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These Two Currency Moves Will Determine The Next Move In Gold – Mike Swanson

The US stock market was closed yesterday for the Thanksgiving holiday, but on Tuesday it rallied following the release of the latest Federal Reserve meeting minutes that showed that most members want to do a 50 rate hike in December instead of a 75 point hike. That idea has been in the market for weeks and has helped spur a rally in precious metals and stocks. Meanwhile, the US dollar index has dipped.

Will that rally continue for gold?

The answer to that will be answered by the setup in these two currency ETFs.

The FXE ETF tracks the Euro.

Notice the indicator on the bottom of the chart, which measures the price correlation with FXE and gold on a 200-day average. It’s close to 1.00, meaning that if FXE rallies gold will too. The prices are moving up and down together.

I believe FXE bottomed in October and is setting up to rally with a simple bull flag triangle patter.

The same goes for FXF, which tracks the Swiss Franc.

As you can see FXF has a similar setup as FXE.

I bought a position in EWG a few weeks ago, an ETF for the German stock market.

Rises in the Euro and Franc help European markets relative to the US stock market.

EWG has been outperforming the S&P 500 since the end of September and I expect it will continue to do so now going forward.

Let’s see what these ETF’s do today.

BTW – I turned off the Facebook comments plugin.

Last week I made a post about how I am no longer posting on Twitter.

I also am dropping the Facebook comments app I activated a few weeks ago, because by end of the year I am going to set up a comments area integrated with this website with no need of help from these social media companies.

Hope you had a good Thanksgiving.

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