Gold flies as FIN is in
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Featuring views and opinions written by market professionals, not staff journalists.
This past Tuesday (04 April), Gold flew commensurate with affirmation of Finland having formally joined NATO. Indeed now that FIN is in, fast and furiously did Gold fly as is its wont upon implicitly negative geo-political alerts. Explicitly here, 'tis perceptively yet another step closer to enhanced expansion of military activity along the some 1,320km of Russo/Finnish frontier.
Thus Gold swiftly garnered the bid per this view across the entirety of Tuesday's trading session, price in stark ascension upon Finland staking a claim in NATO:
Indeed for the abbreviated trading week, price reaching as high as 2049, Gold closed above 2000 for all four days, not having settled above that "milestone level" in better than a year (when the RUS/UKR war had broken out). And specific to Tuesday, Gold's 49-point low-to-high run ranks third-best thus far in 2023.
'Course, you long-time readers of the Gold Update well know that geo-political price spikes typically are short-lived. Gold faded come Thursday to as low as 2017 in settling out the week that day at 2024. And regardless of perhaps more price fade in the offing, Gold's broader picture looks as happy as a clam in turning to the weekly bars, their blue-dotted parabolic Long trend now four weeks in duration. Further, our sights remain set on Gold eclipsing its All-Time High (2089) with furtherance toward the mid-2100s as we've reasoned in recent writings:
"But mmb, what about those (in your words) COMEX culprits that keep price suppressed?"
Squire, with all the reports crossing the transom here of sovereigns on the buy, investment banks on the buy, and even individuals claiming they're on the buy, those that would suppress may themselves be suppressed ... at least of late. Last Tuesday's swift price spike surely sent some suppressing Shorts to the s**ter in distress. Moreover, Gold's moneyflow (change x volume) year-to-date has had foundational strength during rallies. The following chart shows us Gold's daily closing price thus far during 2023, the green line depicting the cumulative moneyflow. Note the red encirclings of flow "exceeding" price:
And speaking of "dough", whilst we oft quip that "Gold plays no currency favourites", price so far in 2023 is a mirror image of the buckling buck:
And from the "Oh By The Way Dept.", despite the recent ceasing of Credit Suisse, the Almighty Franc has been on the increase: from 03 November's low of $0.9901, the Swissie has since risen some +13.1% against the Dollar to $1.1202 this past Wednesday. (Not to belabour the point, but as some of you fellow oldsters know, from the Franc's exchange rate of just 25¢ back in '72, such increase as of Wednesday is +348%, just in case yer scorin' in Interlaken ... "Noch ein kirschwasser, bitte?").
Buckling, too, of late is the Economic Barometer. For this past week's stream of 12 incoming metrics, eight were worse period-over-period, notably including March's Payrolls creation per both ADP and the Bureau of Labor Statistics (even as Unemployment dipped a pip), and the Institute for Supply Management's readings for both Manufacturing and Services. As well, February's Factory Orders shrank for the third month in the last four, whilst the month's Trade Deficit was the worst since last October. Thus, this is what happens:
Also sensing economic storm clouds at JPM is one Jamie "Fee for Me" Dimon as the International Monetary Fund looks to the weakest world growth in better than 30 years. Indeed, The World Bank points globally to a "Lost Decade". Yet ever-feisty Cleveland FedPrez Loretta "Get Back" Mester says it may take another two years to bring inflation back down to 2%. (Can you say "recession"?)
Then lest we forget, there's the stock market. Early as 'tis in Q1 Earnings Season, what you hear (with but 15 of some 2,000 companies having thus far reported) is that 93% (14) having beaten estimates! What you don't hear is that only 40% (6) actually improved their bottom lines year-over-year. Oops. Is it any wonder our "live" price/earnings ratio for the S&P 500 settled the week at 47.3x? "Hey! Three-month U.S. Treasury dough is yielding 4.710%!"
We next yield to Gold's upward path per our two-panel graphic featuring price's daily bars from three months ago-to-date on the left, and the 10-day Market Profile on the right. In the latter, mind that 2039 apex at which 45,179 contracts traded in just these last three days...
Sister Silver has been even more Super in her like graphic, so much so as to drive the Gold/Silver ratio down to its lowest level -- now 80.5x -- since 26 January. 'Course, were Silver priced today per the ratio's century-to-date average of 67.4x, she'd be at 30.01 ... "Got Silver?"
So there we'll "Finnish" for this week. Shall Gold recline a bit further following its geo-political favour?
"Hang on a sec, mmb: PRC state media reports exercises in the Taiwan Strait to proceed to circle the island..."
So, Squire, perhaps Gold 2039 shan't be resistive. (Might a new All-Time High be just in time for next week's 700th Edition of The Gold Update?) And StateSide, inflation reads for March are due at both the Retail and Wholesale levels, along with expected shrinkage in Retail Sales. Have you thus hoisted your Golden sails?