Toward week’s end with much anticipated data on inflation, we’ve all three elements of the Metals Triumvirate above today’s Neutral Zones; none of the other BEGOS Markets are below same, and volatility is again quite light for this hour of the session. The S&P 500 continues to pound out record highs, the mighty Index now 22 days “textbought overbought”, notably the last four days we designate as “extreme”; at our Valuations and Rankings page, amongst the Top Ten largest cap-weighted constituents, just three have P/Es less than 30, and the non-cap-weighted average for those ten is 57.2x. Too, the market-cap of the Index is now $49.3T supported by a liquid U.S. money supply of “only” $21.0T. Today’s incoming Econ Baro metrics include June’s CPI, plus late in the session the month’s Treasury Deficit.
Mark
10 July 2024 – 08:10 Central Euro Time
We’ve at present both Copper and Oil below their respective Neutral Zones for today; none of the other BEGOS Markets are outside of same, and volatility is quite light. Looking at Market Rhythms for pure swing consistency: topping the list on a 10-test basis are the Euro’s 2hr MACD, Swiss Franc’s 1hr Moneyflow, Bond’s 8hr Moneyflow, Coppers’ 15mn MACD, and the Spoo’s 8hr MACD; on a 24-test basis ’tis both the Spoo’s 4hr Moneyflow and daily Parabolics. Gold, after having crossed above its smooth valuation line (see Market Values and as highlighted in the current edition of The Gold Update), has since slipped back below same; we’re thus getting price whipsawing in concert with having already written of Gold’s technicals and fundamentals being in conflict with one another. Meanwhile, the Econ Baro looks to May’s Wholesale Inventories.
09 July 2024 – 08:27 Central Euro Time
Both Silver and Copper are at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light. Gold took a bit of a hit yesterday, reminding us that key weekly technicals remain negatively in place (MACD and Parabolics); three weeks remain until the next FOMC Policy Statement, wherein — given the diving Econ Baro — an interest rate cut ought be warranted (assuming too that inflation has ceased per May’s data). At Market Values, the Spoo is (in real-time) +197 points above its smooth valuation line; the S&P 500 (futs-adj’d “live” P/E now 43.9x) begins a 21st consecutive session as “textbook overbought”. And as previously noted, Q2 Earnings Season officially is underway, as updated daily on that page.
08 July 2024 – 08:37 Central Euro Time
“Down” describes the state of the BEGOS Markets to start the week: save for the Swiss Franc (+0.1%), the seven other components are in the red with just the Bond and Spoo (albeit lower) at present inside today’s Neutral Zones; session volatility is pushing toward moderate. The Gold Update still confirms the key weekly measures of both MACD and Parabolics as negative, but that the yellow metal is getting a fundamental bid as therein itemized; too of note, Gold on Friday crossed above its smooth valuation line (see Market Values). The Econ Baro (which has been pounded into the ground) begins a fairly light week, today featuring May’s Consumer Credit late in the session; (inflation gauges shall be highlighted come Thursday and Friday). And today also begins Q2 Earnings Season.
The Gold Update: No. 764 – (06 July 2024) – “Gold Gives Thanks as the Economy Tanks”
The Gold Update by Mark Mead Baillie — 764th Edition — Monte-Carlo — 06 July 2024 (published each Saturday) — www.deMeadville.com
“Gold Gives Thanks as the Economy Tanks“
Through recent missives we’ve been near-term negative on Gold, indeed looking for a move down to test the 2247-2171 structural support zone. Such read remains in concert with price’s weekly MACD (moving average convergence divergence) still adversely positioned.
But gritty Gold refuses to fold, price settling yesterday (Friday) at 2400, all told! And when the yellow metal trumps that which is technical, we’re reminded that Gold’s ultimate value is fundamental, that it “sees” what is about to economically unfold! Thus a Federal Reserve rate cut to behold? Or does the Fed not (yet) “see” the economy getting rolled?
In other words: will the Fed be behind the descending curve as ’tis usually? FedSpeak of late, whilst not necessarily hawkish, has been nonetheless cautious toward an otherwise imminent rate cut come the Open Market Committee’s Statement on 31 July. And if previously you’ve therein read this phrase once, you’ve read it a bazillion times: “…the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks…”
Well folks, with respect to Gold’s reality being fundamental, here as a heads-up to the not-ahead Fed is the incoming data, its evolving outlook, and hence a bleak balance of risks via the Economic Barometer. And as you long-time readers know, the Baro is borne of some 50 incoming metrics per month across 26 years as a tried-and-true leading indicator, at which (‘twould so seem) the FedFolks don’t look. But as we herein mused a week ago: come 25 July, might the first read of Q2 annualized Gross Domestic Product actually be negative? Cue Murray Head’s ballad from back in ’75 
““Say It Ain’t So, Joe” ” and have your own look:
‘Course when rates plop, Gold oft gets a pop. Moreover, a bevy of Gold positives are coming to the fore. However, first let’s update the stance of Gold’s weekly bars from a year ago-to-date, wherein we see a second week of parabolic Short trend now complete. But as was the case with the prior two red-dotted Short trends, shall this one also be “short-lived”? Either way — as has now been the case for some 13 weeks — price basically is ebbing and flowing ’round our year’s forecast high of 2375:
True, we just mentioned there are Gold positives for “The Now”, inclusive of the opening Gold Scoreboard’s currency debasement valuation already up at 3712 (i.e. 55% higher than the present price of 2400). Here are a few more immediate Gold positives upon which to chew:
- Monetarily: inflation “magically” vanished in May; ’tis over, and thus the Fed ought cut; Gold Positive;
- Fundamentally: the StateSide economy is tanking; ’tis sick and thus the Fed must cut; again, Gold Positive;
- Globally: U.S. Vice-President Kamala Devi Harris likely assumes the role of President between now and 20 January (regardless of her party’s nominee and ensuing election), thus becoming Commander-in-Chief of the armed forces at a time when global hotspots are ever so fragile and expanding; be that President perfectly capable or otherwise unproven, the world will become more nervous; clearly Gold Positive.
- Technically: despite the fresh weekly Gold parabolic Short stance and still-negative MACD, just yesterday came confirmation of the following Gold Positive:
If you follow the website’s analytics, the above graphic is updated daily on both the Gold and Market Values pages. And the rule of thumb is: when price breaks above its smooth valuation line, still higher price levels (by rule rather than exception) are to be expected. Yet, within the context of proper cash management, we obviously now have conflicting signals. But at the end of the day — regardless what technicals shout — ’tis by fundamentals Gold will out. No, we shan’t now disregard a test of the oft-of-late mentioned 2247-2171 structural support zone; however should a new All-Time High instead be nigh in concert with the next weekly parabolic flip to Long, then ““I Want to Take You Higher” ”shall be Gold’s song –[Sly and the Family Stone, ’69]
Next we go to Gold’s two-panel display of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right. The last two daily bars are sufficiently upside robust such that upon the baby blue dots of trend consistency crossing above the 0% axis, their foundational 21-day slope shall have rotated from negative to positive. And in the Profile we’ve labeled those prices of notable volume-trading support:
Similar is Sister Silver’s drill. Her “Baby Blues” (below left) are well in sync with those for Gold. And her Profile (below right) shows a myriad of supports. As noted early in the graphic for Gold’s Weekly Bars, the Gold/Silver ratio is now 76.1x versus 79.4x a week ago, indicative of Silver garnering interest as she remains exceedingly cheap vis-à-vis Gold, (the average century-to-date ratio being 63.3x). Indeed whilst Gold today at 2400 is just -2.2% below its All-Time High (2454), Sister Silver now at 31.53 is -36.7% below her All-Time High (49.82). So do not forget her:
In closing for this week, guess what commences on Monday?
“Q2 Earnings Season, mmb.“
Exactly right, Squire. And surely you duly noted in the aforeshown Economic Barometer the “live” price/earnings ratio of the S&P 500 is an essentially valueless 43.5x. Who owns the S&P 500 at such an historically extreme level? Look again at the Econ Baro: to bring the P/E in line with any measure of past P/E means, do we really expect bottom lines to have doubled in Q2? Of course not! And yet, the S&P 500 — void of supportive earnings and comparatively little yield (1.316%) — continues to set record highs, reaching on Friday up to 5570.
‘Course the last thing the Fed wants to see (beyond the demise of the Almighty Dollar, which is the Fed’s mandate to maintain in equilibrium) is the inevitable crash of the Great American Savings Account (aka “The Stock Market”). But you S&P futures traders with long memories (and you know who you are out there) may recall from the “Conspiratorial Truth Dept.” the sole reason which keeps the market from crashing: the Fed (so it used to be said) has a trading account on the futures floor:
“Dat’s right, you keep hittin’ dem offers dere, Jay baby!”
But can the Fed then print its way out of a margin call when it all goes wrong? Folks: you can ultimately crash and burn along with the rest in this Investing Age of Stoopid … or instead give thanks for Gold!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
05 July 2024 – 08:32 Central Euro Time
The two-day BEGOS Market’s stint continues. At present we’ve the Euro, Swiss Franc, Gold and Copper above their respective Neutral Zones for the session; none of the other BEGOS components are below same, and volatility (given two days of movement) is moderate-to-robust, both the Swiss Franc and Copper having traced in excess of 100% of their EDTRs (see Market Ranges). Gold has regained firmness this week, albeit not enough to change the more near-term negative nature of the weekly technicals; (more on that in tomorrow’s 764th consecutive edition of The Gold Update). The Spoo is up such that the S&P 500 would (at this moment) open at an all-time high of 5540. And the Econ Baro concludes its down week with June’s Payrolls data.
04 July 2024 – 08:16 Central Euro Time
Given the StateSide holiday, the BEGOS Markets are in a two-day session (for Friday Settle) with the Swiss Franc at present above its Neutral Zone whilst Silver is below same; not surprisingly, volatility is light, the Spoo having thus far just traced 13% of its EDTR (see Market Ranges). Looking at Market Rhythms on a purely swing basis, our 10-test group for most consistency is currently the Euro’s 2hr MACD, Oil’s 60mn Parabolics, and Silver’s 15mn Moneyflow; for the 24-test group, we’ve two for the Spoo by its 4hr Moneyflow and daily Parabolics. With the S&P 500 at an all-time closing high (5537), its futs-adj’d “live” P/E is now 43.3x. Tomorrow is a full trading day for US equities, preceded for the “free-fall” Econ Baro by June’s Payrolls data.
03 July 2024 – 08:39 Central Euro Time
The Swiss Franc is at present below its Neutral Zone for today; above same are both Silver and Copper, and BEGOS Markets’ volatility is mostly light ahead of early closures for the Spoo and S&P 500. The latter settled above 5500 for the first time yesterday, albeit two recent days posted intra-day highs above that level: the “live” (futs-adj’d) P/E of the S&P is 43.0x with Q2 Earnings Season commencing next week; the S&P yields 1.324% versus the US 3mo T-bill’s annualized 5.228% Gold is basically staying buoyed above its key Market Profile support of 2338 even as near-term technicals suggest lower prices. The Econ Baro receives a bevy of metrics today: June’s ADP Employment data and ISM(Svc) Index, May’s Trade Deficit and Factory Orders, and because of tomorrow’s StateSide holiday, last week’s Jobless Claims too are squeezed into the mix.
