$GLD and $SLV Prices as of July 2 2018 @moneymetals

July 02, 2018 — Precious metals floundered again in last week’s trading. The move lower was driven in part by deteriorating technicals.

The charts for both gold and silver look weak, though both metals did manage to find support above some important levels. Silver managed a weekly close above $16.00, but has slipped just below it this morning.

Perhaps more importantly, the U.S. dollar encountered resistance.

The DXY index has again stalled at 95. Friday was the third time over the past month the dollar has been unable to best that level.

It is worth noting that the dollar’s strong performance versus foreign currencies is a bit of a smokescreen.

It is interesting to watch how the dollar trades versus the euro, the yen and other major currencies, and it certainly can impact the paper prices of gold and silver in the futures markets. But no one should conclude that the dollar index moving higher means increased purchasing power of the Federal Reserve Note.

Quite the contrary, even the government-manipulated inflation data released Friday reveals the dollar buys 2% less than it did a year ago. This was, of course, spun as great news. “Experts” have long alleged that higher prices somehow mean faster economic growth.

We certainly don’t share this assessment, but we do think it would be wonderful if the trading algorithms currently selling metals on supposed dollar strength were reprogrammed to weigh the dollar’s performance on indices such as the CPI. The true strength of the dollar, or lack thereof, can only be measured when it is compared to actual goods and services.

Check out live precious metals prices here:


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