(Kitco Commentary) - Hi all, picking up where we left off: On 05/12/2023, I wrote: "All the action I expected to happen in gold over the course of the winter looks to have been condensed into a few trading days."
That has definitely played out so far, and here's my opinion as of now: Gold, on the daily, is in what looks like a clear downward-sloping channel; chart below. My expectation would be for an upside break of the channel for a touch of 2050/55, which coincides with the top Bollinger band.
If that does happen, and bulls can keep the price above the breakout, a chance for a test of 2135 and possibly way beyond, materializes in my opinion; weekly chart below. Should bulls completely fail, (likely to be foreshadowed by a breach of 2000 to the downside), then the lowest, upward-sloping trendline is the target, somewhere around 1910 (as of now), in my opinion.
To me, the benefit of the doubt still goes to the bulls with the macroeconomic and political environment as it is. This weekly technical setup presents as yet another triangle threatening an upside break.
On 12/11/2023 regarding stocks “I do think stocks will continue with an upward bias – unless and until there becomes a reason for the FED to take action to loosen financial conditions. When that begins, I could imagine a slope of hope scenario emerging, where the price develops a pattern of lower highs and lower lows, propelled by what the market could interpret as an impotent series of 25 BP cuts. Would the [this} scenario be bullish for gold if it plays out? I certainly think so, and physical stackers can continue to act accordingly.
The stock market has gone on to all-time highs and if the FED needs a reason to cut – a droopy stock market checks that box. Perhaps the catalyst for a way overdue pullback is the belief that either the FED has overshot, or will continue to overshoot on hawkish policy. This morning – stocks sold off on a lower-than-expected GDP print, indicating that perhaps the market is seeing bad news as bad news again, at least for now, (considering any excuse to sell is probably a good one if you’re holding onto gains this high up).
Regular readers might know I had been a contrarian bull on stocks dating back to October 2023. I’m currently bearish on stocks with a view of much deeper lows, but we have to consider the possibility, even probability, that bad news, will, become good news again. For myself, the game plan in that scenario would look like buying a dip between 4800 and 4650, which I’m thinking will likely coincide with a touch of the 50-week MA orange line.
Thanks, and good luck.
