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Strong Dollar Pressures Gold


The US economy’s relative strength against other major economies is keeping the dollar strong and expectations for an aggressive Fed intact. This could put additional pressure on gold and silver today. The gold market followed through on yesterday’s declines overnight but managed to hold above last week’s lows. That level, $1,699.10, could be a key bear/bull line today. Gold appeared to give up on its two-day rally yesterday after the dollar rallied to a new 20-year high and bond and notes traded to new contract lows. The dollar climbed to a new high overnight and is holding onto those gains this morning.

stacked gold bars


Platinum rallied sharply yesterday and held its gains overnight in defiance of the strong dollar and relatively weak gold market. Platinum has followed gold in the past, but it seems to be setting its own course this week. The market faces similar obstacles that gold and silver do, with underlying dollar strength and competition from interest bearing instruments undercutting investment interest.


Copper prices have been able to overcome Chinese demand concerns so far today, but further upside may be limited unless there is a significant turnaround in global risk sentiment. After falling to a new six-week low early yesterday, December copper regained upside momentum and went on to post a moderate gain on an outside-day session. The market has held a tight range so far today and is showing a mild loss this morning. China’s August unwrought copper imports were 26% above last year’s levels, but overall imports came in lower than trade forecasts, which casts a shadow over the market.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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