Historically gold and the US dollar tend to trade opposite to one another. That means when the dollar goes up gold goes down and when the dollar goes down gold goes up.
But this year both have gone up together as the gold action has been more closely tied to the action in the bond market than anything else. But eventually that will change and something interesting is happening with the US Dollar chart.
The US dollar had a strong rally in the middle of 2018, but has been going sideways now since June to the point where its 150 and 200-day moving averages are coming close together. It is now trading with support at $97 where you can draw a simple support trendline connecting its recent lows.
Meanwhile gold has resistance at $1525.
We seem to be heading to a point where the US dollar could break support while gold breaks resistance at the same time. That would be a strong driver of the next gold and silver rally.
Gold stocks of course already are turning up with the GDX making a nice move earlier this week with some select mining stocks really charging higher. After going to a new high in November Aftermath Silver has already made a new high this month.
-Mike
Disclosure: Mike Swanson owns a position in GDX and Aftermath Silver. Because Aftermath Silver is a small cap stock with less than $100 million in market cap he is placing himself on a voluntary 30-day trading restriction period from the date of this post in which he will not buy or sell shares of it.
