Golden path to all time highs
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
A weekly close over $1930 today opens the door for traders of gold to catch a ride to $2000/10 in my opinion; simply said, I think the price will fill the space between the yellow lines on the weekly chart below, should the close over $1930 occur.
Especially note how although the price got past $1960 in January on a few occasions, bulls failed to put up a weekly close above $1930 each time (caution was suggested at $1925 then).
I wrote three weeks ago: "In my opinion, the Fed won't risk driving a full-on secular stock bear and gold is probably sniffing that out" So far, all is tracking accordingly, including in the stock market, which continues to hold that crucial breakout line. The S&P 500 futures weekly chart is updated below.
Last week, the probability of a FED rate hike for next week had fallen to 60%. Expectations have since clawed back to just under 80% again today.
There is no doubt that rising and/or stable (which there is no stability in debt right now) asset prices may yet provide a runway for the FED to hike next week, BUT - I think we would have to see the probability reach 90% or greater (some might argue 100%) for that to happen under current circumstances. Jerome Powell has talked a lot about how steadfast a course the FED must remain on; I think his resolve is just now being challenged.
Small Caution: Should the probability of a 25 BP hike reach 100%, it is a done deal, and traders may want to consider that the event may be a "sell the news" in everything, at least to the extent of a temporary pullback. Yes, perhaps just a pullback; this hike is almost fully priced in and would likely be all the way there if banks didn't fail last week (hah!).
Thanks, and gave a great weekend.