Since the macro often gets its pants in a bunch over FOMC, let’s see what these 3 economic metals have to say about the Fed’s nothing burger yesterday. Let’s use daily futures charts of gold and silver and daily, weekly and monthly charts for copper for perspective on the macro.
Side note as I criticize gold cheering and chart the ongoing corrections in gold and silver: I am not short one single thing in the precious metals space (not yet, anyway) and am long many things. But I am also very well balanced with the bubbling stock market providing the ballast on the other side.
Another still-intact reason I am not sweating the precious metals at this time…
Gold miners vs. Gold…
Silver miners vs. Silver…
Okay, let’s hear it girls!
Cue grizzly tweets like this showing up on Twitter (forwarded by a friend who knew I’d appreciate)…
The Fed's 2% inflation(massaged by all sorts of govt adjustments)led to actual inflation of 5%+ (as measured by WalMart,Target prices&anyone who pays for rent, healthcare or goes to college).So a target above 2% will lead to?…a desperate need to own gold https://t.co/QB1JVmLeb7
— fred hickey (@htsfhickey) December 10, 2019
Gold (counter-cyclical, w/ less inflationary utility) remains within the downtrend channel, which could be a big bull flag designed to kill off the cheer leading that remains. The 1420 +/- area is favored to contain the correction but a test of major support would be really healthy in sweeping the inflationist bugs out of there.
Silver (cross dresser between cyclical and counter-cyclical, w/ more inflationary utility) has already done great work toward its goal of 16.20 and roughly a 62% Fib retrace and test of the SMA 200.
Copper (cyclical, w/ much inflationary/reflation utility) has broken through the next resistance area at 2.75, which we had labeled as its objective.
And after that would be 2.85, where there is clear resistance. The major trend in copper is by the way, still down.
And so the good Doctor is not out of the woods and signaling all-clear on the macro until/unless 3.00 (where there is even heavier resistance) gets taken out and even then it needs to take out the 2017 high at 3.32 to make a big macro bullish statement. Long way to go Doc.
The bottom line is as we’ve been planning for and managing… party on Garth; party on Wayne! It’s the Q4 2019 macro party, but major trends have not yet changed. It’s a close out sale to the Christmas Eve massacre of a year ago. But as we enter 2020 longer-term signals will need to come into play or else a Q4 2019 (possibly into Q1 2020) event is all it will have been.
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