A hidden driver could send gold soaring
The price of gold could see substantial upside as the U.S. dollar index continues sliding in value, some strategists are forecasting.
The greenback has declined nearly 9 percent against a basket of foreign currencies year to date as the likelihood of parts of President Donald Trump’s economic agenda getting underway has been called into question, and the prospect of further interest rate hikes from the Federal Reserve has pulled back.
The dollar index could certainly drop to the 92 mark (about 1.5 percent below its closing price Wednesday of 93.40), said Phillip Streible, senior market strategist at RJO Futures. And though these levels are important to watch in the dollar, what’s more interesting to him is the impact on gold prices and other commodities.
“We could really see other markets, like gold, push up through that $1,300 level. We could see silver recapture $18. We could see oil prices — they’ve already got some bullish fundamentals buoying them — but with the dollar selling off like this, you are probably going to see that … recapture $50 again,” he said Wednesday on CNBC’s “Trading Nation.”
PG View: There is nothing “hidden” about recent dollar weakness.