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Cold PCE provides hope?

Commentaries & Views

The FED has succeeded in raising rates in the most aggressive fashion in decades without causing stocks to melt down uncontrollably. Can we soon expect the mainstream economic media to begin pushing (incept) the idea of the beginnings of a "soft landing"?

Regardless, it doesn't look like gold will believe the story. Gold has begun moving up on weaker-than-expected inflation data. This may seem counterintuitive, but it points to the fact that the market is a discounting mechanism and perhaps that if the FED were to slow down or stop the rate hikes, another wave of inflationary pressure will follow.

Remember: gold moved up in 2020 in anticipation of the coming easy money leading to immediate inflation (which it did), and has gone sideways since the FED has begun trying to repair the self-inflicted damage.

Below is an updated 2-hour chart of SPY. The recent move down is in the process of retracing and the probability is now a gap fill to the upside on the timeframe shown. However, this would likely (probability) only lead to a lower high from a wider view.

The below is gold on a 2-hour timeframe as I type (pre PCE data release). The stochastic RSI indicator is already in the oversold condition, with gold making another higher low, while at the bottom of its Bollinger band range.

Thanks and have a great weekend.

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