02 July 2024 – 08:39 Central Euro Time
The Swiss Franc is at present the only BEGOS Market outside (below) its Neutral Zone for today; session volatility is quite light. The firmest correlation amongst the five primary BEGOS components is one which is positive between Gold and Oil, although by Market Trends, the former’s linreg is negative whilst the latter’s is positive; (the correlation benefits from both markets being well up from their lows of a week ago, however we remain more attuned to Gold slipping near-term rather than Oil breaking higher). Still, by Market Values, Gold is (in real-time) -43 points below its smooth valuation line whilst Oil is +5.13 points above same. Nothing is due today for the Econ Baro ahead of a bunching of incoming metrics tomorrow for the shortened equities session ahead of Thursday’s holiday.
01 July 2024 – 08:43 Central Euro Time
The year’s second half starts with both the Euro and Oil at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is moderate within the context that by Market Ranges, EDTRs have been narrowing. The Gold Update cites confirmation of the yellow metal’s weekly parabolic trend having flipped from Long-to-Short, the typical move lower from here (strictly by past average adversity) suggesting a meeting with the 2247-2171 structural support zone; Gold by Market Values is (in real-time) -42 points below its smooth valuation line; but by Market Magnets, price appears poised to eclipse up through its Magnet: thus we don’t sense an imminently stark move lower; still, near-term Gold technicals have a negative bent. For the Econ Baro today we’ve June’s ISM(Mfg) Index and May’s Construction Spending.
The Gold Update: No. 763 – (29 June 2024) – “Gold Looks to Support as Our Key Trend Goes Short”
The Gold Update by Mark Mead Baillie — 763rd Edition — Monte-Carlo — 29 June 2024 (published each Saturday) — www.deMeadville.com
“Gold Looks to Support as Our Key Trend Goes Short“
“And so we are halfway.” In this case ’tis not Fräulein Irma Bunt to James Bond (in the guise of Sir Hilary Bray) whilst walking upon the snowy flanks of Switzerland’s Schilthorn –[O.H.M.S.S, UA, ’69], but rather for our purposes the mid-point of 2024’s trading year. (Yes, we are aware that the precise mid-point is not until this Tuesday’s settle when with 126 trading days in the books there’ll remain 126 in the balance). Nonetheless, ’tis the end of June and thus time for our monthly view of it all.
And bang on time in stride with our negative near-term bent for Gold — whilst settling yesterday (Friday) at 2337 for a whopping weekly gain of +2 points — on Wednesday, Gold’s anticipated damage was done as price broke below 2320 such as to flip our key 16-week parabolic Long trend now to Short. (Expected as ’twas, ’twasn’t a beautiful thAng, even as we then “X’d” [@deMeadvillePro] notice of said flip). Regardless, as scored by Chicago back in ’69: ““Where do we go from here?” ”
‘Course, you regular readers already know the answer to our musical query. For waiting in the wings as herein depicted via recent missives is Gold’s 2247-2171 structural support zone. Below ’tis with the weekly bars from a year ago-to-date. And encircled therein is the rightmost red dot heralding the start of the new parabolic Short trend:
Still, as we oft and rightly quip, “Shorting Gold is a bad idea” given opening up-gaps et alia can cancel one’s trading account. Moreover as our friend in the above graphic muses, the prior two parabolic Short trends have lasted but three weeks each.
Yet with a proper eye toward cash management, similar to Gold’s negative weekly MACD crossover as confirmed two weeks ago, in now reviewing the past dozen weekly parabolic Short trends (which date back to 04 March 2019), the average downside price adversity is -90 points (the median being -71 points). So as was demonstrated for the current MACD case, an “in that average vacuum” move from here at 2337 similarly would place Gold smack on the upper boundary of the 2247-2171 zone. No, you cannot make this stuff up.
“But mmb, with the economy tanking and inflation kinda gone, price should skyrocket, right?“
Which, Squire, presumes our recent notion that the Federal Reserve must cut rates commencing 30 July, (albeit SanFranFedPrez Mary “Don’t!” Daly inferred this past Monday that it may still be too soon to move). But rate reductions do elicit more lending, the Fed-sourced proceeds of which resume debasement of the money supply, in turn adding to Gold’s valuation (presently by the opening Scoreboard’s 3711 vs. the current price of only 2337). ‘Course until such rate cut actually happens, Gold’s negative technicals can well will out as typically they do (which is why we do the math toward reasonably guesstimating how low is low). Still either way, as liquid markets go, nobody really knows.
However what we do know is that inflation has started to slow. Having yesterday received the “Fed-favoured” Bureau of Economic Analysis’ Personal Consumption Expenditures Price Index for May, we can complete that month’s inflation table which also incorporates the Bureau of Labor Statistics’ reads for both its Consumer and Producer Price Indices. And here’s what we see:
The right-hand column is key as ’tis the annualization of May’s inflation pace for all six measures. In other words for you WestPalmBeachers down there, this is the “What’s happenin’ now” way of looking at it. And the average rate of annualized inflation solely per May’s paces is only +0.2% as shown. Yes, the left-hand column’s 12-month inflation summations are all above the Fed’s precious +2.0% target; but given the (arguably magical) disappearance of inflation in May, clearly the trend must be down, right? (Please no email about “But mmb, we just went to the store and, and, and…” Believe us, we truly understand). We’re merely capsulizing that disseminated by the stated StateSide government bureaus.
Now in Squire’s having initially mentioned inflation, so too did his question include the “tanking” of the economy. So severe has been the Economic Barometer’s plunge — notably through this year’s second quarter — ‘twould not surprise us one wit that come 25 July the first read of Q2 annualized Gross Domestic Product shall be negative. Just a thought, but don’t forget ’twas barely positive for Q1 at +1.4%, the lowest GDP reading since climbing out of COVID during the Spring of 2022. Here’s the year-over-year graphic, the so-to-speak “earningsless” S&P 500 well up in the sillysphere:
Specific to the Econ Baro, ’twasn’t all bleak last week. The Chicago Purchasing Managers’ Index for June — whilst still in net contraction for 21 of the past 22 months — nonetheless improved to 47.4, its best reading since that for November of last year; (yet a reading below 50 still signifies manufacturing contraction). Too, Personal Income for May increased +0.5%, tying it for the second-best increase across the past 12 months. But is that inflationary, (nudge-nudge, hint-hint, wink-wink, elbow-elbow…)
Hardly inflationary has been Silver’s rise to the top of our BEGOS Market Standings year-to-date. Best of the bunch as she is, Sister Silver remains cheap! The Gold/Silver ratio is now 79.4x: but the century-to-date average is 68.3x; were Silver thus priced by that yardstick today (just in case you’re scoring at home), rather than being now at 29.44, she’d be +16% higher at 34.22.
Then in second spot lies (appropriate verb there) the S&P 500, its being purely herd driven on Investing Age of Stoopid delusion. Cue that recorded in 1929 by Memphis Minnie and Kansas Joe McCoy: ““When the Levee Breaks” ” Remember what also happened that year? When the “Look Ma! No Money!” crash hits, ’twill be pure herd fear, whilst Silver and Gold are held dear:
Now it being month-end, let’s go ’round the horn for all eight BEGOS Markets by their bars across the past 21 trading days and “Baby Blues”, the dots that depict the day-to-day consistency of each component’s respective grey trendline. If it all appears a fundamentally misvalued mess, you are correct. But: the markets [truly] are never wrong, (even as the S&P today trades at nearly double its earnings support and Gold at arguably half its currency debasement value). Sleeping well, are you? The S&P 500 market capitalization is now $47.7T buttressed by a liquid US money supply of only $21.0T. (Did we mention the “Look Ma! No Money!” crash?) Got Gold?
Similar to this time a week ago, we again find Gold on the left and Silver on the right both presently priced a bit below the mid-point of their 10-day Market Profiles. For Gold, 2338 clearly is the near-term support/resistance price, whereas same for Silver is pretty much a hodge-podge of the 29s:
And with June now in the books, ’tis time to assess Gold’s year-over-year percentage growth relative to that of its equities brethren. So from high-to-low we go with Pan American Silver (PAAS) +40%, Agnico Eagle Mines (AEM) +35%, the Global X Silver Miners exchange-traded fund (SIL) +23%, Gold itself +22%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +16%, Newmont (NEM) +2%, but Franco-Nevada (FNV) -13%. If you love rollercoasters, the metals’ equity leverage is for you!
Also as we tend to quip at month-end, ‘twouldn’t be so without Gold’s layered chart for the past 16 years by the monthly candles. Whilst we hope we’re well wrong about this year’s forecast high (2375), so far ’tis relatively holding there in the sky:
Thus with half the year gone, in the proverbial nutshell: Gold broadly looks great to go, but near-term technicals initially say no. Either way, we’ll see what shows. Indeed, how much Gold have you got stowed?
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
28 June 2024 – 08:36 Central Euro Time
Early on in the final trading day (by months) of the year’s first half, we’ve the Bond at present below today’s Neutral Zone; above same are Silver, Copper and Oil, and volatility is pushing toward moderate. Going ’round the Market Values horn for our five primary BEGOS Markets: in real-time we’ve the Bond as +1 point “high” above its smooth valuation line, the Euro -0.018 points “low”, Gold -41 points “low”, Oil +3.82 points “high” and the Spoo +211 points “high”. The S&P 500 is now 14 consecutive days “textbook overbought” and its “live” P/E is 42.7x. The Econ Baro looks to June’s Chi PMI and revision to UofM’s Sentiment Survey, plus May’s Personal Income/Spending and the “Fed-favoured” Core PCE.
27 June 2024 – 08:37 Central Euro Time
The Euro is at present above today’s Neutral Zone, whereas the balance of the BEGOS Markets are within same; volatility is notably light, with 10 metrics incoming for the Econ Baro over the next two sessions. As “X’d” (@deMeadvillePro) yesterday, Gold’s weekly parabolic trend has provisionally flipped from Long to Short, setting up a test for the 2247-2171 structural support zone; (more on that in next Saturday’s 763rd edition of The Gold Update). The Bond yesterday crossed beneath its Market Magnet, whilst today its MACD has provisionally crossed to negative: we thus anticipate some degree of further Bond selling overing the ensuing days, (albeit Friday’s PCE data is the wild card). Reports today for the Econ Baro include May’s Durable Orders and Pending Home Sales, plus the final revision to Q1’s GDP.
