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Dollar and Precious Metals Outlook

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What to expect in the final week of February for precious metals, gold stocks, and dollar.

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This morning we are seeing the US Dollar Index move higher retesting a short-term breakdown resistance level. What this means is that the dollar fell below support and is not slowing drifting back up to test the breakdown level.

As we all know, once a support level is broken it then becomes resistance. So if that holds true with the current move in the dollar, we should see stocks and commodities find a short-term bottom and continue higher today or tomorrow from the looks of things.


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Gold has been pulling back the past couple of trading sessions on light volume with healthy price action. It has done the opposite of what the dollar did above. Gold broke through a key resistance level and is slowly drifting back down to test the breakout level to see if it is support. If so, then gold should continue higher in the coming days.


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Both silver and gold miner stocks are lagging the price of gold. They have yet to break through their key resistance levels. That being said, it could happen any day now as they have both been flirting with that level for a couple of trading sessions now.


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Crude oil continues to hold up strong and is headed straight for its key resistance levels without any real pullback. Chasing price action like this is not something do often because risk-reward is not in your favor. I am staying on the sidelines for oil until I see a setup that has more potential and less risk.


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The equities market remains in a strong uptrend at this time. I do feel a one- to three-week pause/pullback could take place at any time, but in the grand scheme of things we could be only halfway through this runaway stock market rally as noted in the video below.


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The equities market is going to gap down this morning, which is typical in a bull market. Remember, in an uptrend the stock market tends to gap lower at the open and close higher into the close. And it's the opposite in a down trend, with stocks gapping higher and sell-off through the trading session.

Watch my detailed video analysis for this week.

Editor's Note: Chris Vermeulen offers more content at his site, TheGoldAndOilGuy.com.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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