BRIEF COMMENT ON THE U.S.DOLLAR INDEX (1:30 pm ET)
The U.S. Dollar Index made an isolated low last week at 105.54 near the center of our general reversal zone. It then rallied from there to close above 106. The greenback seems to be finding a support line just above 106. If it can rally a bit more off this support, that could put downward pressure on gold and silver prices, both of which look like they could take a corrective breather from their steep rallies over the last two weeks. We will watch for this as it may give us a good buy spot in the precious metals. Alternatively, any breakdown below 106 in the dollar would likely boost these metal prices. We note that the next significant general reversal zone is coming up next Wednesday (Oct. 25 - Nov. 9), so the current gold and silver rally is not facing much resistance until then.
The U.S. Dollar Index made an isolated low last week at 105.54 near the center of our general reversal zone. It then rallied from there to close above 106. The greenback seems to be finding a support line just above 106. If it can rally a bit more off this support, that could put downward pressure on gold and silver prices, both of which look like they could take a corrective breather from their steep rallies over the last two weeks. We will watch for this as it may give us a good buy spot in the precious metals. Alternatively, any breakdown below 106 in the dollar would likely boost these metal prices. We note that the next significant general reversal zone is coming up next Wednesday (Oct. 25 - Nov. 9), so the current gold and silver rally is not facing much resistance until then.
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