In line with this morning’s payrolls report, which increased in job numbers, but showed easing in cost-push inflation (wage growth), gold is retaking some of its relational trends vs. cyclical and inflation sensitive markets. Also, bonds are bouncing hard, and that is not inflationary signaling. We’d want this to continue for the disinflationary view (that could lead to economic contraction) favored for investment in the gold mining sector.
Gold (GLD) vs. key items
GLD/SPY (broad US stocks) is firmly retaking its daily uptrend.
GLD/ACWX (world) is weaker but on a hard bounce. Global is favoring USD’s post-payrolls pullback. We want to see this hold above the SMA 200 and change the trend.
GLD/UDN (a gauge of gold vs. global currencies) is stable, with a bullish bias above the SMA 200 and attempting to retake the SMA 50.
GLD/DBC (commodities) is taking back the intermediate uptrend and starting to turn the SMA 200’s trend up.
GLD/USO (oil) is similar. These need to continue up in our favored plans.
GLD/CPER (copper) has bounced but the downtrend from July is intact. This needs to change to really kick in comprehensive counter-cyclical signals.
Finally, the “inflation expectations” gauge RINF is pulling back hard as Treasury bonds bounce hard. These are positive for gold and for an anti-inflationary view. Inflation signals need to keep breaking down to confirm.
While we are at it, let’s view GLD/RINF and note that it would highly desirable as a gold stock bull for this uptrend to keep going and see gold finally assert amid a fading inflation hysteria.