26 June 2024 – 08:41 Central Euro Time
At present we’ve the Bond, Euro, Swiss Franc, and Gold all below their respective Neutral Zones for today; above same is Oil, and volatility is again light. Preferential Market Rhythms displaying the best swing consistency through yesterday are (on a 10-test basis) the Euro’s 15mn EMA, and (on a 24-test basis) both the Spoo’s daily Parabolics and 4hr Moneyflow. For the S&P 500 itself (now 12 consecutive trading days as “textbook overbought”), the futs-adj’d “live” P/E is 42.8x and yield 1.323%; the StateSide 3mo annualized T-Bill yield is 5.223%. Silver’s cac volume is rolling from July into that for September. And the Econ Baro looks to May’s New Home Sales.
25 June 2024 – 08:49 Central Euro Time
Gold is the sole BEGOS Market at present outside (below) its Neutral Zone for today; session volatility is light. Going ’round the horn for all eight Market Trends: the Bond, Swiss Franc, Oil and Spoo are in positive linreg; negative is that for the Euro, Gold, Silver, and Copper. Whilst the S&P 500 yesterday was -0.3%, its MoneyFlow (regressed into S&P points) fell -1.9%, the biased constituent therein being NVDA: per the S&P Valuations and Rankings page, amongst the 10 largest cap-weighted constituents, that company’s “live” P/E settled yesterday at 68.4x, second-highest only to that of LLY at 133.0x. As to the S&P itself, yesterday concluded its 11th consecutive session as “textbook overbought”. The Econ Baro awaits June’s Consumer Confidence.
24 June 2024 – 08:14 Central Euro Time
A quiet start to the week as we move toward the mid-point of the trading year: at present, all eight BEGOS Markets are within today’s Neutral Zones, volatility being light. The Gold Update cites the yellow metal’s fundamental grip, albeit the near-term weekly technicals lack strength: penetration of 2320 this week would flip the key weekly parabolic trend from Long to Short. The “live” P/E of the S&P 500 is 41.4x; the Spoo (in real-time) by Market Values is +238 points above its smooth valuation line. Despite much analytical ado about a Bond Market demise, our Bond futs from late April’s lows are nearly +6%, the 21-day linreg firmly positive at Market Trends. Copper’s cac volume is rolling from July into that for September. Nothing is due today for the Econ Baro ahead of 12 incoming metrics for this week, culminating on Friday with the “Fed-favoured” PCE measure of inflaton.
The Gold Update: No. 762 – (22 June 2024) – “Gold Fundamentally Seeking Grip; Technically Still Facing Dip”
The Gold Update by Mark Mead Baillie — 762nd Edition — Monte-Carlo — 22 June 2024 (published each Saturday) — www.deMeadville.com
“Gold Fundamentally Seeking Grip; Technically Still Facing Dip“
To be sure, our recent missives have been near-term negative for Gold, at least technically so, an eye to the 2247-2171 zone apropos. Still, as you know, Gold these past two weeks has been fundamentally grappling to gain grip, albeit settling this past week yesterday (Friday) down a dip at 2335.
First, the Bad News: from the standpoint of Gold’s weekly “textbook” technicals (esoteric as they may be), the MACD (moving average convergence divergence) has furthered its negativity, and the Price Oscillator — whilst positive — is eroding, as too is the Moneyflow, its net inflow having completed a fifth consecutive week of weakening. Also as we’ll later see, Gold’s 16-week parabolic Long trend is all but at its end.
Second, the Good News: from the standpoint of Gold’s fundamentals — the most basic being currency debasement per the above Gold Scoreboard — we now sense the Federal Reserve is going to be forced to move with a rate cut per the Open Market Committee’s Policy Statement on 31 July.
Why? Because as stagflationary as a rate cut shall be, the Economic Barometer already has fallen well into jeopardy. Once both the Fed and FinMedia figure that out, “Cut!” shall be the clarion shout.
‘Course, we all know inflation didn’t just suddenly vanish in May, despite Labor’s sway. The once mighty Barron’s rightly referred this past week to inflation as “sticky”, with Richmond FedPrez Thomas “Hearken!” Barkin inferring that ’tis still lingering.
But: must the Fed now cut if only for optics to rescue the economy? For as we “X’d” (@deMeadvillePro) this past Thursday, our Econ Baro is in comprehensive, abject plunge, even as this Investing Age of Stoopid rolls right along:
Yet how relieved we are that the S&P 500 (red line above) no longer is led by the Econ Baro! Else stocks would have crashed months ago! For as you veteran fans who’ve been with us since the 1990s know, throughout the Baro’s 26 years of existence, it provably had led the S&P 500 through the first 22 of those years, right up to COVID in 2020. Then the Fed flooded the monetary system with $6.7T — an increase to the StateSide liquid “M2” money supply of +43.8% in just two years — and as we’ve previously mathematically demonstrated, the market capitalization of the S&P increased by same: which means (duly acknowledging the benefit of hindsight) that the Fed never really had to print anything! And thus today with the system bloated in equities’ liquidity, the stock market is unable to crash. Reprise: “We’re in the money, we’re in the money…” –[Dance of the Dollars, Dubin/Warren, Gold Diggers of 1933, Warner Bros.] Still graphically, the S&P seems a little bit stretched, what? Hip-hip:
Still as regards the stagflating economy, as we herein penned a week ago: “… ’twill be interesting to see just how negative for May the Conference Board’s Leading [i.e. “lagging”] Indicators shall be come next Friday…” followed by yesterday morning’s Prescient Commentary: “The Econ Baro, which has taken a terrific hit this week (indeed across the past two months), looks to May’s … Leading (i.e. “lagging”) Indicators, … [as] potentially quite negative given the dive in the Baro itself.“ That is because throughout the Econ Baro’s history, it regularly leads by weeks the Conference Board’s (with all due respect) misnomered “Leading Indicators” report. Worse, one wonders about the underlying consensii of economic “experts” properly doing their math: when we saw their May expectation for -0.3%, we anticipated a far dire result given the plummeting Baro … and so such came to pass at -0.5%.
Thus cue Captain Obvious: an economy in decline (understatement) upon comforted with a rate cut is a Gold Positive as it enhances the debasement of currency through the “creation of wealth” (i.e. loan-making). So as technically sensitive as the yellow metal may now be, fundamentally we decree: Buy Gold!
“But to buy ‘knowing’ — as you expect anyway — that the price may soon go lower, mmb?“
Squire, recall the late great Richard Russell: “There’s never a bad time to buy Gold.” ‘Tis the perfect place to put excess, unearmarked cash. After all, the Internet’s main sewer line (aka “social media”) goes on ad nauseum about everybody being so rich. Better still, timing the Gold market, (barring your being an in-and-out futures trader), is hardly a critical Gold-owning matter given that price (as historically eventuates) catches up to debasement value, again per the opening Gold Scoreboard.
Or to put it in easier perspective for you WestPalmBeachers down there, let’s quote Jack Lemmon in the role of Hogan from “Under the Yum Yum Tree” –[Columbia Pictures, ’63]:
“Well, it’s an economic necessity. The bank requested that I get rid of excess cash. It’s cluttering up their vaults.”
Yo, you rock, Jack baby: Go for the Gold! (‘Course, ’twasn’t Gold which Jack sought; but we’ll leave that to your viewing curiosity). The point is: as it all goes wrong economically, ’tis good to have a little (or a lotta) Gold.
As to Gold’s “now”, we turn to the weekly bars from one year ago-to-date. Note therein the three rightmost blue dots of the parabolic Long trend: price thrice saved by the dots! But now with just a wee 15 points separating price (2335) from its “flip-to-Short” level (2320), to maintain this uptrend that we love, Gold basically needs a straight-up week, else ’tis over. For as sang Martha Davis with The Motels back in ’82: “Take the ‘L‘ out of ‘Lover’ and it’s ‘over’…” :
And for those of you scoring at home, 15 points of “wiggle room” is very little to keep Gold’s Long drive alive: price’s expected weekly trading range is now a very volatile 83 points. Thus ’tis quite viable Gold soon visits the graphic’s outlined 2247-2171 structural support zone, should the parabolic (that 2320) this week break.
Now to our two-panel Gold display featuring on the left price’s daily bars from three months ago-to-date, the trend consistency therein denoted by the baby blue dots, and on the right the 10-day Market Profile of volume traded per price. As the “Baby Blues” rise toward their 0% axis, the trend becomes less negative (rotating to positive upon crossing the axis). However by the Profile, the 2030s appear as the last bastion of near-term support:
The like graphic for Silver is much the same, albeit at left the white metal’s “Baby Blues” were more beaten down than those of the yellow metal; and at right, Sister Silver’s Profile shows the mid-to-low 29s as her last support lines:
For the wrap, here is the stack:
The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3690
Gold’s All-Time Intra-Day High: 2454 (20 May 2024)
2024’s High: 2454 (20 May 2024)
Gold’s All-Time Closing High: 2430 (20 May 2024)
Trading Resistance: per the Profile 2344 / 2353 / 2375 / 2377
10-Session “volume-weighted” average price magnet: 2341: 2341
Gold Currently: 2335, (expected daily trading range [“EDTR”]: 37 points)
Trading Support: per the Profile 2333 / 2330 / 2323 / 2313
The Weekly Parabolic Price to flip Short: 2320
10-Session directional range: down to 2305 (from 2406) = -101 points or -4.2%
Structural Support: 2247-2171
The 2000’s Triple-Top: 2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The 300-Day Moving Average: 2067 and rising
2024’s Low: 1996 (14 February)
The Gateway to 2000: 1900+
The Final Frontier: 1800-1900
The Northern Front: 1800-1750
On Maneuvers: 1750-1579
The Floor: 1579-1466
Le Sous-sol: Sub-1466
The Support Shelf: 1454-1434
Base Camp: 1377
The 1360s Double-Top: 1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland: The Whiny 1290s
The Box: 1280-1240
So as we glide into next week which culminates with the “Fed-favoured” Personal Consumption Expenditures Price Index, let’s give Jack the final word:
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
21 June 2024 – 08:10 Central Euro Time
Summer’s first full day begins as the week ends wherein we’ve the Euro as the sole BEGOS Market at present outside (above) today’s Neutral Zone; volatility is quite light. Gold has relinquished its positive correlation with the Spoo and is now better teamed with Oil, both exhibiting uptrends these last couple of weeks, albeit Gold’s weekly technicals continue to suggest lower levels near-term: more on that in tomorrow’s Gold Update (No. 762); regardless, both Gold and Silver have broken above their respective weekly highs of the prior week, (even as by Market Trends their linregs remain negative). The Econ Baro, which has taken a terrific hit this week (indeed across the past two months), looks to May’s Existing Home Sales and Leading (i.e. “lagging”) Indicators, the latter potentially quite negative given the dive in the Baro itself.
20 June 2024 – 08:34 Central Euro Time
The two-day session continues for the BEGOS Markets: now we’ve the Bond below today’s Neutral Zone, whilst above same are Gold, Silver and the Spoo; session volatility expectedly has upshifted to moderate. Given the rise in the Spoo from Tuesday, the S&P 500 is poised to open (at this writing) above 5500 for the first time; its futs-adj’d “live” P/E is 42.1x and the yield 1.337%; (three-month U.S. dough pays 5.235%). By Market Trends, four components are in positive linregs (the Bond, Swiss Franc, Oil and Spoo), the other four being negative (Euro, Gold, Silver and Copper). Included today for incoming Econ Baro metrics are June’s Philly Fed Index, May’s Housing Starts/Permits, and Q1’s Current Account Deficit.
