Gold gears up for its year-end rise
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
History doesn't already repeat itself -- and traders who blindly expect it to so do (i.e. sans subjective review) are oft flushed down the loo -- but 'tis the season to be jolly. For in looking per the above Scoreboard at Gold's weekly price tracks for each of the past three completed years, from here to New Years 'tis been up through the gears. And given Gold having settling out the week yesterday (Friday) at 1480, our entitled query from two missives ago "Shall Santa Gift Gold at 1500?" suggests he's primed to come through. Even our WestPalmBeacher friends can calculate that 1500 is a mere 20 points above this present 1480 level.
In fact, so near now is price to regaining 1500 that ole St. Nick could well arrive early. With seven trading days still to play into the so-called "night of nights", Gold's "expected daily trading range" is 14 points and its "expected weekly trading range" is 37 points. Seeking further encouragement for upside? Let's look straight-away at Gold's Weekly bars from a year ago-to-date...
...wherein we see the "support shelf" rectangle (1454-1434) having been diligent to its namesake, plus the red-dotted parabolic Short trend visually nearing its end. Indeed were 1509 to trade in the new week -- again a level mathematically within expected range -- the parabolic trend would then flip to Long with subsequent piling on from the celebratory New Year's throng. Hasn't happened yet, natch, but the above analytics are chomping at the upside bit. Further, we can all do our part by gifting Aunt Edith or Uncle Egbert with an Austrian Philharmonic or Chinese Panda Gold round. The point is: barring some fundamental fallout, Gold is driving back up the road to regain 1500, indeed end the year there unencumbered.
'Course, the packed pace of news flow these days is so furiously fast that the 11 trading days remaining in 2019 are subject to each and all of this, that and the other thing. The on-again-off-again U.S./China trade deal has yet again gone from off-again to on-again. Blondie Boris' Brexit is now implicit. Newly signed is the United States-Mexico-Canada Agreement. And in sheer enjoyment over everything, the earnings-less stock market has never been happier, the S&P 500 finishing the week at an all-time closing high of 3169, (our "live" price/earnings ratio having climbed to 37.4x). "Earnings, shmernings ... who needs 'em, eh?" Yet, our Economic Barometer has suddenly been so boffed about that it's lost all sense of near-term trend:
Notwithstanding the prior week's November StateSide jobs report (as we'd noted the robust Department of Labor Statistics version with a +71% monthly payrolls increase versus the ADP version's -45% decrease), there are degrees of gloom out there. November's core Export/Import pricing was deflationary as was the month's Producer Price Index; growth in the month's Retail Sales slowed and October's Business Inventories bloated. America's favourite do-it-yourself store Home Depot is pointing to next year's revenues being less than expected. And the latest from the "Business Roundtable" finds those at the top continuing to predict an economic growth drop.
All that noted, 'tis "all in" with respect to stocks. As updated daily, here from the website is the S&P 500's points change (red line) from three months ago-to-date along with its moneyflow (blue line) regressed into S&P points such that it is presented on the same scale. From the time the worksheet that drives this graphic was created back in 2005, we don't recall ever having seen this tight a fit between the S&P and its moneyflow. 'Tis one substantive up move for stocks: