Recent commentaries

The USD Index is showing signs of reaching a local top (or the top is already in). While the correlation between precious metals and the USD Index (and even the general stock market) is weak at the moment, a weakening dollar would fuel likely a strong rally in precious metals. Technical indicators also indicate a breakout for silver.

Fiat money requires that consumers and investors and nations have faith in it, something the U.S. dollar is rapidly losing. As long as that continues to happen, people will turn to something tangible which they can trust - gold and silver. Indications from the stock market remain unclear, but volume levels and other indicators point to a strong possibility of higher prices for gold and mining stocks in the near-term.

The economic rebalancing of China, from an export driven economy to a domestic consumption-led one, is crucial in shaping the demand for metals in the future. The cornerstone of Chinese policies over the past decade has been its emphasis on infrastructure. Barring minor corrections in the short term, the Chinese growth story is not showing signs of letting up. However, in the interim, investors should realign portfolios replacing industrial metals with precious metals. Precious metals, particularly gold demand in China is expected to hold strong even in the event of a temporary stagnation in Chinese construction activities.

While the $600bn of stimulus money may not be particularly effective in today's economic reality, investing in gold and silver surely has been, and - given details provided in this week's free essay - will most likely continue to be.

Will the US Dollar's decline really create jobs in the US? Not everyone believes this scenario, and higher gold prices seem to support those, who doubt it.