19 June 2024 – 08:43 Central Euro Time
Given the StateSide holiday, we’ve a two-day GLOBEX session in progress: at present, all eight BEGOS Markets are within their respective Neutral Zones for the session, and volatility is very light. Looking at Market Rhythms for pure swing consistency, on a 10-test basis the leader is the Euro’s 1hr MACD, whilst on a 24-test basis ’tis the Bond’s 1hr Moneyflow. The primary BEGOS components with the best recent correlation is one that is positive between Gold and the Spoo; however, by Market Trends, Gold is in a 21-day linreg downtrend whereas the Spoo’s is up; regardless, both markets are directionally higher from their lows of eight sessions ago The one metric due today for the Econ Baro is June’s NAHB Housing Index..
18 June 2024 – 08:44 Central Euro Time
Following another record-high day for the S&P 500 (the “live” fut’s adj’d P/E now 42.1x; and by our MoneyFlow page, dough continues to pour into this vastly overvalued Index), we’ve Oil at present the sole BEGOS Market outside (below) its Neutral zone for today; session volatility is mostly light. At Market Values, the insatiable Spoo is (in real-time) +285 points above its smooth valuation line; the other four primary BEGOS components are not trading excessively far from their respective valuation lines; of note therein, Oil yesterday moved above its valuation line, which by rule is a Long signal, whilst at Market Trends, Oil’s linreg looks poised to rotate from negative to positive. For the Econ Baro we await May’s Retail Sales and IndProd/CapUtil, plus April’s Business Inventories.
17 June 2024 – 08:20 Central Euro Time
As the week commences we’ve all eight BEGOS Markets in the red; six of the eight (save for the Swiss Franc and Spoo) are at present below their respective Neutral Zones for today, and session volatility is mostly light, expect for Copper having thus far traced 64% of its EDTR (see Market Ranges). The Gold Update remains remindful of the yellow metal’s near-term negative stance, the weekly MACD having confirmed a downside crossover at the conclusion of last week, price potentially en route to a test of the 2247-2171 structural support zone, (notably should the 2311 low of two weeks ago go). Cac volume for the Spoo is now on September; by its 10-day Market Profile, the Spoo’s most dominantly-traded handles (basis Sep cac) have been 5502, 5492, 5430, 5365 and 5350. 14 metrics come due this week for the Econ Baro, beginning today with June’s NY State Empire Index.
The Gold Update: No. 761 – (15 June 2024) – “Gold Firms; Fed Squirms”
The Gold Update by Mark Mead Baillie — 761st Edition — Monte-Carlo — 15 June 2024 (published each Saturday) — www.deMeadville.com
“Gold Firms; Fed Squirms“
First to Gold, then the economic mold (its detritus, all told).
As herein anticipated a week ago: Gold’s weekly MACD (moving average convergence divergence) has now confirmed crossing to negative, despite price’s +1.6% up week in settling yesterday (Friday) at 2348. We shan’t rehash all the math behind like instances as detailed per the prior missive, other than to reiterate price probably produces a down run from ’round here toward the center of the 2247-2171 structural support zone as below shown, notably with no space left for another parabolic Long trend blue dot, (barring Gold leaping from this spot):
‘Course the above analysis is purely a nearer-term technical read which has historically led to lower price levels. From a broader-term fundamental perspective –certainly so given inflation having just abruptly stopped — the Federal Reserve absolutely must cut its Funds Rate come 31 July, right? A Gold positive, to be sure. And in turn that puts to bed our year-to-date musings for a Fed hike, right? “Curiouser and curiouser!” cried Alice.
Toward economic mold (including more on the sudden absence of inflation), initially we’ve these two sentences from The Federal Open Market Committee’s Policy Statement of 12 June 2024:
- First paragraph, opening sentence –> “Recent indicators suggest that economic activity has continued to expand at a solid pace.
- Second paragraph, closing sentence –> “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”
So is the Fed sensing an economic inflection point?
But wait, there’s more: hat-tip Dow Jones Newswires from the ever-ebullient Ayahn Kose (who is the World Bank’s Deputy Chief Economist as everyone knows) came his 13 June prose –> “U.S. growth is exceptional”.
Your having thus absorbed all that parroted wisdom from on high, here’s the Economic Barometer, borne of the math beneath it all. Indeed, “Go ask Alice…” –[Slick/Jefferson Airplane, ’67]:
And yes, also go ahead and quote one John Patrick McEnroe: “You canNOT be SERious!!” For 29 April-to-date is the worst plunge for such time frame in the Econ Baro’s 26-year history!
To see the Econ Baro so plunge, one ought think the Fed — as it did under Chairman Greenspan pre-“911” both on 03 January 2001 and 18 April 2001 — make an emergency rate cut straightaway. For after all, along with this economic erosion, inflation within the one mere month of May just comprehensively went away! “Don’t delay, cut today!” Yet for some unforeseen reason, the Fed doesn’t see the Econ Baro; neither do CNBS, Bloomy nor Foxy. But in staying the “no inflation” proclamation:
- At the retail level, the Consumer Price Index showed no inflation (0.0%) for May, the 12-month CPI summation now +3.1% (and “core” +3.5%) … courtesy of The Bureau of Labor Statistics;
- At the wholesale level, the Producer Price Index showed deflation (-0.2%) for May, the 12-month PPI summation now +1.9% (and “core” +1.8%) … courtesy of The Bureau of Labor Statistics.
However, recall a week ago also courtesy of The Bureau of Labor Statistics: May’s unexpected upside explosion in Payrolls’ creation was accompanied by an inflationary doubling of the increased pace of Hourly earnings from +0.2% to +0.4%. So fortunately, there’s no inflation, (let alone stagflation), right?
“Well, it is an election year, mmb, and this is the Labor Dept…“
To be sure, ’tis said the Fed is typically “behind the curve”, indeed today in a state of squirm. For the Fed to opine (at best ‘twould seem) that “economic activity has continued to expand at a solid pace”, we’d say their analysis has (in Formula One lingo) “gone beyond the edge of adhesion and into the Armco!”
And as for the tumbling Econ Baro: ’twill be interesting to see just how negative for May the Conference Board’s Leading [i.e. “lagging”] Indicators shall be come next Friday (21 June). Economic mold, indeed.
Too, there’s earnings mold, our live price/earnings ratio for the S&P 500 settling the week at a historically unsupportable 41.4x. But until real fear hits, everything’s great, right? As is our wont to quip: marked-to-market, everybody’s a millionaire; marked-to-reality, nobody’s worth squat.
From such mold, back to firm Gold. Whilst price near-term may be a bit challenged, the broader picture remains most positive — perhaps technically too positive — but fundamentally there’s so much currency debasement ground to gain, (our opening Scoreboard valuation of 3690 versus Gold currently just 2348).
That noted, we go to Gold’s daily closes and 300-day moving average across the past 13 years, (the graphic still remindful of those tiresome 1200s-1400s during the prior decade). Therein, our green-line forecast high for this year (2375) has thus far held reasonably well, notwithstanding the brief, recent spike to 2454. And by this big picture, Gold’s sub-2000 days really do now appear permanently histoire, with an inevitable run to 3000+ in the balance “As time goes by…” –[Hupfeld ’31 … Wilson, Casablanca, ’42]:
Drilling down into the precious metals, here next we’ve their daily bars from three months ago-to-date with Gold on the left and Silver on the right. Their respective baby blue dots of trend consistency trace nearly identical patterns, suggesting that Sister Silver is aligned with Gold, adorned in her precious metal pinstripes rather than her industrial metal jacket when aligned with Cousin Copper; however, should you peek at the website’s Copper and/or Market Trends pages, you’ll find the red metal’s “Baby Blues” are not that dissimilar from those of the white and yellow metals. Thus for the Metals Triumvirate, all three are at present in linear regression downtrends, our precious two in this view:
As to the 10-day Market Profiles, both Gold (below left) and Silver (below right) have positioned themselves above last week’s lows … but given the near-term negative trends, we’ll simply have to see how it goes:
To close, yes the Econ Baro looks terrible, again in its worst plummeting streak we’ve ever recorded. However, perhaps there’s happier news on the horizon: of the 14 metrics scheduled to hit the Baro in the new week, 10 by consensus are expected to have improved period-over-period. ‘Course, to be factored in as well shall be prior period revisions with which to weigh one’s decisions.
But when it comes to increasing one’s Gold buying program, as Bogey said, “Play it again, Sam!”
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
14 June 2024 – 08:37 Central Euro Time
Gold is at present the only BEGOS Market outside (above) its Neutral Zone for today; still, barring a significant up day, Gold shall compete its week with the weekly MACD having confirmed going negative: more in tomorrow’s 761st consecutive Saturday edition of The Gold Update. Session volatility is light; of note however is the Yen (not yet a BEGOS component) having traced 128% of its EDTR (see Market Ranges for those of the other components). Cac volume for the Spoo is beginning to move from June into September with a whopping +65 points of additional price premium: that in turn finds the Sepember cac (in real-time) +259 points above its smooth valuation line (see Market Values). The Econ Baro looks to more inflation information via May’s Ex/Im Prices; too arrives UofM’s Sentiment Survey for June.
13 June 2024 – 08:35 Central Euro Time
Following the somewhat “stubborn-to-cut-Fed” (let alone our year-to-date musings instead about a hike), the Dollar’s furthering a bit of a bid today: at present below their respective Neutral Zones for this session are the Swiss Franc, Gold and Silver; indeed across the board, all eight BEGOS Markets are underwater, and volatility is mostly light, save for Silver having already traced 5% of its EDTR (see Market Ranges). Yesterday’s S&P surge to a record high (5447) without supportive earnings puts the “live” futs-adj’d P/E at 41.2x. Currencies’ cac volumes are beginning their roll from June into September. And at the wholesale inflation level, today’s incoming metrics for the Econ Baro include May’s PPI.
12 June 2024 – 08:34 Central Euro Time
Oil is at present the sole BEGOS Market outside (above) its Neutral Zone for today; session volatility “ahead of the Fed” is very light. At Market Values, Oil is just a point or so below its smooth valuation line, the upside penetration of which by rule is a Long signal; and at Market Trends, whilst Oil’s linreg is negative, the “Baby Blues” of trend consistency are now into their third day of ascent; on a 10-test pure swing basis, Oil’s best Market Rhythm is the 1hr Price Oscillator; and for within swing profit-taking ’tis the 6hr MACD (as graphically detail on our Oil page). Late in the session we’ve both the FOMC’s Policy Statement, Powell presser and Treasury Budget for May, prior to which comes that month’s CPI.
