The Jackson Hole Seminar has started and the markets have already reacted to Janet Yellen’s speech. Her speech was rather non-informative as it almost entirely revolved around the issue of the regulations of the financial market and how they made it stronger. Still, the markets already responded - in particular, the USD Index, which declined by about 0.5 and moved below the 93 level. What are the implications for gold and silver?

Gold moved higher by $4 and silver moved higher by 9 cents - this is a very weak reaction compared to the size of USD’s decline. In other words, precious metals are not responding to USD weakness, which is a sign of weakness that doesn’t bode well for gold’s and silver’s future. Whenever a given market fails to respond to an important signal that should make it move in a certain way, it is a sign that this market wants to move in the opposite direction.

Is the breakdown in the USD a problem by itself - i.e. does it invalidate the above bearish points? Not necessarily. The breakdown below the flag pattern is not confirmed and since the Jackson Hole Seminar has just started, the volatility could drive the USD back up in a flash.

All in all, today’s session is more bearish for the precious metals market than bullish even though they moved a bit higher - at least that’s the case based on what we’ve seen so far today.

As always, we’ll keep you - our subscribers - informed.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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