U.S. Dollar: A Bad Year, So Far

By Mary Anne and Pamela Aden

Mary Anne and Pamela Aden have earned their reputation as two of the world’s most influential investment analysts, writers and lecturers in their more than 35 years of publishing The Aden Forecast. The Aden Forecast is a monthly investment newsletter that covers U.S. and global stock markets, precious metals, foreign exchange markets, and U.S. and international interest rates and bonds.

With the current concern over the U.S. dollar’s performance, and the subsequent rise in the Gold/Silver Ratio (GSR), we thought you’d find this article intriguing. Please read the Aden Sisters comments to learn more about the U.S. dollar’s performance this year and its current outlook.

—Rich Checkan

The U.S. dollar fell further this month, posting its biggest quarterly drop in nearly seven years… The dollar is clearly bearish, and it’s headed lower in the months ahead.

How can we be so sure? Well, as you know, markets are always about probabilities.

Nothing is set in stone, and it’s therefore important to be flexible. But, if we stand back and look at what’s happening, the big picture is telling us the tide has turned. Here are a few of the reasons why…

Sentiment Has Shifted

Mainly, sentiment has shifted, and it’s driving the currency markets away from the U.S. dollar and into other currencies. Investors are concerned about the U.S., and there’s been a loss of confidence. Investors are feeling somewhat uncertain, especially foreign investors, so they’ve been lightening up on their dollars.

The U.S. economy has pros and cons going for it. But, in this uncertain climate, currency investors have generally ignored the good news and reacted to the bad news.

For example, higher U.S. interest rates would normally be good for the U.S. dollar. But, since rates are rising into a lackluster economy, it makes investors nervous. Also, with interest rates now poised to rise in other countries, it’s reducing the edge the dollar previously had.

Plus, it didn’t help that the IMF downgraded their forecast for U.S. growth, stating Trump’s target of 3% growth will be difficult to reach for several reasons, like an aging population and so on.

Then there’s the trade deficit (see chart). It’s still huge and this too is putting downward pressure on the U.S. dollar.

It’s also no secret that Trump wants a weaker dollar, because it will make U.S. exports more attractive and help boost the economy. So, he’s now getting what he wanted…

Dollar: Look at Downside

Looking at the U.S. dollar index, you’ll see what we mean…

Note the dollar index has stayed below its 65-week moving average, signaling the major trend remains down.

And as we pointed out last month, the dollar index could likely decline to about the 93 level. This is the next support near the 2015–16 lows.

Going a step further, if the dollar index breaks below 93, it could then continue down to 86.50. In other words, if the dollar index eventually drops below 86.50, it would be super bearish, signaling a big bear market is unfolding.

Euro: Best

The euro has benefitted the most. That’s mainly because the euro is the offset currency for the dollar. So, when the dollar declines, the euro rises the most.

The euro is also being boosted by more positive sentiment and better economic signs. The euro has remained bullish by staying above its moving average at 1.0980.

If it now stays above 1.15, it could then continue up to near 1.30. If so, that would be about another 10% gain from its current level.

As you can see, the U.S. dollar has been hit pretty hard this year. While this may not be good news for your wallet, it has been great news for the GSR, which has been veering close to 80 for months now. This just goes to show that ASI isn’t the only one seeing a trend with the U.S. dollar’s performance and its impact on the climbing gold and silver prices.

Because a high GSR signals lower gold and silver prices, now is a great opportunity add them to your investment portfolio before the U.S. dollar strengthens again. The current GSR is hovering around 76, which means gold is currently worth about 76 times more than silver. Compared to a low GSR, which signals inflated gold and silver prices, gold and silver are currently highly undervalued.

To take advantage of the GSR’s growth as a result of the falling U.S. dollar, we can now offer you 1-ounce gold Austrian Philharmonics for as low as Spot + $41 per ounce* and 1-ounce silver Austrian Philharmonics for as low as Spot + $1.99 per ounce*.

We have partnered with the Austrian Mint to offer exclusively to ASI readers FREE 1-ounce 2017 silver Austrian Philharmonics and the 175th Anniversary silver duet set with a qualified gold or silver Austrian Philharmonic purchase!

Now may be one of the best times to invest in gold and silver. Because the U.S. dollar is losing value, it’s important to secure your hard-earned wealth with assets that hold their value while the dollars you buy them with still have strength. For more information about how you can protect yourself from a declining dollar, call us at 800-831-0007 or email us.

If you enjoyed reading what our friends Mary Anne and Pamela had to say, be sure to sign up for The Aden Forecast here. It is one of our most read publications.

*Prices subject to change based on market fluctuation and product availability. Prices reflected are for cash, check or bank wire. Shipping is $15 for orders of 1 to 9 ounces of gold Austrian Philharmonics. Shipping on orders of 10 ounces or more of 1-ounce gold Austrian Philharmonics is free. Minimum order of 200 ounces of 1-ounce 2017 silver Austrian Philharmonics. Offer expires Friday, August 11, 2017.