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Calm Down, It‘s a Shallow Gold Correction

Stocks keep pushing higher after a day of indecision yesterday, and the signals are largely still very constructively aligned behind another upswing. Yes, stocks are moving overall up as we approach the Fed statement and press conference. It‘s the precious metals that are on the defensive – a fact I had been writing about both on Monday and Tuesday, as well as tweeting out extensively before leaving for the dentists‘ – I wish that visit was both easier and took less time, and I could prepare a longer analysis for you today instead.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 Outlook

tech, NYFANG and value

The sectoral composition of the SPX upswing, isn‘t exactly strongest, but that‘s no obstacle to the unfolding move higher. A measured one, prone to brief and shallow intraday pullbacks whose upward bias can‘t be denied though. That‘s the path of least resistance, and I do like also both smallcaps and emerging markets.

Gold Before the Opening Bell

gold and copper to 10-year Treasuries yield

The outlook for gold deteriorated during the second half of yesterday‘s trading as copper gave up some of its gains while long-dated Treasuries plunged. And overnight, gold felt obliged to fill the void, and went $10 down.

Precious Metals in the Now

gold, silver, miners and long-dated Treasuries

The situation is far from bleak – gold is nibbling at the bearish gap, but it‘s the miners that are providing more than a glimmer of hope. And as silver is losing altitude (short-term painful but of little consequence given how great a future awaits the white metal shortly), we‘re witnessing short-term rebalancing in the precious metals sector. Namely since long-dated yields have barely moved thus far and copper almost erased its overnight losses already.


The S&P 500 keeps pushing for new all time highs, and today‘s Fed isn‘t likely to change that materially. No, I‘m not looking for them making any noises about taking away the punch bowl.

Gold‘s downswing would likely prove short-lived, and miners would be pulling the PMs sector ahead again. Once the sector stabilizes in both time and price, silver would catch up again. Let‘s see how successful the Fed is today in selling the transitory inflation story and defending Treasuries, really.

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Monica Kingsley
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

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2 thoughts on “Calm Down, It‘s a Shallow Gold Correction”

  1. Hello dear Sandra! Of course I know (and a bunch of other more since the 2007-9 crisis), and I am familiar with his general key tenets (deflation, demographics). This isn't the first time he and the like are predicting any market crash really. Such headlines and positions work for catching the eyeballs, and I am not the first one to bring up the term fear porn here. Nothing against him or anyone else, but the markets are leaving such prognostications repeatedly in the dust. Let's make some money instead.

  2. Your wrote "The S&P 500 keeps pushing for new all time highs, and today‘s Fed isn‘t likely to change that materially. No, I‘m not looking for them making any noises about taking away the punch bowl." Not sure if you heard of Harry S. Dent, a couple of months ago, he predicted a massive market crash is April, well, it's April 28. Now he is predicting another massive June crash. By the way, he has been dead wrong about gold like forever. Lol

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