Forget About The Gold Stock Price Today Stay Focused On The Long-Term

stock market prices today

Today Stock Prices – Sometimes it can pay to step away from the daily gold share price action and remind ourselves why we are in a Great Gold Bull Market.

Just how heavy is the eighty level on the Dollar Index?

Take a look, you decide?

Chart 1 – US Dollar Index looking over the abyss

Gulp!

The Dollar Index ( a trade weighted index of the US Dollar vs. Other major currencies) is hanging off a cliff.

There is nothing but fresh air under eighty. Never in the history of the currency has it been breached. Some say the composition of the index has changed and based on the old weightings it might already be underwater. Ok, maybe so. But traders act on the charts and the above chart is pronouncing that 80 may have been tested one time too many and may very well fall.

In intermarket parlance there is a positive correlation between Bond Costs and the USD. That is, if the Buck moves lower, Bonds move lower (interest rates higher). Simple to trade you say? Aaahh but There’s a catch. There is a time and changing time lag to account for. The Dollar above made its latest highs around 2002. Interest rates only made their ultimate lows in mid-2003.

As time moves on, a continued deterioration in the Dollar will pull IRs far higher ( regardless of the foolishness of Asian central banking organizations recycling Dollars into US Bonds and keeping rates artificially low). Market forces ultimately win out and the trend is now definitively towards higher interest rates.

The counter balance for paper money assets like the Dollar and Bonds is real tangible assets. Ideally one’s that are not debt financed ( Real Estate ) and not economically delicate ( Oil and that leaves our favourite – Gold!

Gold’s major use is as an investment auto with a AAA+ credit history – Gold Bullion that is. Gold is best viewed as the anti-Dollar or a foreign currency with no sovereign home and whose supply cannot be manipulated by the deadly whims of politicians.

Sometimes it can pay to pay no mind to the gold price today and focus on the one undeniable truth. Gold is in its biggest Bull market in over 20 years as the US Greenback is mired in a secular bear market period.