Gold’s Reclusion; Markets’ Confusion

‘Tis the Northern Hemisphere’s final day of spring:  a season of Gold price reclusion and overall markets’ confusion, further festooned with Fed follies, war worries, and ever-sustained super-inflated S&P 500 insanities.

Since Gold opened the first day of spring (20 March) at 4654, price has lost as much as -13.1% to 4046 (just back on 11 June) toward settling this past holiday-shortened week “officially” on Thursday at 4228 — or if you prefer — per yesterday’s (Friday’s) “trading halt” at 4173 toward settlement come Monday:  that’s right, this is a Saturday with COMEX Gold “halted” rather than “settled”.  When was the last weekend day that happened?  Cue San Francisco’s own Jake Holmes’ “Dazed and Confused”–[’67]

By either “halted” or “settled” price, after having peaked year-to-date at 5586 on 29 January, Gold has been in reclusive withdrawal throughout, today’s 4173 level a net decrease from that All-Time High by -25.3%, price all-in thus far for 2026 being -3.7% (having settled out last year at 4332).  Here ’tis by the day through the current 4173 “halt” toward Monday’s settle.  Note at the graphic’s lower right (per last week’s musical query “? ♫ Return to Fair Value ♫ ?”) price seemingly on approach to such 3952 level :

More broadly, from a year ago-to-date we’ve Gold’s weekly bars and parabolic trends, the latter having completed a 14th red-dotted Short week, such stint now tied for third in duration of the last ten ShortSiders since 02 July 2021:

“But shorting it is a bad idea, right mmb?”

As ever ’tis, Squire.  Smirking Smart Alec can go to his three-martini lunch Short Gold, only to return with event-driven price having severely gapped higher, his trading account frozen with a margin call he’ll never be able to accommodate.  (As a past pet example:  Alec could well have missed the Fed’s 18 March 2009 post-COMEX pit close annoucement to increase “M2” by $1.15T, resulting in Gold’s largest resumption gap up [+5.9%] so far this century).  Adieu Alec.

That cautioned, Gold today by various key trends continues in a technically negative mode, seven of the past ten weeks having settled net down, with price’s potential to tap Fair Value at 3952 as noted in the near-term balance.  That is -211 points below the present level (4173) in an environment spanning an expected weekly trading range of 281 points; (the daily is now 119).  

As to a fundamentally negative mode for Gold, we still sense the Federal Open Market Committee shall on 29 July vote (perhaps not unanimously) to raise the Bank’s Funds rate toward 4%, (the current 3.50%-3.75% target range again maintained per last Wednesday’s significantly restructured/shortened Policy Statement).  ‘Course the late-July vote shall be substantially slanted by next Thursday’s release of “Fed-favoured” Personal Consumption Expenditures for May:  ’twill be the final piece of the month’s inflation puzzle for which both the Consumer Price Index and Producer Price Index already have been received and remain radically above the Fed’s desire for an annualized +2.0% pace.

This week’s title incorporating “Markets’ Confusion”, let’s next turn to the Economic Barometer.  Messy as ever are the markets and now even the Baro!  To be sure, equities’ valuation has well-become a portfolio-theory axiom of the past; but so today has become the loss of near-term trend coherence:  staying power is evaporating as confusion is reigning!

As an inside deMeadville example, our renowned “Baby Blues” of 21-day linear regression trend consistency across all eight of the BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500) has been at best wandering rather than signaling.  To wit:  collectively for all eight markets, a “Baby Blues” signal to specifically Buy or Sell occurs on average once every nine trading days; (deep breath) …  there’s been but one across the past 36 trading days!  And ’twas to go Short the S&P 500 futures, the Index for which we still anticipate a -10% correction down into the 6800s, in spite of war relief or otherwise.  Either way per the below Baro, both its blue line and the S&P’s red line thus far through June are running out of puff.  And you know how it goes:  confusion breeds concern, the top then in turn, thus fear begins to burn:

“Maybe it’s all just consolidating, mmb…”

To your point, Squire, we shall in hindsight know.  But as to “The Now”, the ongoing effect of pricey Oil and its availability on both the StateSide economy and therein its pocketbooks (the Strait of Hormuz again being closed as we write), plus more expensive dough soon to pass through the Fed window, and the unsustainable price/earnings ratio of the S&P (48.5x) —oh say it ain’t so — ought elicit a bit of a blow.  Moreover, a -10% S&P correction really wouldn’t be that much, you know.  (Our occasionally-posted truly scary S&P chart this time we’ll forgo).

Instead, lets sally forth with Gold.  And per the caveat that yesterday’s trading is slated for Monday’s settle, here we’ve the two-panel graphic through Thursday of price’s daily bars from three months ago-to-date on the left and the 10-day Market Profile on the right.  The “Baby Blues” last triggered a Sell signal back on 22 April (price having settled that day +14% higher than now ’tis).  And for Profile resistance, the labeled 4361 stands starkly higher than today: 

Meanwhile, although Silver’s amplitude doesn’t precisely match that of Gold, the key turn dates are in sync per the daily bars (below left).  But far more congested than that for Gold is Silver’s Profile (below right), price appearing stymied either up or down, even as she just completed her 20th week of parabolic Short trend.  From her record high on 29 January at 121.79, she is now -46.7%.  Do medicate as needed, Sister Silver!

To close, we’ve this from “The Good News Dept.”  Century-to-date, “yield-less” Gold now at 4173 is +1,424% and Silver at 64.91 +1,299%.  By comparison, the (albeit very scant) yielding “Casino 500” today at 7501 is +631% (or +468% ex-dividends).

To be sure, the precious metals remain in near-to-medium term downtrends.  In fact, this past week the children’s writing pool over at the once-mighty Barron’s just figured it out (and we quote):  “[Gold] is dangerously close to bear market territory.”  (One wonders where’ve they’ve been since February).

Regardless, when FedHead Kevin “The Warrior” Warsh — dare we say “inevitably” — is called upon to bail out Bessent’s Treasury, look for Gold’s reclusiveness to morph into nothing short (no pun intended) of upside monstrousness.

Still — all that said — are you confused by that within your war chest?  What say you, Bunky?

“And I sold my Gold for these??”  Bummer.

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

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