alice

NFTRH; Macro Update… Gold Sector & Broad Markets

First off, let’s realize that gold vs. the US stock market remains a bearish underpinning for the gold stock sector.  GLD-SPY is declining from an ugly pattern, perhaps to a double bottom, perhaps not.

gld-spy

However, gold-commodities (and especially gold-oil) continues to rise despite nominal gold’s ignominy.  Recall that this was the earliest of the Macrocosm items we used in 2015 that preceded the 2016 upturn in the gold sector’s fundamentals and in the precious metals complex itself.  This is counter to the Trump trade, which is pegged on inflation and economic growth, which should favor commodities over counter-cyclical gold.

gld-dbc

Now for a little gold (GLD), silver (SLV) and HUI micromanagement.

I noted in a public post yesterday that I had nimbly shorted (and covered) gold and silver because contrary to the bearish analysis, I chose to hold some gold stocks looking for a bounce (that hasn’t).  I covered the gold short because it dropped to the SMA 50. Gold is still at a higher low to January and any near-term bullish potential would need that to remain intact.

gld

I covered the silver short because it dropped to the SMA 50 and a shelf of visual support at the top of the bullish pattern that formed in November-February.  Neither gold nor silver are notably oversold however, so that’s a caveat for the metals.

slv

HUI on the other hand is pretty well oversold and though the technicals are broken (below the weekly EMA 55, daily SMA 50 and the bear pattern neckline at 195) is at a support shelf in the 180 to 185 area “with a nod to the gap in the 170s”.

hui

While the macro fundamentals are not fully in line, we have inklings with the Trump Trades weakening as represented by the rising gold-commodities ratio.  We may need to get through the FOMC noise next week and if the broad markets continue to weaken, we just may have the makings of some early fundamental reparations for the gold sector.  Still too early to make any grand statements.

I just wanted to take an in-week snapshot for those interested.