Today, the USD Index has broken out (and we have already profited on it in Forex Trading Alerts) above the declining short-term support line and the outlook for it has improved for the short term. However, gold didn’t plunge substantially and it is at higher levels than it was yesterday at the same time. Does this strength in gold indicate a change in the medium-term trend?

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In the past few months, gold has been closely reflecting the changes in the USD Index. It is therefore reasonable to expect the major moves in the yellow metal (and thus in silver and miners) to depend on the major moves in the USD Index. The above provides key context for all other charts and it will continue to do so until gold starts moving higher along with the USD (we have not seen clues thereof recently). In today's alert, we discuss the outlook for the USD Index in great detail and it's definitely one of the alerts that should not be missed by those who want to catch the big moves in the precious metals sector.

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The USD Index declined quite profoundly yesterday, but it also reversed profoundly – thus forming a reversal hammer candlestick. The bullish implications are strengthened by the fact that the USD moved to its December 2016 low and slightly below the 38.2% Fibonacci retracement, before reversing. This means that a very important support was reached and that a tiny breakdown (below the retracement) was invalidated almost instantly. Will gold reverse based on the above, or will it rally based on the weakness in the euro?

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Silver rallied recently and at the first sight there’s nothing specific about the upswing, but after examining it closer, it appears that it’s a quite clear repeat of what we’ve already seen previously. What followed the previous pattern, was a very substantial and volatile price swing in the entire precious metals sector (it was particularly sizable in silver, though). History rhymes, so what can we expect to happen in the upcoming days and weeks?

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Gold made the headlines yesterday – the first page of bloomberg.com, and the article says that Trump’s policies have brought gold back to life. The USD’s action was quite decisive - it declined to new 2017 lows, however, gold’s action was not as significant - it remains below its 2017 high. Will gold’s revival really last long?

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