US Dollar Update

This is an excerpt of the weekend update sent to subscribers on Sunday. The focus on this portion is the US Dollar Index which will largely determine the direction of silver and gold in the years ahead.

.... but to put things into a longer perspective, look at the chart below. The aforementioned US Dollar Index is charted in green since its inception in the early 1970s when the dollar finally shrugged off any pretence to being linked to gold.

The darker line is simply the index divided by its 200 day moving average. I have drawn a horizontal line through its most significant peaks occurring in June 1981, March 1985, November 2008 and March 2015. Looking more closely at these peaks, the 1981 peak heralded a mere 4-month decline in the Dollar, but the 1985 peak was the precursor to a 7-year decline and the 2008 one to a 3-year decline. It is the perhaps no surprise that the most recent peak last year has so far watched over a 13-month decline.

But how much further will this dollar decline go? My money is on a period more in keeping with seven years rather than mere months. The dollar’s bull days are over; it is time for gold and silver to take the stage again!

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