Gold prices opened 2016 at $1,076, in this morning’s trading the precious metal opened at $1,304 an ounce. That’s a 17.5% appreciation over 4 months. Silver has seen a 10% rise over the same period.
The broadest equity exchanges have only managed a1 % -2% rise this year so far after the worse opening of the year for stocks.
The weakening dollar is the driving force behind the surge in precious metals and crude oil, which is trading $15 off its 2016 lows.
The Dollar Index was trading at a high of 91.66 at the beginning of Feb. This morning’s price is 84.87, that’s a 7.5% decrease in the value of the greenback against other currencies.
To put it bluntly, the US dollar is feeling the pain of everything that ails this country. Slow to no economic growth is taking down the dollar’s “cleanest dirty shirt in the pile” status.
The panic buying of the dollar is over as China and Saudi Arabia move away from Treasuries and dollars and begin selling and buying commodities in yuan secretly.
I’ll have more tomorrow on this aspect being the true reason behind the mysterious meetings that the Federal Reserve had late last month.