Gold’s Bull Snorts and Boffs the Shorts

Assuming one is a Gold Bull, this past week was as good as it gets after having commenced a new parabolic Short trend:  instead of declining, Gold posted a weekly gain of +4.8% (+152 points) in settling yesterday (Friday) at 3358, an All-Time Weekly Closing High.  Sorry Shorts.  ‘Tis why we’ve quipped ad nauseam over these many years that “Shorting Gold is a bad idea”.

“But mmb, last week you showed Gold targeting support down into the 2900s…”

Squire, ‘twould be sheer folly not to at least be wary of Gold testing its 2973-2844 structural support zone as herein depicted a week ago.  Recall how relentlessly up was Gold back in the year 2011 as it cleared the price of 1900 for the first time?  “Nuthin but Gold!” was the clarion cry … price subsequently dropping -45.6% into the end of 2015.  (Indeed our writing back in 2010-2011 that “Gold has gotten ahead of itself” was ubiquitous understatement).

The good news however is that today Gold is not ahead of itself.  Per the above opening Scoreboard, Gold now at 3358 is priced at a -14% discount to its Dollar debasement valuation of 3891.

Regardless, weekly parabolic Short trends are “a regular course of doing business” with Gold.  To be sure, the Shorts were brazenly boffed this past week.  But ’tis far too early to rule out testing the aforementioned 2973-2844 support area as again shown via Gold’s weekly bars and parabolic trends from one year ago-to-date, despite the Shorts having initially been turned upside down even as a second red dot appears:

Again, as stated, Gold just recorded an All-Time Weekly Closing High (3358), still shy of its All-Time Daily Closing High (3442) and All-Time Intraday High (3510).  As regards the +4.8% weekly price gain, it ranks 34th-best through the 1,274 trading weeks century-to-date.  More immediately though, the requisite price in the ensuing week to flip the Short trend back to Long is 3502 — which actually is “in range” — given Gold’s expected weekly trading range is now 155 points, (that being bidirectional, ‘natch).

Fundamentally, two forces fused by the FinMedia figured for Gold’s favouring across this past week: 

• Moody’s “late to the party” StateSide credit downgrade toward the end of the prior week; and
• Trump’s “order then suggestion” for a 50% tariff on Euro goods come 01 June, in concert with a 25% “bite of the Apple”.

In turn, so succumbed the Dollar, Bond and S&P 500, whilst the balance of our BEGOS Markets basically got the bid.  And therein, Gold has crossed back above its smooth valuation as we next see:

‘Course, from the critical “Cash Management Dept.”, with respect to price having crossed above its BEGOS valuation, we shan’t wantonly ignore Gold’s aforeshown weekly parabolic Short trend.  As cited a week ago, our sense of the Moody’s downgrade was already well  “…’priced in’ to Gold as valued by Dollar debasement…”.  And as to the Tariff Sheriff, the President still abides by “The Art of the Deal” –[Random House, ’87] in going for the whole enchilada such as to at least savour a few satisfactory bites.

“So how does that affect Gold, mmb?”

Squire, it doesn’t preclude Gold from going straight up; but likely it shan’t given the fresh weekly parabolic Short trend is only two weeks thus far in duration.  Indeed since the year 2001, Gold has recorded one weekly Short trend of only two weeks, and rightly so:  just prior to COVID, Gold embarked on a weekly Short trend, only to be dramatically catapulted upward upon the announcement of the closure of the world, price then leaping +8.6% for the following week.  In other words, in a week’s time from today, we’d expect such Gold trend still to be Short.  But how lovely ‘twould be if we are wrong.

As to the Economic Barometer, ’tis on balance been going wrong since 19 February (67 trading days ago).  Of the 153 metrics having subsequently entered the Baro, only 60 of them (39%) have improved period-over-period:  “…we’re going the wrong way…” –[Steve Martin, ‘Planes, Trains and Automobiles’, Paramount, ’87].

So come 18 June, does the Federal Reserve’s Open Market Committee vote to nudge its Bank’s Funds Rate down a notch?  Let’s first see what the Bureau of Economic Analysis records for April’s Personal Consumption Expenditures next Friday; such “Fed-favoured” inflation gauge was flat for March.  Here’s the Baro:

But then there’s the “Big Beautiful Bill” … “That’ll be a thrill.”  –[Thelma Ritter, ‘Boeing Boeing’, Paramount, ’65].  (Stayed tuned to your local affiliate for breaking news).

Meanwhile, breaking back up since 15 May is our Gold, albeit within the broader context of the fresh weekly parabolic Short trend, (which again we ‘spect shan’t just yet meet its end).  Still, in turning to the dual-panel graphic of Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right, this past week’s group of “Baby Blues” rose as their foundational regression trend rotated toward positive; such becomes confirmed upon their eclipsing up through the 0% axis, (which you can follow daily at the website).  As for the Profile, the low 3300s appear initially supportive, followed by the dominant trading volume price of 3235:

Next we’ve the like graphic for Silver, her “Baby Blues” of trend consistency (below left) having just pierced above their 0% axis, whilst her volume support in the Profile (below right) ranges from the mid-33s down into the mid-32s.  As to the Gold/Silver ratio now 99.8x, priced to the evolving average (from 2001-to-date) of 69.0x would see Silver +45% higher at 48.64 (vs. her present 33.64 level).  ‘Course by now, you’ve already really “Got Silver!” right?  (Upon the 4 August 1964 release of the depicted Kinks hit, the price of Sister Silver was $1.29/oz.  Thus today, she’s higher by +2,508% … just in case you’re scoring at home):

So in a nugget:  Gold’s daily trend is up within a weekly trend that is down.  And during the ensuing holiday-shortened trading week come 11 metrics for the Econ Baro, included as noted “Fed-favoured” inflation data per the PCE.  Where shall Gold be, let alone the S&P?  To speak fundamentally, the former remains undervalued whilst the latter severely overvalued.  (So much for the ol’ “EMH” Efficient Market Hypothesis).  For today, less yield (S&P 1.321%) is better than more yield (T-Bill 4.230%).  “But Gold is yield-less!” they say.  And yet ‘from 2001, ’tis outperformed the S&P (including dividends) by nearly three times!  Gold wins.

Speaking of sports, tomorrow (Sunday) is race day here.  Hat-tip Steinmetz Diamonds:  how about a Gold, diamond-encrusted F1 car?

Whereas in racing ’tis best not to venture beyond the edge of adhesion, go for the Gold with all due reason!

Cheers!

…m…

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

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