11 June 2024 – 08:39 Central Euro Time
Gold, Silver and Oil are all at present below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility again is light. Leading our Market Rhythms for pure swing consistency on a 10-test basis are Silver’s 1hr Price Oscillator, the Spoo’s 8hr MACD, and Copper’s 30mn Price Oscillator; on a 24-test basis the leaders are the Spoo’s daily Parabolics, the Yen’s (not yet an official BEGOS Market) 30mn Moneyflow, and Silver’s 1hr MACD. The best correlation amongst the five primary BEGOS components continues to be positive between the Euro and Gold. The Econ Baro is again quiet today ahead of nine metrics due — including inflation measures at the retail, wholesale and ex/im levels — from Wednesday through Friday. The FOMC’s two-day meeting begins today with their Policy Statement and Powell presser due tomorrow.
10 June 2024 – 08:32 Central Euro Time
The back-loaded EconData week (plus the FOMC’s Policy Statement come Wednesday) at present finds the Bond, Euro and Swiss Franc below today’s Neutral Zones, whilst above same are both Silver and Copper; BEGOS Markets’ volatility is light. The Gold Update maintains its near-term negative price stance: of technical import thereto, Gold’s weekly MACD has now provisionally crossed to negative; (confirmation would arrive at week’s end); downside price follow-throughs of this study average some -90 points, which in this case would place Gold well-within its 2247-2171 structural support zone. The S&P 500 settled its week with the “live” P/E at 40.1x. And by Market Values (in real-time), the Spoo is +136 points above its smooth valuation line.
The Gold Update: No. 760 – (08 June 2024) – “Inflation’s Strain Remains Gold’s Bane”
The Gold Update by Mark Mead Baillie — 760th Edition — Monte-Carlo — 08 June 2024 (published each Saturday) — www.deMeadville.com
“Inflation’s Strain Remains Gold’s Bane“
We start with inflation. Year-to-date we’ve diligently documented that ’tis nowhere near the Federal Reserve’s sought 2% target. And not that you need be reminded, but with May inflation readings commencing next week, let’s briefly reprise April’s inflation summary as herein presented a week ago. The data speak for themselves:
Now a week hence, yesterday’s StateSide jobs report for May had “inflation” written all over it: per the Bureau of Labor Statistics, the pace of Hourly Earnings doubled from +0.2% in April to +0.4%; the net increase in Non-Farm Payrolls was the largest year-to-date and incorporates those higher wages; and yet (wait for it…) the rate of Unemployment nonetheless ratcheted higher from 3.9% to 4.0%! How does that happen? Cue the late great Bullet Bill King: “Holy Toledo!”
Query too, how does this happen? On Thursday, the Governing Council of the European Central Bank cut 25 basis points on each of its Deposit Facility, Main Refinancing Operations, and Marginal Lending Facility rates … even as the leader of their pack Mme. Christine “Risky” Lagarde stated that “domestic inflation remains high” despite increased confidence for a “disinflationary rhythm”, (which she shan’t find on our Market Rhythms page, but we digress…)
Still, the annualized pace of inflation on this side of the Pond increased from +2.4% in April to +2.6% in May. Regardless: the ECB cut, (following ten across-the-board rate hikes dating back to 27 July 2022).
The bottom line in our mind: the optics are the ECB cut rates not because ’twas the right thing to do, but rather because they’re expected to so do. Oooooh. And will that come back to bruise? Or shall the Fed dare follow suit? We think not (yet), but stayed tuned…
Still being bruised as anticipated is Gold: our near-term negative stance remains in force as it has been through the prior two missives. Per this week’s title “Inflation’s Strain Remains Gold’s Bane”, hardly can the Fed this coming Wednesday (12 June) release the rate reins. Moreover, that above table suggests — dare we say “obligatorily” — to tighten said reins. But then again, the Economic Barometer is getting comprehensively skewered. Near-term inflation may be restrictive for advancing Gold as it keeps any Fed rate cut on hold … but broader-term stagflation for Gold shall make its price bold! Cue Old Yeller: “Hey Jay? We need another Dollar mold!” To wit, the Econ Baro below:
For the week just past, the Econ Baro took in 15 metrics of which just five garnered period-over-period improvement. Indeed measuring the Baro from its most recent peak ’round the S&P 5000 level, ’tis the worst 30-trading-day drop since that ending nearly 12 years ago on 05 July 2012, following which the FedFunds rate effectively remained at 0% for better than three additional years. Does history repeat? Inflation back then was continuously sub-2%. Not now, given the current FedFunds target range of 5.25%-5.50% So cut the rate and really stagflate, inflation further not to abate! Got Gold?
Admittedly as noted, our Gold view near-term is negative: fundamentally so with the Fed still on hold; technically so per our weekly chart below. To be sure, the year-over-year dashed regression trendline remains positive. But the rightmost blue parabolic Long dot shall pop given price’s plop. Too, as a special addition to this week’s graphic, we’ve inserted Gold’s weekly MACD as it is now negatively crossing to the downside, price having settled Friday at 2311:
“And even if, like you say mmb, that ‘Shorting Gold is a bad idea’, these MACD signals usually work, right?“
Historically ’tis true Squire. From April 2018 through today there have been for Gold 12 negative weekly MACD crossovers, the average downside follow-through being -93 points. Strictly within that vacuum from here at 2311, that bodes for 2218 which is nearly the center of the depicted 2247-2171 structural support zone. Upon the parabolic flipping from Long to Short, the average fall from there across the past five years is similarly -90 points. No, we’d rather price not go there, but such lower excursions Gold on occasion does fare.
‘Course for the Gold bull, hope springs eternal; otherwise, hardly would we be penning these weekly pieces. So fragile now is the state of the economy, the state of the stock market (“ridiculously overvalued” per a mainstream FinMedia piece a week or so ago), and the state of the world in many respects. Therefore Gold is the place to be! Indeed specific to stocks, here’s our honest “live” P/E calculation for the S&P 500 on the trailing twelve month basis; (for you WestPalmBeachers down there, “live” means right now):
Not surprisingly however, upon querying AI for same, it replied: “The trailing twelve month Price-to-Earnings (P/E) ratio of the S&P 500 is currently 24.79.” More on such “Assembled Inaccuracy” in our closing wrap. Indeed contextually, the “live” P/E is now +58% higher that ’twas at its inception a dozen years ago. And for those of you scoring at home, you know “means reversion” always occurs. (Have a nice day).
Not having a nice day yesterday were Gold and Silver. First to the yellow metal which traced the entirety of its two trading weeks in a single session on Friday. High-to-low by both points (-103) and percentage (-4.3%), ’twas Gold’s worst trading day since last 04 December. ‘Tis why in Gold’s 10-day Market Profile (below right) every price bar is highlighted in Gold as they all traded. And with Gold’s “Baby Blues” of trend consistency now falling beneath their 0% axis (below left), this means the 21-day linear regression trend has confirmed rotating from positive to negative:
Second to the white metal, Sister Silver suffering Friday her worst high-to-low day (-2.45 points, -7.7%) since 02 February 2021. Below on the left are Silver’s daily bars from three months ago-to-date: her plunging “Baby Blues” (barring an unexpected upside Fed cut rocket shot) surely in the new week shall see her trend, like that already for Gold, also rotate from positive to negative. And below on the right is her 10-day Market Profile, price itself at the very base of the stack:
With the Federal Open Market Committee’s Policy Statement and Powell Presser due Wednesday, we’ll wrap with this from the “Retraction/Correction/Blew It Dept.” given reference to the aforementioned brilliance of AI.
In last week’s missive we performed quite the song and dance over how $34T might be “visualized”. And via proper math we concluded that $34T in One Dollar bills laid end-to-end essentially equated to 5.5x the distance from Earth to Neptune. However, we fell afoul of the cardinal rule not to depend on stoopid source material. Indeed, rather than scrounge round through a wallet-full of Euros in search of a stray One Dollar bill for our measuring tape, we instead queried: “How many One Dollar Bills laid end-to-end make one mile?” And now after further review following email spew, Assembled Inaccuracy didn’t have a correct clue. (So what else is new…)
Start with the wrong number … End with the wrong number! For the correct answer and proper use of brain function, we leave it to you StateSiders to get out a buck, your ruler, and do the math from there. And you’ll still find the number unfathomably impossible.
‘Course, near-term negativity notwithstanding, the one number to grab is Gold!
Cheers!
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
07 June 2024 – 08:40 Central Euro Time
At present we’ve Copper as the only BEGOS Market outside (below) its Neutral Zone for today; session volatility is light with StateSide jobs data in the day’s balance. Curious to note yesterday’s ECB rate reduction despite the Governing Council’s outlook for increasing inflation. Going ’round the Market Trends page (21-day linreg basis and “Baby Blues” consistency): that for the Bond is up and reinforcing; the Euro up but weakening; the Swiss Franc up and reinforcing; Gold barely up and neutral; Silver up but weakening; both Copper and Oil down and worsening; and the Spoo up but weakening. The tumbling Econ Baro completes its busy week with May’s Payrolls data as noted, plus April’s Wholesale Inventories and (late in the session) Consumer Credit.
06 June 2024 – 08:35 Central Euro Time
The Swiss Franc, Gold and Silver all are at present above today’s Neutral Zones; none of the other BEGOS Markets are below same, and volatility is pushing toward moderate. Following yesterday’s record high, the “live” P/E of the S&P 500 is a futs-adj’d 40.5x and the yield 1.352%; three-month annualized U.S. T-Bill dough yields 5.240% without the risk of capital loss. An interesting Market Rhythm to mind is Gold’s 2h MACD: its last nine swings (both Long and Short) from 16 May-to-date have produced at least 12 points of signal follow-through ($1,200/cac); whilst the yellow metal both yesterday and today is having a recovery run, the weekly MACD is nearing a negative cross, in line with our recent writings being wary of near-term price retrenchment. Incoming metrics today for the Econ Baro include April’s Trade Deficit and the revision to Q1’s Productivity and Unit Labor Costs.
05 June 2024 – 08:01 Central Euro Time
The Bond and Swiss Franc are at present below their respective Neutral Zones for today; above same is Gold, and BEGOS Markets’ volatility is light. Gold’s weekly MACD is poised for a negative crossing, the last five of which over three years have led to lower prices of at least -30 points; The Gold Update cites specific lower levels of which to be aware following the “double-top” which formed across the past seven weeks; and price has been flirting with either side of its smooth valuation line (see Market Values). But that same metric, Oil (in real-time) shows as -7.83 points “low” and the Spoo as +123 points “high”, The Econ Baro looks to May’s ADP Employment data and the ISM(Svc) Index.
