Recent commentaries

With the dollar approaching a cyclical turning point and likely to rally, gold, silver and mining stocks will likely follow. This week, this indirect relationship is visible also through our traditional measures above. Meanwhile, silver is also approaching its own turning point.

While China still practices strict capital controls, its permission to allow the renminbi to be traded by a Chinese-controlled bank in the United States is seen as being a step closer towards currency liberalization. There will be risks along the way, one of which is
currency speculation.

The most important influence upon precious metals this week seems to be the general stock market and the outlook for stocks appears bearish for the following weeks, even though it’s not visible on a day to day basis. Will stocks drag silver lower?

The relationship between gold prices, inflation and interest rates are not straightforward – investor sentiment always takes the front seat. However, as Fed rates remain down, bullion appetite will remain strong and the dollar will continue to be fundamentally weak. With currencies not getting any stronger and inflationary pressures continuing to build, gold is likely to be well supported in 2011.

In our previous free essay we’ve mentioned that mining stocks are at a particularly important crossroad, and whichever they decide to move is likely to determine the way for the underlying metals as well. In the following article we will put another factor into the equation – the general stock market.