The Big Gold Bear Thesis
For quite some time this year I have been trying to discern the reason behind the recent run in gold
Simply put, if there had been no fundamental change in the global macro scene to support this movement, then i am forced to take the recent run at face value and call it fluff. DXY was in desperate need of a cool down period and gold was grossly oversold. Thus, in lack of appropriate reasons for either to do anything other than go sideways until further economic data, the dollar took its breather and gold recovered. Moreover, logical bets that the Fed would chicken out on hiking rates or that Trump would start an economic firestorm seemed likely contributors to gold recovering as it did.
Here's the interesting part. When plugging the U.S Inauguration date into my chart, gold has had nothing but issue's ever since. These likely assumptions that Trump would cause havoc now seem like terrible bets, as he has moved at lightning speeds accomplishing tasks and publicly takes aim at massively boosting the U.S economy. Moreover, due to the ensuing market rally and severe unlikeliness that the Fed will back off their rate hike plan, these bets on gold now seem like complete garbage.
It is with this thesis that i assert gold will collapse back down to it's floor around 1127 at some point in the near future. I would expect a bounce at the 1173 level as there is much support there. Always love to hear suggestions and feedback, thanks guys.
Simply put, if there had been no fundamental change in the global macro scene to support this movement, then i am forced to take the recent run at face value and call it fluff. DXY was in desperate need of a cool down period and gold was grossly oversold. Thus, in lack of appropriate reasons for either to do anything other than go sideways until further economic data, the dollar took its breather and gold recovered. Moreover, logical bets that the Fed would chicken out on hiking rates or that Trump would start an economic firestorm seemed likely contributors to gold recovering as it did.
Here's the interesting part. When plugging the U.S Inauguration date into my chart, gold has had nothing but issue's ever since. These likely assumptions that Trump would cause havoc now seem like terrible bets, as he has moved at lightning speeds accomplishing tasks and publicly takes aim at massively boosting the U.S economy. Moreover, due to the ensuing market rally and severe unlikeliness that the Fed will back off their rate hike plan, these bets on gold now seem like complete garbage.
It is with this thesis that i assert gold will collapse back down to it's floor around 1127 at some point in the near future. I would expect a bounce at the 1173 level as there is much support there. Always love to hear suggestions and feedback, thanks guys.
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