By Adam Hamilton – Re-Blogged From http://www.zealllc.com
The US dollar has rocketed higher since early November’s US presidential election, rivaling the massive gains seen in the stock markets. With the world’s reserve currency catapulted to extreme secular highs, dollar euphoria has naturally exploded. Traders are overwhelmingly betting the dollar’s strong upside will continue. But this greed-drenched currency looks very toppy and ready to fall, which is very bullish for gold.
The US dollar’s recent stampede higher has been amazing, as evidenced by the venerable US Dollar Index. Launched way back in 1973, the USDX is the dominant and most-popular market gauge of how the US dollar is faring. Since Election Day 2016 alone, the USDX has soared 5.1% higher in merely six weeks! That isn’t much behind the flagship S&P 500 broad-market stock index’s 5.9% post-election rally.
But the post-election USDX surge is still far more extreme. The world’s handful of reserve currencies are decisively commanded by the US dollar. Because of the vast amounts of dollars flooding the globe, it has great inertia. Thus like an oil supertanker, the dollar’s moves tend to be gradual and unfold over a long time. The USDX usually moves with all the sound and fury of a tortoise, leisurely meandering around.