GoldFixPM: The 1970's Stagflation Analog
PM Posts |
Housekeeping: This is the PM GoldFix post combining AM emails with additional intraday posts.
Contents
Morning Rundown:
Macro-Economics/Commodities:
Geopolitics/Elections:
Founders:
(NEW) GOLDFIX Intraday Chat
Market Recap as warranted
Morning Rundown:
Macro-Economics/Commodities:
Geopolitics/Elections:
n/a
Founders:
GOLDFIX Intraday Chat:
Market Recap:
Good afternoon.
Be sure to check out the GOLDFIX Intraday Chat right above for some previews of Hartnett’s slides and other info.
Gold is down $55 as of this writing at 2:15 PM. By all rights gold should be lower. Not for several reasons. There really are not that many long speculators in gold right now. The market is being pushed down by banks taking the opportunity to sell on dollar strength. They are reinforcing the old correlation right now. Nothing about this week is bullish for next week from either a technical or observed flow point of view.
However, the market has had three chances to get below the $3280 area And failed to unite even more momentum lower. Someone has an order there again. Orders not filled. Order doesn't care about the dollar. Normally these are not the kind of things we pay much attention to. There were several moments like this most of which we expected a breakdown, but it never materialized. We're including the chart from last year showing one such example. If the pattern plays out again you'll see the market test this recent low tepidly over a couple of days, and then if an event comes out whether it be data based or geopolitically driven gold could re-rally.
Eventually we figured out that that pattern last year was basically a big buyer who paused to let it back off and then started reaccumulating, or adding at levels. Back then we were pretty sure China was involved in that buying. And we're pretty sure China is evolved in the buying now. The question is, is it a valid pattern again or are we just whistling dixie. We'll see. But objectively speaking that is a very nasty evening star.
The general tone of the stock market today as measured by short term interest rates have turned very dovish. That may be what's actually contributing to gold’s stability here. Chair Powell is almost entirely focused on inflation right now. Next week is pce. So, if PCE comes in very benign, Powell may have the cover he needs to cut as early as May. The more likely scenario is his cut will come in the second half of the year unless the bond market gets extremely stable extremely fast. Frankly after the last two weeks, bonds seemed pretty good. President Trump, and Secretary Bessent may have gotten the market to pause long enough to catch its breath and act more normally. We will see.
This weekend we have a bunch of analysis to share.
The full breakdown of the JP Morgan $4000 gold report,
Hartnett's flow show, and a couple all their surprises
Enjoy the weekend all!
Good Night