04 June 2024 – 08:26 Central Euro Time
BEGOS Markets’ volatility is lighter than ’round this time yesterday, all eight components having thus far traced less than 50% of their EDTRs (see Market Ranges). The Swiss Franc is at present above today’s Neutral Range, whilst below same is Oil. Yesterday was a sizable up day for the currencies, both the Euro and Swiss Franc moving to nearly two-month highs. At Market Trend’s, Silver’s “Baby Blues” of trend consistency confirmed dropping below their key +80% axis, suggestive of lower prices near-term: should yesterday’s low of 29.940 go, a test of 29.000 (10 May’s high) appears structurally reasonable; Silver’s Market Profile support is 30.650 to 30.500; note as well at on our page for Silver that its EDTR presently exceeds 1.000 (the actual reading being 1.155 points per day). April’s Factory Orders come due for the Econ Baro.
03 June 2024 – 08:36 Central Euro Time
The week begins with the Bond at present above its Neutral Zone for today; below same are Oil, Silver and Gold; volatility is moderate. The Gold Update still is slanted toward lower prices near-term following the yellow metal’s have created a notable “double-top” within the past seven weeks, such pattern generally leading to further downside. The best correlation amongst the five primary BEGOS Markets is positive between the Euro and Gold. Leading our Market Rhythms for pure swing consistency on a 10-test basis is again the Yen’s (not yet a formal BEGOS component) daily Parabolics, and on a 24-test basis ’tis Gold’s 1hr MACD; (as highlighted in The Gold Update, the yellow metal’s 12hr MACD is best for profit taking within swings). The Econ Baro starts a busy week with May’s ISM(Mfg) Index and April’s Construction Spending.
The Gold Update: No. 759 – (01 June 2024) – “Gold’s Double-Top Primes Price Plop”
The Gold Update by Mark Mead Baillie — 759th Edition — Monte-Carlo — 01 June 2024 (published each Saturday) — www.deMeadville.com
“Gold’s Double-Top Primes Price Plop“
Notwithstanding +23 points of fresh premium as COMEX Gold rolls from the June contract into that for August, there’s no mistaking price having formed a classic near-term double-top. Here ’tis:
The above chart tracks Gold by its 12-hour bars from nearly the beginning of this year-to-date. (The inset at lower right is by Gold’s daily candles specific to the August contract for the past two months). And stark thereon is the double-top (both being chronological All-Time Highs) achieved at 2449 on 12 April and again at 2454 on 20 May. The rationale for displaying the double-top per 12-hour bars is — that by price’s 12-hour MACD (moving average convergence divergence) — such study presently ranks as Gold’s best Market Rhythm for taking signals followed by profit. Green bars indicate price when the MACD is Long and red bars when Short, the latter as you know being a bad idea; (profitability results of this study are included on the website’s current Market Rhythms list).
The key point of course is that double-tops in major markets are prime for selling (be it by humans or algorithms), which — in spite of our being broad-based bullish on Gold — has been our near-term bearish analytical slant given the abrupt downtrend from that 20 May All-Time High at 2454. Indeed since then, Gold has dropped (basis the June contract) from 2454 to as low as 2321 (-133 points or -5.4% in just eight trading days). Now by the August contract having settled yesterday (Friday) at 2348, should 2309 go, the 21 March high of 2263 ought come into play … just in case you’re scoring at home.
More importantly, what’s coming into play in the words of Bloomy last Wednesday is “Revived Hike Chatter”. For some irrational reason, the FinWorld just seems to be figuring that out now. However, we’ve regularly herein been musing since the start of this year about the Federal Reserve ~~perhaps~~ having to raise rather than cut interest rates. The difference between “Us and Them” –[Pink Floyd, ’73] is simple: we do the math; the FinWorld parrot one another. And by the math, inflation remains on the move as below summarized in our April table:
Therein are the three major measures of StateSide inflation: the Consumer Price Index (CPI), Producer Price Index (PPI) and “Fed-favoured” Personal Consumption Expenditures Price Index (PCE), all listed with both their headline and attendant core readings. The left column is each category’s 12-month summation and the right column is April’s data annualized. Now look at the two averages, bearing in mind the Fed’s inflation target is 2%: for the 12-month summation ’tis 3.5%; but for April’s annualized paces ’tis 4.2%. Which for you WestPalmBeachers down there means: “We’re going the wrong way…”
So is the StateSide economy. Recall our penning a week ago: “…the Baro looks to be lower still in a week’s time as stagflation creeps ‘cross the nation…” Cue Tag Team from back in ’93: “Whoomp! (There It Is)””
‘Course, the FinMedia are all excited — assuming you neither eat nor drive — that the Fed-fawned-over Core PCE for April was only 0.2%, (i.e. the annualized 2.4% in the aforeshown inflation table). Nevertheless: the economy by the Econ Baro is fading, whilst living costs are rising. Stagflation. To be sure: “revived hike chatter” may lend to near-term Gold negativity on the notion the Fed could actually raise rates; but the emboldened “S“-word firmly lends to broad-based Gold positivity given the need to print dough to keep everyone whole … especially should U.S. Secretary of the Treasury Janet “Old Yeller” Yellen yet again be yelling she’s short of funds to pay interest on the nation’s $34T in outstanding securities, (riskless though they are, right?).
“So mmb, how can we visualize $34T?“
Simply by math, Squire. One Dollar bills lined up end-to-end take $2,276 to cover one mile. So, to line up $34T would cover 14,938,488,576 miles. The annual average distance from Earth to Neptune is 2,703,959,960 miles. Thus the “dollar distance” of $34T is 5.5x that distance to “Big Blue”; ’tis a lot of dollars.
Now it being month-end, we’ve still more graphic richness to present. And if memory serves, never have we seen the BEGOS Markets’ Metals Triumvirate dominate the Standings year-to-date: atop the framed podium — and ever-deservingly so — is Sister Silver, followed by Copper and then Gold. ‘Tis such a beautiful thing that we’re actually tearing up a bit:
Whilst in vein (but never in vain) with our BEGOS Markets, drilling down into the past trading month (21 days) here are their bars with the ever popular “Baby Blues” that depict the day-to-day consistency of the grey trendlines. To wit, save (barely) for Oil, the Blues ’round the horn are in descent. And “when money is coming out of everything”, ’tis anticipative of the oxymoron “Dollar Strength”. That in turn hints at higher interest rates, albeit upon the Federal Open Market Committee’s Policy Statement a week Wednesday (12 June), their sitting-on-hands likely continues. Regardless, here’s the “What’s happenin’ now”:
Specific next to Gold’s weekly bars, the rightmost one benefits from the aforementioned +23 points of August contract premium, (which over these next two months shall whittle away at a rate of about -0.5 points per trading day). Either way, this year ago-to-date “continuous contract” graphic is indicative of Gold having had a modest up week (+13 points) when in fact it had a modest down week (-10 points). But at the end of the day, given Gold’s EDTR (expected daily trading range) is now 36 points, that difference at best is noise. Note therein the blue-dotted parabolic Long trend (now 13 weeks in duration) shall flip to Short above the remindful 2247-2171 structural support zone:
Staying with the year ago-to-date theme, our pro-metals’ equities readers are finally getting some desired vindication. In recent month-end missives wherein this like graphic appears, Gold oft has been ahead of its equites brethren. Yet now, ’tis getting out-performed by a few of the crew. From least-to-best by their percentage tracks we’ve: Franco-Nevada (FNV) -15% (but in a recent uptrend), Newmont (NEM) +3%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +14%, Gold itself +19%, the Global X Silver Miners exchange-traded fund (SIL) +29%, Agnico Eagle Mines (AEM) +34%, and Pan American Silver (PAAS) +44%. Suffer by leverage, but live well by same:
Meanwhile, similar to what we saw a week ago, by their respective 10-day Market Profiles price remains low in the stack for Gold (calibrated to the August contract) on the left and for Silver on the right:
And as ’tis our wont to say, ‘twouldn’t be month-end without our big picture view of Gold’s stratified structure by the month across these past 16 calendar years:
To wrap: with each passing week, more and more internet information (or “bilge” if you will) builds toward financial end-times, part and parcel of which would include our “Look Ma, no money!” S&P crash. ‘Course this being big election years coinciding both on this side of the Pond (five-year Parliamentary) and StateSide (four-year Presidential), the hype of “Well, it’s the election, you know…” already is quite rife. But even were it not, the following macro-prudential fact remains: the S&P 500 is priced at nearly double its earnings support, whilst Gold is priced at nearly half its Dollar debasement valuation. And as we’ve demonstrated ad nauseum throughout 16 years of these weekly missives, price inevitably reverts to valuation. Therefore, near-term price plop or not: hopefully your Gold is well-guarded when sought!
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
31 May 2024 – 08:16 Central Euro Time
The BEGOS Markets are fairly quiet ahead of “Fed-favoured” inflation data due for April: both the Euro and Swiss Franc are at present a bit below their Neutral Zones for today; otherwise the balance of the components are within same, and volatility is light. The Spoo’s “Baby Blues” (see Market Trends) confirmed closing yesterday below their key +80% axis: year-over-year there’ve been six prior such negative crossovers, price then averaging -96 points of downside within the ensuing 21 trading days (one month); and by Market Values (in real-time), the Spoo still is +81 points above its smooth valuation line; too, this past Wednesday, the Spoo crossed below its Market Magnet, also indicative of further near-term price fallout; there is some structural support for the Spoo in the 5154-5036 zone, (i.e. beginning some -90 points below present price). The Econ Baro looks to May’s Chi PMI, plus April’s Personal Income/Spending and Core PCE Prices.
30 May 2024 – 10:26 Central Euro Time
On the heels of yesterday’s declines across all eight BEGOS Markets, we’ve at present both the Bond and Swiss Franc above their respective Neutral Zones for today, whilst below same are Gold, Silver, Copper, Oil and the Spoo; session volatility is moderate. At Market Trends, save for Silver and Oil, the “Baby Blues” of trend consistency are falling for the balance of the bunch. Looking at Market Rhythms on a profit-taking (rather than pure swing) basis, the best study is the Spoo’s daily Price Oscillator: there have been 10 signals extending as far back as 20 December 2022 for which all 10 produced price follow-through of at least 44 points (i.e. $2,200/cac); the current signal has been Long since 08 May. Metrics for the Econ Baro today include April’s Pending Home Sales and the first revision to Q1 GDP.
29 May 2024 – 08:24 Central Euro Time
Gold picks up +23 points of fresh premium as cac volume moves from June into that for August; however, the yellow metal is lower today, at present below its Neutral Zone as is the Spoo; none of the other BEGOS Markets are above same, and volatility is light. Looking at Market Rhythms for pure swing consistency: on a 10-test basis our best three are the Yen’s (not yet an official BEGOS Market) daily Parabolics, Copper’s 5mn Moneyflow, and the Spoo’s daily Parabolics; on a 24-test basis, the top three are the Yen’s 4hr Moneyflow, Gold’s 2hr Parabolics, and Copper’s 1hr MACD. Our best correlation amongst the five primary BEGOS components is positive between Gold and Oil. No metrics are due today for the Econ Baro.
