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Gold bulls on parade, S&P setup for a black Monday?

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

Monday, I wrote that my base case for the S&P is that prices are headed to the 200-week average. The breach of the trendline is turning out to be significant; we can’t tell the future, but we can let the trendline be a guide.

Even now, prior to prices getting to the 200-week moving average (if they even do), I am anticipating the flip to the long side. My feeling is that time will coincide with despondent sentiment. But I don’t think we are there yet, and the last few days of panic can be brutal (as gold bugs may know).

Beyond the bullish stance I have maintained on stacking gold, on Tuesday, I suggested a trade to short Bitcoin and long gold, citing the XAU/BTC ratio as a basis; that trade is playing out. As I write, gold is hitting the 2k spot, up $35+ from Tuesday morning. Below is a 2-hour chart; regular readers should be more than familiar with triangles breaking to the upside…

Bitcoin trades around $33,500 right now, down from $35,000 Tuesday morning. Still, as I also wrote Tuesday, I remain bullish on Bitcoin in the longer term and would be looking to close the short and add to a stack at around 31800, still as the base case.

Thanks and have a great weekend.

By

Jonathan Da Silva

Contributing to kitco.com

Contact jdasilva@kitco.com
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.