Falling U.S. Dollar Saves The Markets Again
Once again, the U.S. Dollar Index futures (DX H2) sold off shortly after the opening bell rang at the New York Stock Exchange. Most traders should know that when the U.S. Dollar declines the major stock and commodity indexes will inflate and trade higher. That is certainly what has happened this afternoon. Earlier today, when the U.S. Dollar Index caught a strong bid higher the SPDR Dow Jones Industrial Average (NYSEARCA:DIA), and the SPDR S&P 500 Trust (NYSEARCA:SPY) all declined very quickly. These major indexes all recovered as soon as the U.S. Dollar Index sold off.
Leading commodities will also rally and trade higher when the U.S. Dollar Index declines. The iShares Silver Trust (NYSEARCA:SLV) is trading higher by $1.62 to $35.99 a share. Gold is also climbing today as the SPDR Gold Shares (NYSEARCA:GLD) are trading higher by $1.86 to $173.57 a share. Gold and silver are leading indicators of inflation. As many of you already know, higher gold and silver prices are a byproduct of a weaker U.S. Dollar Index.