28 May 2024 – 08:37 Central Euro Time
The BEGOS Markets’ two-day session continues, all three elements of the Metals Triumvirate at present above today’s Neutral Zones, as are Oil, the Euro and Swiss Franc; within same are both the Bond and Spoo; volatility has expectedly widened, now mostly moderate-to-robust, Silver with the largest EDTR (see Market Ranges) tracing at 150%. The Spoo is (in real-time) +192 points above its smooth valuation line (see Market Values); by Market Profiles, the Spoo’s most commonly traded price of the past 10 sessions is 5333. The S&P’s MoneyFlow has been significantly skewed to the upside on further piling into NVDA; otherwise by the page’s quarterly measure, the trend had been in mild decline. The Econ Baro awaits May’s Consumer Confidence.
27 May 2024 – 08:35 Central Euro Time
The two-day session for the BEGOS Markets is underway, (for Tuesday settlement given the StateSide holiday). The precious metals are getting the bid, both Gold and Silver at present above today’s Neutral Zones; the other six BEGOS components are within same, and volatility expectedly is quite light: only Silver has thus far traced in excess of 50% (55%) of its EDTR (see Market Ranges). The Gold Update acknowledges the most recent All-Time High (2454) as being at best “marginal” and cites what have become “habitual” moves lower typically following such post-COVID highs. The S&P 500 settled Friday as 13 days “textbook overbought”: the futs-adj’d “live” P/E is 39.7x. The Econ Baro anticipates just nine incoming metrics as the week unfolds, including on Friday the “Fed-favoured” PCE for April.
The Gold Update: No. 758 – (25 May 2024) – “Gold’s Marginal High and Habitual Cry”
The Gold Update by Mark Mead Baillie — 758th Edition — Monte-Carlo — 25 May 2024 (published each Saturday) — www.deMeadville.com
“Gold’s Marginal High and Habitual Cry“
We start with this from the “Pat on the Back Dept.” Per the prior missive penned a week ago (“Another Gold All-Time High is Nigh”), ’twas therein stated that Gold (then 2420) was exhibiting sufficiently daily trading range such that one could reasonably expect a fresh All-Time High (above 2449) to occur as soon as last Monday … which is precisely what happened, the yellow metal trading up to 2454 … but that was it.
So let’s thus transit from that department to the “Pass the Hankie Dept.” as Gold’s new All-Time High was at best “marginal”. And All-Time Highs recorded by Gold since at least the COVID years-to-date have then — oft with promptness — seen price go through “habitual” selling. To wit: following Monday’s 2454 high, the yellow metal this past week hastily traded down -128 points to as low as 2326 before settling yesterday (Friday) at 2335. So yes, you may cry.
Yet we offer this broader-based solace. Century-to-date, Gold has amassed 5,887 trading days, of which All-Time Highs have been registered on 268 occasions. For those of you scoring at home, that means across these past 24 calendar years, Gold averages a fresh All-Time High every 22 trading days, which essentially is once per month, albeit that is far from linear: for the nearly nine-year stint from 07 September 2011 to 27 July 2020, nary an All-Time High was notched, price in that duration dropping as much as -46% down to 1045 on 03 December 2015.
‘Course more recently, not every incremental All-Time Gold High since the COVID outbreak in 2020 has then been swiftly sold off. And yet, an inevitably habitual pattern of selling certainly is made manifest by the following chronological table of just how far Gold — following a run of All-Time Highs — has then declined within one month:
And the low row in the above table reflects last Monday’s All-Time High at 2454. Note therein the decline with only four trading days having since passed, price already having come off by as much as -5.2%.
Now hardly are we bearish on Gold: but ‘twould not be untoward to see price glide lower still given Gold having just crossed below our Market Values “smooth valuation line” for the first time since 28 February. As you seasoned website followers know, eclipsing that line to the downside (be it for any of the five primary markets which comprise BEGOS, i.e. the Bond / Euro / Gold / Oil / S&P) regularly leads to further selling as we below show. Note this latest negative price crossover as encircled in red, (the lower panel oscillator being price less valuation):
Specific to the current crossover, ’twas confirmed as of Thursday’s close at 2331. Year-over-year, ’tis the ninth such downside crossover. For the prior eight, the average negative penetration within one month is -65 points, (the median being -56 points). Thus in that vacuum alone, we’d see Gold 2275-2266 over the near term. ‘Course, rarely is “average” reality: there is pricing congestion for Gold from 2364-2285 to at least initially limit any truly material downside from here (2335). Still, we’re again placing for perspective purposes the underlying structural support zone of 2247-2171 on Gold’s weekly bars graphic — the crybabies notwithstanding — from one year ago-to-date. (Note at lower-right an Investing Age of Stoopid intruder…):
“Yeah, it snuck right past me, mmb“
Well, Squire, they’ll do anything and everything to convince you to dump Gold for “GameFlop” (GME, p/e 950x). But true to ongoing form, such Investing Age of Stoopid continues to run its inevitably-ending course, the “live” price/earnings ratio of the S&P 500 (aka “Casino 500”) now 39.4x and yield 1.380% versus the U.S. annualized three-month rate of 5.245%. The S&P’s market-capitalization is now $46.3T supported by a liquid U.S. Money Supply (M2) of only $21.3T. ‘Course when you WestPalmBeachers are sufficiently shaken to sell along with the rest of the herd, your brokers shall all be good for the money, right? (Recall, too, the ten stock market crash catalysts itemized in Gold Update no. 712 from last 08 July: today, all ten remain firmly bona fide).
Speaking of crash catalysts, we’ve some good news as regards the StateSide economy. Incoming metrics this past week for the Economic Barometer were so sparse (just five inputs), that it suffered limited additional damage. Next week is again rather light as well with just nine metrics due, notably including the Fed-favoured inflation gauge of Personal Consumption Expenditures for April which is not expected to have slowed from March’s annualized pace of +3.6%. But net-net by consensus, the Baro looks to be lower still in a week’s time as stagflation creeps ‘cross the nation:
Hardly was Gold’s decline this past week at a crawl. The yellow metal’s net two-day drop (from Tuesday’s settle at 2425 to that for Thursday at 2331) was -94 points: that ranks ninth-worst by points for any two-day span century-to date; (the like -3.9% drop has been worse on many two-day occasions, the most extreme being -13.3% in mid-April 2013). Still, the week’s fallout was enough to drive price from nearly the top of its 10-day Market Profile toward the bottom per the below right hand panel. The left-hand panel of Gold’s daily bars from three months ago-to-date depicts the baby blue dots of trend consistency having just turned lower. Again as aforementioned, the 2364-2285 area is price-congestive, and thus for now, supportive:
As for Silver, her two-day (Tue-Thu) drop was -5.8%. But unlike Gold, hardly did she hoover her whole Market Profile, basically finishing in the center of that two-week stack (below right). Too, her “Baby Blues” have (yet) to lurch lower per the three-month stint (below left). Indeed ’tis heartening to see Silver Silver getting some degree of respect lately. Further, she remains quite cheap relative to Gold, even as the Gold/Silver ratio (as noted a week ago) has moved sub-80x. Today ’tis 76.5x … however the century-to-date average is 68.3x. So priced at that average with Gold at 2335 today, Silver would be +12% higher than her current 30.54 level at 34.21:
Our takeaway is: ‘twould be folly not to anticipate lower Gold prices near-term. In addition to price having just crossed beneath the aforeshown smooth valuation line, we’ve the following technical negatives: Gold’s daily Parabolics flipped from Long to Short effective yesterday’s open as did the MACD (moving average convergence divergence); the daily Price Oscillator is dwindling and the Moneyflow is nearing a cross from inflow to outflow.
Still, with prudent cash management always paramount — and acknowledging that “shorting Gold is a bad idea” — let’s wrap with the stack:
The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3769
Gold’s All-Time Intra-Day High: 2454 (20 May 2024)
2024’s High: 2454 (20 May 2024)
Gold’s All-Time Closing High: 2430 (20 May 2024)
10-Session “volume-weighted” average price magnet: 2385
Trading Resistance: various per the Profile from here at 2335 up to 2440
Gold Currently: 2335, (expected daily trading range [“EDTR”]: 38 points)
10-Session directional range: down to 2326 (from 2454) = -128 points or -5.2%
Trading Support: none per the Profile
The Weekly Parabolic Price to flip Short: 2263
Structural Support: 2247-2171
The 2000’s Triple-Top: 2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The 300-Day Moving Average: 2046 and rising
2024’s Low: 1996 (14 February)
The Gateway to 2000: 1900+
The Final Frontier: 1800-1900
The Northern Front: 1800-1750
On Maneuvers: 1750-1579
The Floor: 1579-1466
Le Sous-sol: Sub-1466
The Support Shelf: 1454-1434
Base Camp: 1377
The 1360s Double-Top: 1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland: The Whiny 1290s
The Box: 1280-1240
‘Course the bottom line is, regardless of its marginal high but then habitual cry, don’t miss out when Gold goes to the sky!
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
24 May 2024 – 08:28 Central Euro Time
The precious metals are getting a grip, both Gold and Silver at present above their respective Neutral Zones for today; the other six BEGOS Markets are within same, and session volatility is quite light ahead of the StateSide long weekend. In recent years, Gold after recording All-Time Highs has habitually, indeed materially, pulled back somewhat swiftly: more on that in tomorrow’s 758th consecutive Saturday edition of The Gold Update; too, the yellow metal finally has returned to its smooth valuation line (see Market Values) for the first time since 28 February. At Market Trends, the Spoo’s “Baby Blues” of trend consistency have (in real-time) kinked lower (but not so much as to yet penetrate their key +80% axis); still the S&P itself technically remains “textbook overbought” and is overwhelming expensive given its cap-weighted lack of earnings support. The Econ Baro concludes its quiet week with metrics including April’s Durable Orders.
23 May 2024 – 08:34 Central Euro Time
Following what we’d now classify as Gold’s “marginal” All-Time High on Monday (at 2454), the yellow metal has since been in sell mode (at present 2364), and along with Silver (30.545) is below today’s Neutral Zone; the Spoo is above same, and BEGOS Markets’ volatility is light-to-moderate. Such selling has dutifully brought down the Market Value excess we’ve had for Gold for nearly three full months: price (in real-time) is now +20 points above its smooth valuation line; a month ago the deviation was +200 points. “Over-valued” too by such metric is the Spoo (+230 points) whilst “under-valued” we’ve Oil -5.78 points. Specific to our S&P MoneyFlow page, the three-month differential of Flow relative to the Index (per that page’s lower-right panel) has developed a detectably negative bent to it. The Econ Baro’s incoming metrics today include April’s New Home Sales.
22 May 2024 – 08:24 Central Euro Time
At present we’ve both the Bond and Copper below today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is mostly light. Silver has quieted a bit relative to its ranginess into this week: indeed by Market Ranges, the white metal’s EDTR is now 0.99 points, (whereas last September ’twas as low as 0.46 points). The S&P 500 is now 10 consecutive days “textbook overbought”: the “live” (fut’s-adj’d) P/E is 40.4x and the yield 1.369% versus an annualized 5.240% on risk-free U.S. 3-month dough. One wonders for how much longer the investing herd shall continue seeking unrealistic capital gains rather than equities reasonably priced by earnings support: mind our S&P 500 Valuation and Rankings page. The Econ Baro awaits April’s Existing Home Sales; and the Fed releases the 30 Apr-01May FOMC meeting minutes.
