Metals Rally As Dollar Fades
Generally, the leading industrial, and precious metal stocks will be the first equities to catch a bid when the U.S. Dollar Index declines intra-day. This morning, traders can easily see how the SPDR Gold Trust (ETF) (NYSEARCA:GLD), ProShares Ultra Silver (ETF) (NYSEARCA:AGQ), and the PowerShares DB Gold Double Long ETN (NYSEARCA:DGP) are all catching an early bid as the dollar retreats from the open. All of these trading vehicles will signal inflation in the stocks market and that is what will usually happen when the U.S. Dollar Index declines.
Traders can also see strength in many of the leading industrial and base metal stocks. Leading stocks such as Freeport-McMoRan Copper & Gold Inc (NYSE:FCX), Rio Tinto plc (NYSE:RIO), and BHP Billiton Limited (NYSE:BHP) are all trading higher this morning. Traders should realize that if the U.S. Dollar Index started to trade higher all these stocks could pullback from the morning highs. As long as the U.S. Dollar continues to fade or trade lower during the session the metal stocks will likely hold up fine today.