Once again, the U.S. Dollar Index futures (DX H2) sold off shortly after the opening bell rang at the New York Stock Exchange. Most traders should know that when the U.S. Dollar declines the major stock and commodity indexes will inflate and trade higher. That is certainly what has happened this afternoon. Earlier today, when the U.S.
This morning, the precious metals are trading sharply higher. The catalyst for the advance in gold, and silver is the weaker U.S. Dollar Index, and the pledge by central banks to keep easy money available. Last night, the People Bank of China (Chinese central bank) cut reserve requirements for lenders. This is just another example of easy credit.
The SPDR Gold Shares (NYSEARCA:GLD) and the iShares Silver Trust (NYSEARCA:SLV) are both trading slightly lower this morning. These two precious metals will usually trade inverse to the U.S. Dollar, therefore, traders should follow the dollar closely. Short term traders can watch for intra-day support on the GLD around the $167.00, and $166.00 levels.
Gasoline Nears Six Month Highs, Here Is The Reason
Nearly everyday we hear about the problems in the Middle East with Iran. While there could be conflict with the oil producing nation; it is important to realize that this is not causing gasoline to increase in price. Gasoline has been steadily rising over the past four months and is now trading near a six month high.
The Fed, the S&P 500, & Why Gold Is Shining Bright
Nearly everyday since December the media reports how good things are getting in the economy. This report was better than expected, that report is better than expected and everyone is working again. While the economy might be healing in some way investors must ask themselves why the Federal Reserve is continuing to promote low rates until late 2014.
This afternoon, the Federal Reserve Bank announced that they will keep the fed funds rate at zero to a quarter percent until the end of 2014. This statement by the central bank has caused the U.S. Dollar Index to plummet intra-day. As we all know by now, when the dollar dips the markets flip. Everything in the market has rallied higher.
The U.S. Dollar Index is still the driving force behind every commodity move. This morning, the U.S. Dollar Index futures (DX H2) are trading lower by 0.53 cents to $79.69 per contract. When the U.S. Dollar Index declines it will usually mean that most every commodity will trade higher.
The SPDR Gold Shares (NYSEARCA:GLD) have rallied sharply higher since December 29, 2011 when the highly popular ETF traded as low as $148.27 a share. This morning the GLD is trading lower by 0.67 cents to $159.85 a share. Short term traders can watch for intra-day support around the $159.60, and $159.00 levels. Traders can watch for quick intra-day bounces around these levels.