Gold & the jobs report: investor tactics
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
- For many years, gold has had a rough general tendency to decline ahead of the US jobs report, and then rally after the release of the report.
- The next report is scheduled for this Friday.
- Double-click to enlarge. A dip to $1815 now would be just what the "technical analysis doctor" ordered, to create an inverse H&S pattern right shoulder… and a post-report rally to $1885.
- Big bank FOREX traders appear to have abandoned the yen as their main safe-haven currency. That's restored lustre to the relationship of the dollar versus gold.
- For a look at the dollar (basis DXY). Double-click to enlarge. While the dollar could rally into the jobs report (and with a speech from Fed chair Jay), the March 16 ECB announcement should be the catalyst that begins the next major decline.
- The Fed has been hiking more aggressively than the ECB, empowering the dollar. Statements from both the Fed and the ECB suggest that's about to change.
- In the coming decades, China and India will become the main economic engines of the world and the dollar will become much less important than it is now.
- After he finishes his hideous war mongering in Ukraine and fails there, US President "Jackboot Joe" will likely borrow even more money, and try to use it for war with China in Taiwan.
- The current 2021-2025 war cycle may end before he's able to activate his macabre plan, and hopefully it does.
- What about Iran? Lithium and copper are best described as "the new oil". They are vital commodities as the world tries to switch from brown energy to green.
- If China doesn't take the Taiwan war bait, the US government may try "Plan B" and go to war with Iran, to steal the lithium.
- As empires fade, debt, loose morals, and international meddling become hallmarks of the decline. As the American empire fades into the sunset, the yuan and rupee will become more common in business transactions, and global citizens will have much more interest in the ultimate currency which is… gold!
- Double-click to enlarge. Oil is on the move again, rallying from an inverse H&S pattern and my $75 buy zone.
- If oil spikes higher, global inflation does too. In Europe, the citizens are more docile than tens of millions of heavily armed Americans. They have a much shorter fuse when it comes to putting up with government schemes that go badly awry.
- Jackboot Joe's deranged war mongering won't be tolerated by US citizens if oil rises back towards $130… let alone to $170 or $200.
- An astounding 60% of Americans are living P2P (paycheck to paycheck). This, while Joe and his entourage of war worshippers borrow insane amounts of money for funding their failed wars in faraway lands.
- A spike to $130-$170 for oil would likely see the P2P number rise to 70% or even 80%. At that point, food and fuel riots (and civil war?) would become a realistic scenario. Got gold?
- For a look at the mining stocks. Double-click to enlarge. While a junior mine stock investor needs to have a gambler's mindset, this CDNX daily chart suggests the junior market is currently a very good gamble!
- What about GDXJ? Double-click to enlarge. GDXJ is called a junior mining companies ETF, but many of its top holdings are senior producers!
- There's a bit more risk and potential reward with GDXJ than with GDX. I like it both. For GDXJ, a drooping C&H handle pattern appears to be in play.
- A lot of volatility in gold and the miners is likely until after the ECB meet (March 16) and the Fed meet (March 22).
- Double-click to enlarge this GDX chart. I predicted a 10% rally for most GDX component stocks from gold $1808, and that's played out on cue.
- Ahead of the jobs report, a dip towards $1815 is likely for gold, and from there a powerful rally to $1885 is probably the next card on the table.
- A double bottom for GDX at about $27 would fit with gold hitting $1815. From there, the GDX targets are $33, $37, and $40!
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