E Gold Need Consumer Sentiment To Tank

Overall, it looks like the US economy is trying to recover. The Fed moved too far with interest rates and did an about-face early this year. The stock markets are nearing their 2018 highs, and some stocks have already broken out. At the moment, I think the US postponed a recession.

The economic data I monitor was skewed dramatically by the government shutdown and plunging stock market late last year. It’s been difficult to gauge the true employment and manufacturing numbers. On the surface, it looks like most of those aggregates have stabilized.

For example, consumer sentiment crashed late last year reaching a value of 91. That 10% plunge broke the multi-year trendline. It looked like a legitimate breakdown. Values have since stabilized and are once again approaching the 100 level (see chart below).

CONSUMER SENTIMENT 

For gold to break out in a big way, consumer sentiment needs to tank. It dipped sharply breaking the trendline in late 2018, likely a result of the Federal shutdown and plunging stock market. It has since recovered and is trying to recapture the trendline. Dropping below 90 would confirm a breakdown and new bull trend in gold.

GOLD WEEKLY

As long as gold remains below $1325, we believe prices should finish correcting into the next 6-month cycle low around the $1250 level. We believe the long-term sideways consolidation will result in a bullish breakout above $1380; it’s just a matter of when.

GOLD

The daily chart found support at $1285 and prices are bouncing. We could see another rebound to upper trendline. Overall, we are expecting a decline to the 200-day MA.

PALLADIUM

Prices are down sharply, the trend may have peaked at $1576.90. The speculative money that fueled palladium’s rise may now be entering the platinum market.

PLATINUM VS. PALLADIUM RATIO

After reaching 2001 levels, the platinum/palladium ratio seems to be bottoming. Meaning, platinum should rise in value compared to palladium which may decline.

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