Gold Finds Footing, Fed Speak Stewing

 

No sooner had we penned last week's piece ("Gold Drops Exceedingly; Fed Ducks Reality") wherein was written with respect to the Fed...

"...That they see two Fed Funds rate increases the by end of 2023? How about by the end of this year?..."

...when (cue Fed Speak) up popped St. Louis Fed Prez James "Bullish" Bullard stating inflation is more than they'd just expected, such that a rate hike may come next year. Then chiming in with same came Atlanta Fed Prez Raphael "Ready to Raise" Bostic. At the same time, Minneapolis Fed Prez Neel "Keep Cash a-Comin'" Kashkari says they can slide without a rate rise beyond 2023. (Is that deflationary-depression-speak?) Too, New York Fed Prez John "It's All Good" Williams still leans to keeping the spigots open. Stewing away are the Fed Prez!

Still, diplomatically maintaining equilibrium is Federal Reserve Chairman Jerome "Please 'Em All" Powell pointing out to Congress that whilst the economy has shown "sustained improvement", it nonetheless has "a long way to go". (See further down our Econ Baro).

'Course going down Mexico-way, they're not waiting another day, Banxico boosting their lending rate by 0.25% (to 4.25%), their first increase in two years.

But the week's real kicker was Treas Sec Janet "Old Yeller" Yellen stating with hat-in-hand to Congress that the USA defaulting on its DEBT would be "unthinkable"; (that really would wreck stock markets right 'round the world). Nothing like issuing DEBT in perpetuity, eh? "Got Bonds?" We hope not. "Got Gold?" We hope so.

And indeed with all the Fed Speak and weaker economic data throughout the week, Gold -- the recent decline for which was well overdone -- finally found some footing, albeit narrowly so. Gold's "expected weekly trading range" for that just past was 57 points: but only a range of 32 points actually was traded, second narrowest year-to-date. Moreover as we go to Gold's weekly bars from a year ago-to-date, the present parabolic Long trend is still barely in place, price needing to stay above 1764 in the new week to avoid such trend flipping to Short. But the broad trend as measured by the diagonal dashed line has rotated a tad more negatively:

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