GoldFix PM: 50 Day Moving Average Means Nothing Now
Bilateral Trade Deal Progress Report
Housekeeping: This is the PM GoldFix post combining AM emails with additional intraday posts.
Contents
Morning Rundown:
Macro-Economics/Commodities:
Geopolitics/Elections:
Founders:
GOLDFIX Intraday Chat
Market Recap as warranted
Morning Rundown:
Macro-Economics/Commodities:
Geopolitics/Elections:
Founders:
GOLDFIX Intraday Chat:
Community comments and insights…
Market Recap:
Gold was extremely strong. Silver started strong, keeping pace all night and the first half of the day and then backed off along with Copper and Platinum and stocks as the day wore on.
With reference to the last 72 hours: Gold cracked the 50 day moving average (yellow arrow below) on Friday. Sunday night bears pressed it looking to run stops. Those stops were triggered but a buyer, presumably China, was there on the lows Sunday night to catch the falling knife. We had hoped that this would cause the shorts to cover and were rewarded for that thought.
The market in two days time, which was pretty impressive, went back above the 50 day moving average the other way. This is good. Shorts closed, they lost money and that's the end of the moment. At this point, strange as it may seem to hear, the 50 day average means nothing. Wherever the market is, the 50 day average will matter when it picks a definitive slope either higher or lower. So if the market were to chop around back and forth in this area for a few days the 50 day moving average would lose its importance until it picks a slope higher or lower. That's how it will be traded from here on in.
Amateurs will buy it above, and then sell it below, and just lose money trading a flat line level. There is no trend in a market if the moving average is not sloping. Do not get your hopes up in either direction until you see something confirmed by a change in slope.
With that advice in mind know that we are Long silver and doubled our position yesterday (Friday) in the hopes that macro discretionary would come in in the new quarter. Our time frame for this to start happening is Monday at the latest.
This all makes even more sense when you look in context of the last three months. Gold has been in a range. Huge range but a range nonetheless. We marked that range off with Gray lines. Notice the silver range over that time frame is essentially bifurcated into, “they hate the silver” evolving into, “Oh **** silver's cheap”. And now here we are again waiting for a real signal.
Certainly the news or potential news on the fiscal and debt front drove the shorts to cover. Will it be enough to get people to get long again; too early to say. I would not be surprised if we chopped around sideways for another week.
Obviously this is all in context of the events that are coming up. The bill was passed today, so that's one event over with. You have the BRICS Summit, Basel three was supposed to start today, but we don't know. And then you have the trade war ceasefire ending on July 9th. That would be where the fireworks are based on how the market is reacting to news headlines. So if you're bullish gold you're betting on Trump headline volatility to return.
With that comment in mind we have attached the latest updates coming straight from a bank desk giving a progress report on the trade deal front. Have a good night
