One of the sign posts we watch here is the US dollar index. This index (monitored in the upper right portion of this blog) tells us if the dollar is gaining or losing value in relation to other currencies.
Most forecasters predicted the US dollar index would strengthen in 2014 due to the announced QE tapering from the FED and the expectation that a recovery was underway. Others like Jim Rickards said that a recovery was not sustainable and forecasted a pause in the tapering by this summer.
This CNBC article notes that so far the expected recovery in both the US economy and the US dollar index have not happened and offers some reasons why.
Jim Sinclair occasionally posts technical updates from Bo Polny (technical analyst) on his site related to both the US dollar and gold. Polny is on record stating the dollar will weaken this year and gold will rally. Here are the latest charts published by Jim Sinclair from Polny who is carefully watching a key support level for the US dollar index around the 79.30 level.
http://www.jsmineset.com/wp-content/uploads/2014/05/clip_image002.jpg
http://www.jsmineset.com/wp-content/uploads/2014/05/clip_image004.jpg
A break below 79 would be a negative sign. A rally above 80 would be a positive sign for the dollar.
Since this is a key sign post, we will monitor it and post updates from time to time on how the US dollar index is doing. Of course, you can easily follow it at the top right of this blog.
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