Dollar continues to drive PMs

derryb

The $US index continues to determine (inversely) price movement for gold and silver. Today's 2 p.m. action confirms this. It might be easier for most to follow changing dollar index influences to know where PMs are heading since PM fundamentals tend to hold steady over the short term. Keep in mind that the 54% of the dollar index's weight is with the Euro. At approximately 2 p.m. the Euro gained strength. Barring a change in QE status, figure out short term euro direction and you have figured out short term PM direction. At least until Bernanke's appearance at Jackson Hole at the end of the month, the financial news out of Europe will be the baramoter.

NumbersUsacom

I'll be glad DerryB when Gold and Silver begin to move assertively on their merits consistently. We have seen them both delink at times from the dollar and the S&P, but then there is this sickening reversion to a comfortable inversely($) or favorable(S&P) buddy syndrome.

Gold and Silver both merit fundamentaly and popularly their own destinies, seperate and unique from all other lockstep reactions. Given time I beleieve the traders and investors (physical and paper) will disconnect unwittingly and we will see this come to pass.

cohodk

I thought it was the central banks driving prices?

DrBuster

My massive 1/10 panda purchase Friday spurred all this action. Banks, dollar/euro, pshaw.

tneig

I've been trying to follow the several different core opinions on what drives the prices, and there certainly seems to be a lot of major influences including the Dollar of course. There may be sudden unique circumstances that affect the supply and demand. And if the market can be manipulated, then that can come into play at any time they wish. So many big influences it seems.. I know I don't understand the paper side yet.

Geezs, %54 percent is significant. Is that new? I'm surprised the euro thing then hasn't sent us on more of a whirlwind of changes this summer.

Whats the next big % player in line behind that affecting the dollar?

derryb

<< <i>I thought it was the central banks driving prices? >>


There's more than one central bank - the ECB has a printing press of its own.

roadrunner

<< <i>I thought it was the central banks driving prices? >>



Them too, especially China who doesn't report their CB gold purchases.

But besides the dollar you also have real interest rates, debt, and monetary aggregates such as M0, M1, and M2. It's hard to separate any one of them as they are all inter-related.
Fwiw M0 has risen by $100 BILL in the past 4 weeks....following a 4 month decline (March-July) of -$160 BILL. The shift in M0 roughly correlates to gold's recent upturn.

derryb

ECB Printing Press Door Is Open