Intraday Market Thoughts

Silver & USD House of Cards

by Ashraf Laidi
Jul 22, 2020 17:29

Silver's explosion to 7-year highs scores a big point in favour of the reflationary trade, which consists of ascending commodities, resilient equity indices and a falling US dollar. I have often said in the last 2-3 Premium videos that rallying silver was the remaining/necessary card in the Falling House of the US dollar. In order for the USD decline to transition from corrective phase to a secular bear market, silver must break out of its 20 ceiling as it is more of an industrial commodity than gold. What about Copper? More below. I've posted today's Premium video for subscribers, pointing out the potential twists on the EURUSD and XAUUSD course, while highlighting a few trades on indices.  

Silver's reflationary status is also shared by copper—known as the PhD in Economics for its close relation with the economic cycle -- but silver is considered as macro-driven as well as more speculative in nature. The reflation trade may get more wind in its sail if US crude closes above $42, which it currently seems to do. 

Equity traders shift to this evening's earnings from Tesla and Microsoft, with an eye on number of deliveries and the extent of earnings losses for the former; and cloud services sales for the latter.



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