The U.S. Dollar is Turning Into a Bad Kenny Chesney Song

One of the main pieces of the puzzle in terms of whether precious metals and miners are truly on the cusp of a new leg higher would be if the U.S. Dollar, or "King Dollar," actually having no clothes. For if the King (Dollar) has no clothes, and definitively loses its attempt to regain previously-broken fifteen-month support, as illustrated below on the UUP (Dollar ETF) weekly chart, then the inverse relationship with gold and miners would seem to dictate a new leg higher for them. 

The underlying macro logic here would be that The Fed no longer will raise rates, and will possibly even begin to ease again. If so, the Dollar understandably weakens and the metals and miners start to sniff out a weak Fed beholden to markets, completely ignoring any inflationary signals in favor of fighting all things deflation. 

And that UUP weekly sure is looking vulnerable now, with a solid red candle to cap off the holiday-shortened week. Any further downside next week ought to give gold bugs the initiative to keep pushing miners higher. 

So while the King Dollar may still have some clothes on for now. To put a new twist on the Kenny Chesney song, "No shoes, No shirt...we may have a problem."