Make Kitco Your Homepage

Gold - An explosive setup is about to occur

Commentaries & Views

While the Coronavirus talks are being swept under the rug in a great WHO coverup, I believe that mainstream media is avoiding coverage on purpose in order to maintain order. Looking back at SARS in 2003 the number of cases was just over 8,000 and directly impacted the global markets. During the SARS episode we saw a massive hit to first quarter GDP in China and Emerging Markets. I would expect nothing more than the same results with the Coronavirus but with ten times the number of cases. Some of the latest headline updates are that Delta Airlines is suspending all China flights through April 30th and Starbucks has closed 2000 stores.

This economic impact will push Central Banks around the globe deeper into their quantitative easing ways. Remember in the past 12 months Central Banks have collectively cut interest rates over 80 times and with rates near rock bottom, they will have to use other methods to support their economies.

Looking at the total assets at the Federal Reserve we should see another increase back to all-time highs and in return boosting the precious metals complex.

*source federalreserve.gov

There are many factors that could affect the direction of the gold market so be sure to stay up to date on developments by registering for a 2-week trial of the Blue Line Futures Morning Express by clicking on the link here

The Blue Line Express Two-Week Free Trial Sign Up

While analyzing the current setup in gold on a weekly chart I believe a new floor is being set at $1550 an ounce with critical support at $1542.8. What I want to see occur is a breakout over $1600 and the recent highs challenged at $1619.6. This should open a new wave of buying with upside target of $1650. Use a 2-day close below $1542.8 as a risk management strategy and keep an eye on deteriorating economic data over the next quarter.

If you haven't ordered a complimentary 2020 Futures Calendar & Reference Guide, we will have some of these available to send out. This is your go-to resource for Government & Industry Report Dates, Contract Specifications, Futures and Options Expiration Dates. *Available to U.S. residents only.

You can request yours here:  Blue Line Futures 2020 Pocket Calendar

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.