Friday's session brought us an informative sign for the precious metals. This development took place in the USD, as the world reserve currency initially declined only to reverse and close higher. Interestingly, the precious metals sector didn't react with a decline. Gold, silver and miners all closed higher, so this question naturally follows - what can we make of their upswing? Let's explore how the short- and long-term are affected exactly.

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Yesterday's and today's pre-market price action in the precious metals sector has confirmed what we wrote in yesterday's Gold & Silver Trading Alert. The proximity of the triangle vertex reversal in the USD Index seems to be playing the key part in it. To say that the USD Index remains in an uptrend is like saying that Trump does not express love to Powell. It's true, but it doesn't convey the entire picture either. There are massive forces behind the USD's upswing and it's likely to continue for many months. But, on a short-term basis, the USD Index might fall simply because it's likely to form a bottom in the following days. And price has to decline for the bottom to form. In yesterday's Alert, we explained that there might be a very short-term upswing in gold and silver (and we took advantage of it in yesterday's Day Trading Signal), but that it's not likely to be particularly significant and that it's unlikely to last long. This remains 100% up to date also today.

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The Fed cut rates by 25 basis points and Trump then criticized the move as lacking vision and guts. In other words, we saw the most likely outcome. And what happened in light of it? Gold, silver, and mining stocks moved lower, while the USD Index moved higher. Everything as we described it. The move was not too significant, but in light of the fact that gold theoretically "should" rally in light of a rate cut, even the lack of rally is bearish. And we saw a downswing that was also confirmed by other parts of the PM market. The USD should decline given lower rates, and yet it's higher. Unlike gold, the USD is showing strength here. What's next?

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Both gold and silver moved higher yesterday but it were the miners that spiked. Looking at the last few sessions, have these moves changed anything? The FOMC releases its decision today, the markets are hesitating to move and it's nothing surprising. It is usually the case on Fed days (and around them) that we see increased intraday volatility that doesn't necessarily mean anything. Does it describe today's situation also?

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The USD Index soared relentlessly in the previous months and it happened in the face of more and more bearish news that should have made it decline. The USD Index showed strength even in light of US President's calls for zero or negative interest rates! Is there anything that the USD Index can't do right now? When will it's rally finally end? And most importantly for us - gold and silver investors - how will that relate to the upcoming gold & silver price moves?

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