To Our Proprietary
Indicators
.

For the coming months, we see yields rising with a rising
dollar. Watch how both markets successfully tested multi-year
support, and are now set to higher. A break below their support
line would invalidate our view.

"http://investinghaven.com/reading-markets/dollar-bull-market-bullish-yields-bearish-gold/attachment/yields_bull_market/"
target="_blank"> "http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/yields_bull_market.jpg"
rel='magnific' sizes="(max-width: 978px) 100vw, 978px" srcset=
"http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/yields_bull_market.jpg 978w, http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/yields_bull_market-300x134.jpg 300w, http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/yields_bull_market-768x344.jpg 768w"
alt="yields bull market" width="500" />

The above two charts are bad news for gold bulls. We already
explained why "http://investinghaven.com/reading-markets/gold-investors-yields-gold-price-indication-march-2017/"
target="_blank">Gold Investors Watch Yields As A Gold Price
Indication For March 2017
. Moreover, we described how "nofollow" href=
"http://investinghaven.com/reading-markets/gold-pushback-markets/"
target="_blank">Gold Gets Pushback From Other Markets
. We also
said that our "http://investinghaven.com/screening/gold-price-forecast-2017/"
target="_blank">gold price forecast for 2017 is bearish
. It now
seems that the markets are nicely lined up to support our
forecast.

Note that gold has lost steam right above a major trendline,
exactly in the same month the dollar and yields successfully tested
their important support lines. That is no coincidence, and only
confirms the trends we outlined in this article.

If gold goes lower, we believe in late 2017 investors will be
presented with a great buying opportunity in gold. That moment is
simply not now, so gold investors should have a bit of patience
before accumulating their favorite asset.

"http://investinghaven.com/reading-markets/dollar-bull-market-bullish-yields-bearish-gold/attachment/gold_bear_market_2017/"
target="_blank"> "http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/gold_bear_market_2017.jpg"
rel='magnific' sizes="(max-width: 961px) 100vw, 961px" srcset=
"http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/gold_bear_market_2017.jpg 961w, http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/gold_bear_market_2017-300x135.jpg 300w, http://14085-presscdn-0-63.pagely.netdna-cdn.com/wp-content/uploads/2017/03/gold_bear_market_2017-768x345.jpg 768w"
alt="gold bear market" width="500" />

The SPDR Gold Trust ETF ( "http://etfdailynews.com/etf/GLD/" target=
"_blank">NYSE:GLD
)
fell $0.22 (-0.19%) in premarket
trading Monday. Year-to-date, GLD has gained 7.21%, versus a 6.66%
rise in the benchmark S&P 500 index during the same period.

GLD currently has an "http://etfdailynews.com/smart-grade/" target="_blank">ETF Daily
News SMART Grade
of B (Buy), and is ranked #6
of 33 ETFs in the "http://etfdailynews.com/etfs/precious-metals-etfs/" target=
"_blank">Precious Metals ETFs
category.


This article is brought to you courtesy of href=
"http://investinghaven.com/reading-markets/dollar-bull-market-bullish-yields-bearish-gold/"
target="_blank">Investing Haven
.

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Source: http://etfdailynews.com/2017/03/06/the-u-s-dollars-renewed-bull-market-is-bad-news-for-gold/

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