This is just a quick note about today’s upswing in gold along with the USD Index. You might be wondering why it’s happening and what it changes. In short, today’s pre-market action reflects significant monetary easing in the Eurozone. This is bearish for the euro (which pushes the USD Index higher) and at the same time it’s bullish for gold as it makes the yellow metal more attractive for the European investors.

While this move appears encouraging, its lasting power is doubtful. Please note that there was a similar (fake) gold and silver rally on Sep 6 - it was erased within a few hours.

The most important thing is that it doesn’t change any of the factors that we’ve been quoting in the recent Gold & Silver Trading Alerts. The USD Index is still likely in a massive uptrend, not just a short-term one and gold is likely to respond with a big decline, just like it did in the second half of the 90s.

There might be some temporary strength here, but it doesn’t change the overall bearish picture for the precious metals sector.

As always, we will keep you - our subscribers - informed.

Thank you.

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