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    Precious Metals: Breakout In Play?

    http://aheadoftheherd.com/1Articles/...isHubbartt.htm
    Last edited by rick; January 23rd, 2018, 06:46 AM.

  • #2
    Gold hits 4-month peak after US welcomes weaker dollar

    https://www.cnbc.com/2018/01/23/gold...s-further.html

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    • #3
      Dollar Hits New Low After Mnuchin Says Weakness Aids Trade; Some market participants say an end to the dollar's drop may not be imminent

      Wednesday, January 24, 2018, 1:41 PM ET
      By Mike Bird and Saumya Vaishampayan

      The U.S. dollar hit another three-year low against a basket of leading global currencies, a continuing rout that accelerated Wednesday after U.S. Treasury Secretary Steven Mnuchin said a weaker dollar was good for trade.

      The comments added to the greenback's woes and rippled across global markets, boosting the price of metals and emerging market assets, halting the rally in European and Japanese shares, and pushing currencies like the British pound, yen and euro higher. But the decline also comes as Treasury yields rise to a three-year high, an unusual trend that investors are trying to grapple with.

      The ICE U.S. Dollar Index, which measures the dollar against other currencies, fell below 90 for the first time since December 2014. The dollar's decline means that more than half of the dollar's 30% gain during its bull run between 2014 and the end of 2016 has been erased.

      Mr. Mnuchin's remarks at the World Economic Forum in Davos, Switzerland, hastened the dollar's retreat as the comments strayed from the more neutral statements of past U.S. Treasury secretaries.

      "A weaker dollar is good for trade," Mr. Mnuchin said. "In the longer term, a stronger dollar is a reflection of the strength of the U.S. economy."

      Last year, in his nomination hearing, Mr. Mnuchin backed a strong dollar but acknowledged that it hurts the country's ability to trade, echoing comments made at the time by President Donald Trump .

      The comments represent a different tone than previous administrations. "They've departed from a traditional dollar policy where the Treasury Department would usually avoid commenting on the currency's value. They see an interest in terms of their America First policy in seeing a weaker dollar," said Viraj Patel , foreign exchange strategist at ING Bank .

      "Whatever is actually driving the fall, they're quite happy to see it. It may be global growth that's causing the dollar to weaken, but the administration is happy to champion the drop," he added.

      The U.S. government doesn't directly attempt to set the value of the dollar, but many policies on issues like trade and tax, as well as appointments to the Federal Reserve can indirectly impact the greenback's strength.

      The dollar dropped as far as 89.21 in U.S. afternoon trading, down 1% from late Tuesday, which means the currency has fallen by more than 13% from its peak in December 2016.

      The dollar lost 1.1% against the yen on Wednesday, falling to 109.06, its weakest point against the Japanese currency since September. The British pound's rise against the dollar was particularly sharp, climbing by 1.5% to $1.422 and reaching its highest level since the June 2016 Brexit referendum.

      The decline is partly driven by a growing belief that major central banks will shift away from their ultra-easy monetary policies in 2018.

      While analysts expect the U.S. Federal Reserve to raise interest rates this year , the change in outlook for its global peers has become a more powerful force in currency markets. Some central banks, like the Bank of Canada and Bank of England , have started raising rates.

      "It's no longer only the U.S. raising by itself," said Kisoo Park, a global bond manager at Manulife Asset Management in Hong Kong.

      But many analysts question just how quickly they will tighten, an idea that could be put to the test this week when the European Central Bank meets on Thursday.

      The currency market's conviction that central banks will tighten policy in 2018 has become so firm that more-cautious outlooks from policy makers are often ignored. The yen strengthened against the dollar Wednesday, even after Bank of Japan Gov. Haruhiko Kuroda took pains a day earlier to clamp down on speculation that the bank would lift rates this year .

      The dollar's decline has occurred despite a surge in U.S. Treasury yields—the benchmark 10-year Treasury yield this week hit 2.663%, the highest since April 2014, though it recently pulled back to 2.658%. That is an unusual trend. Higher U.S. government bond yields typically make the dollar more appealing to investors, especially as global interest rates remain low. And yet, the dollar index is on track for its worst monthly performance since July.

      "I've been watching FX for 10 years, and it's never happened before on this scale," said Gareth Berry, a foreign exchange and rates strategist at Macquarie Bank in Singapore, pointing to the divergence between Treasury yields and the dollar.

      However, the euro is rallying. The single currency has surged 14% against the dollar in the past 12 months, as robust economic growth has helped prompt the European Central Bank to begin reducing the size of its massive bond-buying program.

      "When you have synchronized global growth upswings, when you see a rise almost everywhere in the world and an upswing in trade, those tend to be weak periods for the dollar," said Kamakshya Trivedi, co-head of global foreign exchange strategy at Goldman Sachs .

      Analysts are also monitoring how much money U.S. companies could bring home under the new tax law , though the foreign-exchange impact isn't clear-cut because much of that cash is stashed in U.S. dollars.

      Another factor pressuring the U.S. currency is the expectation of growing budget deficits. Previous periods of U.S. tax cuts have resulted in a weaker dollar, according to analysts at BNP Paribas .

      As the dollar falls a host of global markets are getting a lift.

      Many dollar-priced commodities, including gold and copper, have benefited from a fall in the greenback, which makes them cheaper to buy for holders of other currencies.

      Gold hit a five-month high Wednesday, trading at $1,357 a troy ounce.

      The Bloomberg Commodity Index has risen by 8% in the last six months to its highest level in a year and a half. A weaker dollar has been a factor in oil's recent sharp appreciation, analysts say. Brent crude, the international oil benchmark, is up 44% in last six months, hitting $70 per barrel, it highest level in over three years.

      Emerging market equities have boomed as the dollar has weakened. The MSCI EM, a basket of emerging market stocks, has risen by 37% since the beginning of 2017, around the time when the greenback peaked. In dollar terms, the index has risen by more than 45%.


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      • #4
        Small remains beautiful for gold mining acquisitions

        http://www.mining.com/web/small-rema...-acquisitions/

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        • #5
          Controlled Demolition of the Markets – Dollar, Next Treasuries, Then Stocks – Gold, Silver and PM Stocks to Soar

          http://news.goldseek.com/CliveMaund/1516975121.php

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