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Gold bounces

Commentaries & Views

(Kitco News) - Investors following my diatribes for the past few weeks bombarded me with amazing emails when I turned negative the gold market at $1,560 and silver at $19.40.

The market seemed overbought and some macro issues had shifted. The European offer to accept a delay in Brexit took the British pound up 400 pips. The Fed meeting of September indicated a split in consensus, with the possibility of another imminent rate cut, off the table. Chinese trade negotiations were looking better.

So our call that the market was heavy was not met with great enthusiasm from investors, who were reading that gold at $2,000 and silver at $25 was imminent. However, today, has changed my paradigm.

From a technical perspective, the market looks bad, (I can’t use the word I wanted). The ISM index indicates the U.S. is following the global economies into a slowdown/recession and the Fed is likely to be more aggressive at future meetings.

The industrial metals will lag, but gold should perform well in the immediate future.

Technically, I need gold above $1,497 to start and ideally through $1,520 again. I’m bullish gold, but not jumping up and down yet.

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