July 20, 2020 - (Gold Market Wire) Gold has touched the overhead horizontal resistance at $1818 and settled back slightly, in what now appears to be a preliminary to eventual breakthrough to higher levels. The chart as it stands:

We now have our challenge laid out, and there is increasing evidence that Gold will eventually make it through. Friday's late rally certainly helped, but it is the combination of Silver powering higher, and the US Dollar falling back against the Euro which is setting the tempo.

Right now, silver is having another explosive day to the upside.

Behind the movement in both precious metals, the true 'monetary metals' , and pointing to further gains, is the decline in the US Dollar vs. the Euro (and the Yen and Swiss Franc). While the inverse correlation between the Dollar and Gold hovers around 90, that relationship hasn't stopped Gold doing what it has done in the past two to three years, side by side with a rallying dollar.

The skill, as ever in markets, is in assessing which dynamic is beginning to prevail at a given moment, and which indicator is coming into the ascendency. As soon as one predominates, it usually fades... and after taking its time on the sidelines...then it comes back. The ebb and flow between various indicators is part of what trading is about, and right now, the weaker US Dollar is staring to move towards center stage. There doesn't seem to be much that can stop the Dollar coming under pressure on the road to the US Presidential election, but more and more what is also starting to appear in the mindset of the market is that the "conclusion" of the electoral process will produce no resolution to the increasing mountain of problems that are besetting the country. Neither side is, in any way, prepared to concede an electoral loss. The machinations now being set, over people voting without ID, over legal challenges to postal votes and a myriad of other issues could land the election outcome in the Supreme Court. That was a bad omer for democracy last time, an could be fatal this time.

The precious metals markets are conduits for those problems, and the relatively undervalued one, Silver, is getting re-valued, at much higher levels.There would appear to be more room to the upside for Silver, as it closes down the Gold/Silver ratio that got wildly out of line recently. The narrowing of that ratio will be further fuel to the fire of the Gold market...as their concurrent rise takes shape.