21 May 2024 – 08:39 Central Euro Time
All three elements of the Metals Triumvirate as well as Oil are at present below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is light-to-moderate, again save for Silver which today already has traced 153% of its EDTR; quietest is the Spoo with just a 10% tracing and nothing due for the Econ Baro. Following Gold’s new All-Time High yesterday (2454), price has backed off: still per Market Values, the yellow metal is (in real-time at 2419) +79 points above its smooth valuation line. Gold’s best Market Rhythm for pure swing consistency is (on a 10-test basis) its 12hr Parabolics and (on a 24-test basis) its 30mn Moneyflow; on a profit-taking basis, Gold’s daily Parabolics have reached follow-through of $2,700/cac in nine of the past 10 swings as listed on the Market Rhythms page; that, too, is the Rhythm featured on the Gold page.
20 May 2024 – 08:40 Central Euro Time
Gold has recorded another All-Time High this morning: The Gold Update mused it could happen as soon as today, and so it has, the intra-day high at present 2454, with price above its Neutral Zone as ’tis too for both Silver and the Euro; the other BEGOS Markets are within same. Session volatility is moderate, albeit specifically robust for Silver which already has traced 139% of its EDTR (see Market Ranges). Q1 Earnings Season has completed: for the S&P 500, 64% of reported constituents bettered the bottom lines over Q1 of a year ago, a somewhat sub-par performance given improvement (ex-COVID quarters) averages 69%; whilst the “live” P/E of the S&P was reduced from 46.1x, the current (futs-adj’d) 40.0x remains a dangerously high level. ‘Tis a very quiet week for the otherwise plunging Econ Baro: just five metrics are due, none until Wednesday.
The Gold Update: No. 757 – (18 May 2024) – “Another Gold All-Time High is Nigh”
The Gold Update by Mark Mead Baillie — 757th Edition — Monte-Carlo — 18 May 2024 (published each Saturday) — www.deMeadville.com
“Another Gold All-Time High is Nigh“
One week ago we herein opened with this query: “Is Gold’s near-term correction completed?” Given the yellow metal’s upside price action since then, we can now answer in the affirmative, (which for you WestPalmBeachers down there means “Yes”).
As for employing the word “Another” in this week’s title, ’twasn’t that long ago in milestone missive No. 700 (15 April 2023 with Gold then 2018) we wrote “Gold: The Next All-Time High is Nigh“, which of course obviously came to pass, indeed on 16 daily occasions since then. Now Gold is merely on go to do it again.
Our Mighty Metal settled at an All-Time Weekly Closing High yesterday (Friday) at 2420, just -29 points shy of the most recent All-Time Intra-Day High of 2449 this past 12 April. Further, given Gold’s “expected daily trading range” (per the website’s Market Ranges page) is 36 points, price is within such range of reasonably reaching above 2449 as soon as Monday, (just in case you’re scoring at home).
True, a week ago — at least technically — we were reserved about Gold’s then imminent direction, price having completed a perfect Golden Ratio retracement, from which at 2386 it swiftly sank in the new week to 2338. To wit as we penned in Wednesday’s Prescient Commentary: “…until the former clears … the Golden Ratio retracement … the recent near-term correction would technically remain in place…” But having then since risen higher still, there’s really not that much pricing congestion now between here (2420) and there (2449).
“And so the question becomes ‘How high is high?’, right mmb?“
That is a critical knowledge point there, Squire. To be sure, Gold has already surpassed our forecast high for this year upon achieving 2375 this past 09 April; (recall such prognosis having been made last 30 December in “Gold – We Conservatively Forecast 2375 for 2024’s High”).
Yet to Squire’s query as to “How high is high?” — at least fundamentally — we can see per the opening Gold Scoreboard that by Dollar debasement (even accounting for the annual increase in the supply of Gold itself), we’ve the yellow metal’s value at 3767, or +56% above today’s “lowly” price at 2420.
But given this ceaseless Investing Age of Stoopid wherein — save for central/sovereign banks — Gold is considered “passé”, determining the inevitable “when” for 3767 (and beyond) is subjective. The art of designing Fibonacci retracements per our prior missive may be one thing: but, the art of future Fibonacci extensions we leave to you “seers” out there.
Either way, ’tis a pleasant gaze at the past via this view of Gold’s weekly bars from one year ago-to-date, again the rightmost nub being an All-Time Weekly Closing High. Indeed through these first 20 trading weeks of 2024, this past one ranks fifth-best by both points (+53) and percentage (+2.2%) gains. As for the more skeptical amongst you — and price is arguably “too high” above the rising dashed regression trendline — we’ve again depicted the green-bounded 2247-2171 structural support zone, within which is the current “flip to Short” price of 2236. (But let’s not go there…)
And no, that Gold/Silver ratio at the foot of the above graphic is not a typo: 76.2x champions Silver’s stellar week wherein price rose +3.27 points (+11.5%), the white metal’s best weekly gain by both measures since that ending 07 August 2020. ‘Tis why we oft quip: “Don’t forget Sister Silver!”
Whilst speaking of metals, surely you saw Copper having reached its own All-Time High at $5.128/pound this past Wednesday, which may give further boost toward Gold’s next All-Time High. For be it lore, or substantively more, ’tis said the red metal leads the yellow metal. Here are their respective daily percentage tracks decade-to-date: just one of those things that makes you go “Hmmmm…”
But next we go to something guaranteed to make you go “Ugghh…”: the stagflating StateSide Economic Barometer. Its outright dump just in this past week is the worst for such stint since April a year ago. Moreover: for the nearly 26 calendar years that we’ve maintained the Econ Baro, such five-day fall ranks in the 99th percentile of worst plunges. Here’s the year-over year view:
‘Course, this can make Gold quite happy, for now the Federal Reserve must be forced to cut its Bank’s Funds rate … except that April’s just-reported inflation numbers belie that notion. First at the wholesale level (Producer Price Index) the 12-month summation is spot-on the Fed’s +2.0% target … except that April’s pace annualized was +6.0%. Second at the retail level (Consumer Price Index), it slowed by one percentage pip … except that the 12-month summation is well above target at +3.2% (and +3.7% core), with April alone annualized at +3.6%. And by now you well know the formula:
- Inflation + Shrinkage = Stagflation
“But mmb, is it really fair to say the economy is actually shrinking?“
As opposed to its growth merely slowing, Squire? We shan’t see the Bureau of Economic Analysis’ first read of Q2 Gross Domestic Product until late July. And already per their initial Q1 read, the annualized pace fell from +3.4% to just +1.6%. As well, the Conference Board’s “U.S. Leading Economic Index” (which we regularly quip is in fact “lagging” given the Econ Baro is always well ahead of it) has reported only one month of growth (for February of this year) since March of 2022(!) Is it any wonder the broad tilt of the above Baro is negative? No, ’tisn’t.
However, we sense what “is” is a fresh Gold high soon nigh. Let’s go to the two-panel graphic of Gold’s daily bars from three months ago-to-date on the left and same for Silver on the right. Therein per the baby blue dots of trend consistency, our thought is that present upside price momentum can pull the “Baby Blues” for both precious metals up above their respective +80% axes. Again, “Follow the Blues…”:
Also we’ve the two-panel graphic of the 10-day Market Profiles for Gold (below left) and Silver (below right). Whether marching or looking up toward higher highs, ’tis what our analysis implies:
Let’s wrap with our assessment of Q1 Earnings Season. As just ended “by the calendar”, for the S&P 500 — which also set a record high on Thursday at 5325 — we count 439 constituents having reported. Of those, 64% improved their bottom lines over Q1 of a year ago, (meaning that 36% did not so do). Excluding the four COVID quarters of 2020, the average year-over-year improvement runs ’round 69%: thus this past Earnings Season might be couched as rather sub-par. Yet upon its start back on 08 April, the S&P was 5204 and its “live” price/earnings ratio 46.1x. Today they are respectively 5303 and 39.9x: so some relative progress was made there in getting the p/e down a bit. Yet by any historical yardstick — especially in this positive interest rate environment — the p/e of 39.9x remains treacherously (understatement) high.
‘Course, ’tis made all the more complicated by this, (hat-tip Hedgeye’s hilarious Bob Rich):
Cheers!
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17 May 2024 – 08:16 Central Euro Time
‘Tis a fairly quiet start to Friday on the heels of a heavy week of incoming metrics for the Econ Baro, itself in a rather severe plunge. At present, just Copper is outside (above) today’s Neutral Zone, and BEGOS Markets’ volatility is mostly light, the red metal being the only component having thus far traced in excess of 50% (55%) of its EDTR (see Market Ranges). Going ’round the Market Values horn for the five primary BEGOS components (real-time readings): the Bond is nearly +3 points “high” above its smooth valuation line, the Euro +0.02 points “high”, Gold +56 points “high”, Oil -3.6 points “low”, and the Spoo +205 points “high”, the S&P itself having extended its “textbook overbought” stance through a seventh consecutive trading day. The Econ Baro completes it significantly down week with April’s Leading (i.e. “lagging”) Indicators. And today is the final day of Q1 Earnings Season, which for the S&P 500 has been somewhat sub-par by year-over-year growth.
16 May 2024 – 08:29 Central Euro Time
Following all-time highs yesterday for both Copper and Spoo (including the S&P 500 itself), we’ve at present all eight BEGOS Markets inside their respective Neutral Zones for today, ahead of another heavy round of incoming EconData; volatility is moderate. For the S&P, the combination of a new high and below-par Q1 Earnings Season growth has pushed the “live” P/E back above 40x, the futs-adj’d level now 40.5x; the Index is now at an extreme “textbook overbought” reading. As to the Euro, recall from earlier in the prior week our having noted per the Market Values page the currency’s having crossed above its smooth valuation line such that price by that leading indicative method could make a run toward the 1.10s: then ’twas in the 1.07s, having since traded up into the 1.09s. As for the Econ Baro, amongst today’s metrics are May’s Philly Fed Index, April’s Housing Starts/Permits, Ex/Im Prices, and IndProd/CapUtil.
15 May 2024 – 08:36 Central Euro Time
Copper is the sole BEGOS Market at present outside (above) today’s Neutral Zone; the red metal continues to be in play, having already traced 146% of its EDTR (see Market ranges); otherwise, session volatility for the other components is light with a bevy of EconData in the day’s balance. Looking at Market Trends we’ve only two with negative linregs: Gold and Oil; until the former clears at least 2385 (the Golden Ratio retracement cited in the current edition of The Gold Update), the recent near-term correction would technically remain in place; Gold at present is 2362 and its EDTR is 35 points. The Econ Baro’s busy day looks to May’s NY State Empire Index, Business Inventories and NAHB Housing Index, plus April’s reads on retail inflation (CPI) and Retail Sales.