Stocks Shaking Off Weak Tech As Gold Bottoms?

Coupled with the 4-chart big picture view from yesterday, it‘s my view that the gold market is laying the groundwork for its turning:

(…) Real rates are negative, nominal rates rose fast, and inflation expectations have been trending higher painfully slowly, not reflecting the jump in commodities or the key inflation precursor (food price inflation) just yet – these are the factors pressuring gold as the Fed‘s brinkmanship on inflation goes on.

Once the Fed moves to bring long-term rates under control through intervention – hello yield curve control or at least twist – then real rates would would be pressured to drop, which would be a lifeline for gold – the real questions now are how far gold is willing to drop before that, and when that Fed move would happen. Needless to add as a side note regarding the still very good economic growth (the expansion is still young), stagflation is what gold would really love.

silver, platinum and copper

Silver is carving out a bottom while both copper and platinum are turning higher already – these are That‘s the essence of one of my many profitable plays presented thus far – long silver short gold spread – clearly spelled out as more promising than waiting for gold upswing to arrive while the yellow metals‘ bullish signs have been appearing through Feb only to disappear, reappear, and so on.

Summary

Stocks haven‘t seen a real reversal yesterday, but more backing and filling till the tech finds bottom, appears due. The medium-term factors favor the bulls, but this correction isn‘t over yet, definitely not in time.

Now, gold can show some strength – and silver naturally even more. The signs overall favoring a rebound, are appearing with increasing clarity for the short term, and the nearest weeks will show whether we have made a sustainable bottom already, or whether the $1,670 zone will get tested thoroughly. The bulls have the upper hand now.

1 2 3 4
View single page >> |

Subscriber to Monica‘s Insider Club for trade calls and intraday updates.

Disclaimer: All essays, ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Monica Kingsley 4 months ago Author's comment

TLT finally rebounding today as well, taking pressure of the gold-TLT long-term chart I featured yesterday, check it out - how far will the discussed snapback rally carry the metals?

What if the bottom is in actually in? What if that was all there was to test in the key $1,670 zone? It's a thought worth entertaining while the PMs rally internals are fine. We're almost passing the $1,720 zone I look to see cleared first. Much more obviously needs to happen before I sound the bullish all clear.

Stocks, what about them? Strong tech open today, that's exactly what I had been trumpeting as a precondition - now, it's about clearing the 3,900+ zone with conviction...

Enjoy and profit on today's analysis!