Back in March 2008, as the Credit Crunch was biting, the US Dollar, as measured by the US Dollar Index (USDX), was bottoming after a drop of over six years fuelled by the War on Terror. Silver had previous topped out at about $21 and was later to visit $50 as the dollar faced the abyss again just above the 70 level. To date, that level has been the all time low for the USDX.
Looking at the 45 year chart for the USDX, it is clear the dollar has been on a downward trajectory interspersed with some rallies since 1985. As of 2008, the dollar has been in an 8 year rally. It is no coincidence that gold and silver have struggled during this time and precious metal investors will be wondering when the dollar will resume its 31 year bear?
While writing for subscribers on the US Dollar, another look at the USDX chart suggested that the dollar bull was beginning to outstay its welcome. Lines have been drawn between each high and low to highlight each dollar bull and bear.