Actually if you think gold is a currency, which I do, then both gold and the US$ can move up if both are seen as safe haven currencies. I would much rather be holding PMs than US$ as a safe haven.
Citi's Silver (Lining) Playbook : http://www.zerohedge.com/news/2013-08-14/citis-silver-linings-playbook Excerpts: With Silver's strong recent run, Citi FX Technicals suggest the present technical set up is now starting to look very constructive. At the same time, they add, Gold is also starting to move higher; and trending moves in the precious metals (up or down) tend to be led by the Silver price and the Gold/Silver ratio remains supportive of that view again. Given that they remain cautious near term about the fortunes of the US Dollar, all of the above would suggest, Citi concludes, that the "playbook" is to be long Silver against the USD.
EURUSD - Still a danger of a double bottom forming
A decisive break above 1.3416 would confirm this pattern and suggest as high as 1.4080.
During this period from August 2010-April 2011 the equity market performed well (S&P up over 30% albeit after a 17% drawdown in the April-July period) and the US 10 year yield fell from 2.96% to 2.33% between August and October 2010.
So contrary to considered opinion, if we were to see some or all of these moves above materialize it is more consistent with Fed easing than Fed tapering. The Fed resumed bond purchases in August 2010 (having paused in June) as the economy faltered. By November 2010 it had done a complete “180 degree turn” and put QE 2 in place
As we stand at the moment opinion is growing that tapering will start in September. While the charts above do not necessarily say this will not happen, they do suggest that yet another attempt to “withdraw accommodation” may ultimately prove to be short-lived.
Right now as we watch how this dynamic evolves the charts above suggest that Long Silver looks to be one of the best trades to have in your “playbook”
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