We talked about both the technical and fundamental case for a weaker dollar yesterday.
The outlook for lower real interest rates is clearly dollar negative. And it plays into the long-term dollar cycles, which are in the early stages of a bear cycle.
That said, the dollar ripped higher today at 10am (EST).
And it was driven by the safe-haven feature of the dollar.
And this was the catalyst …
Zelensky took the stage at the UN and said Russia was planning attacks on Ukraine nuclear plants.
Forty-five minutes later, it was reported that the head of the Israeli army said they were preparing for a ground offensive in Lebanon.
And hours later, Putin was on the wires announcing that Russia is expanding "the category of states and military alliances subject to nuclear deterrence." If they get reliable information of an attack, aided by nuclear powers (Western world military alliance), he says they reserve the right to use nuclear weapons.
With the above in mind, we also talked about gold prices in my note yesterday.
It printed another new all-time high today. And even at record highs, the reasons to own gold continue to build: Falling real interest rates, fiscal and monetary policy profligacy, and now the dialing up of war rhetoric, which fuels safe have demand for gold.
