Gold turns marginally higher in early trading
Rockefeller International’s Sharma says a new, post-dollar world is coming

(USAGOLD โ€“ 8/29/2022) โ€“ Gold turned marginally higher in early trading as the smoke cleared from Friday’s Fed-inspired Wall Street shellacking โ€“ at least for now. It is up $1 at $1741. Silver is down 18ยข at $18.80. The damage to the gold price Friday was not nearly as severe as what occurred in the stock and bond markets, and those markets look wobbly again this morning. As has been the case for much of the year, the dollar rose as most everything else dropped.

Friday’s action aside, Rockefeller International’s Ruchir Sharma warns that a major turnaround may loom for the US dollar based on a confluence of historical factors, much like what occurred under similar circumstances in the early 2000s. “What happened two decades ago,” he writes in a Financial Times editorial, “suggests the dollar is closer to peaking than rallying further. Even as US stocks fell in the dotcom bust, the dollar continued rising, before entering a decline that started in 2002 and lasted six years. A similar turning point may be near. And this time, the US currency’s decline could last even longer.” Kuchir’s editorial is headlined, “A post-dollar world is coming.”

Gold and the US Dollar Index
(%, 1971-present)
overlay line chart showing gold and US Dollar Index 1971-Aug2022
Chart courtesy of TradingView.com

Chart note: If Kuchir is correct that the dollar is peaking (and he makes a compelling argument), it will fall in line with the progression of lower highs shown in the long-term chart above. Those long-term lower highs have preceded lower lows, and those lower lows, in turn, have coincided with sharp increases in the gold price, particularly in the period 2000 to 2011.

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