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From its 74.97 low in mid-October, the US Dollar Index has bounced 1.8%. Occasional swings of a percentage point or two are to be expected, as markets never move in a straight line. So this latest bounce is not significant and in fact is hardly noticeable on the following chart.

Bear market rallies in the Dow Jones Industrials Average

October 28, 2009 – It wasn’t too many decades ago that the dollar was, as the saying went, “as good as gold”.  It was a truism, almost too obvious for mention because everyone understood the dollar’s essential attribute, namely, that it was redeemable into gold upon demand. This redeemability was a fundamental building block thatRead more

October 25, 2009 – Gold’s ongoing consolidation in the $1045-to-$1060 area is very constructive to its ongoing bull market.  However, end of months are always very tricky because of option expiry.  The gold cartel writes a lot of calls in their market interventions aimed at capping the gold price.  As a consequence, they often bombRead more

October 25, 2009 – Because people generally calculate the price of goods and services only in terms of the national currency of the country where they live, it is not easy for them to recognize what is happening to the value of the currency. To truly understand what is happening to the currency, they alsoRead more

October 21, 2009 – Evidence continues to emerge that the US dollar is headed for hyperinflation.  For example, consider why US stock markets are rising.  The Dow Jones Industrials, S&P 500 and other indices are not rising because the economy has started growing.  That won’t happen until employment stops falling, and there are no signsRead more

Gold breaks above $1000

There is a tug-of-war going on. On one side are those who want to buy physical gold under $1000 per ounce because they recognize both gold’s usefulness and the fact that it is undervalued.

The precious metals began a correction last week, which was fueled by gold’s inability to penetrate resistance above $1000 after several determined attempts.

The performance of the gold/silver ratio over the past month has been stunning. From a high of 68.0 on August 19, the ratio closed today in New York at 59.2, a remarkable 12.9% gain. In other words, the silver you own has outperformed, or appreciated, 12.9% more than your gold.