What Does the Future Look Like for the US Dollar?

The value of gold tends to be a solid indicator of economic health, particularly in North America, and more specifically in the United States.  This week, then, the value of gold seems to tell us that the US dollar is somewhat strong right now in the midst of worldwide economic unrest, but that could change. 

Indeed, the price of gold closed at a loss on Monday after one of the leading dollar indexes traded the commodity at its highest value since December. This resulted in lower demand for investors to use other currencies to buy precious metals. And, it seems, that investors are counting on taking refuge in the North American currency at a time when the dollar may be the only stable liquidity among global economic stalwarts.  

 With concerns over a slowing economy in China, political tensions and similarly slow growth amid Eurozone countries, and widespread global trade tensions, the dollar indeed seems like a safe place to hide. 

At least, that is the case for now.

First of all, April gold futures were last showing a downward trend, valued now at $8.10 per ounce (roughly 0.2 percent), at $1,310.40, on the New York Mercantile Exchange Comex division.  And, again, this is continuing from a fall last week, of 0.3 percent, which itself came after four other down sessions. 

However, it also looks like all metals are seeing the same trends.  March silver, for example, is down nearly 12 cents—about 0.8 percent—to $15.69 per ounce, mirroring a drop from the week prior. March copper also fell 0.7 percent—to $2.79 per pound—though this drop follows a gain of 1.4 percent from the previous week.  Also, April platinum futures fell 2 percent—o $786.60 per ounce—which continues the nearly 3 percent decline from the week before.  Finally, March palladium closed 1.1 percent down—at $1,356.80.

At the same time, consistent stagnation with the dollar in today’s market could alsob e an indication that traders continue to wait for better news that may never come. In fact, there has also been indication that many countries are more likely to pull out support for the dollar over the next few sessions.