Gold held below the SMA 50 (ref. NFTRH 761) and is dropping post-FOMC because, of course it is! It’s FOMC week and the Fed is talking tough and the inflation bugs are being run. Here let’s also reference the litany of macro indicators stating gold’s time is not yet. From #761:
And then there is this, Gold futures hinting to break down vs. SPX futures. Not good, and if it follows through to the regular session and closes the week like this, the correction not only grinds on as expected, but it could all but ensure the GDX sub-28 target, if not lower and send gold (current futures: 1940) to its SMA 200 at 1848.
Let us not take seriously any bellyaching, excuse making or conspiracy theorizing emanating from the orifice of the gold “community”. This was in the making all along as guided by the fundamentals that matter. Gold’s time will come after the Fed loses control, after risk ‘on’ markets top (nominally and relative to gold) and policymakers weaken to more dovish tones.
Speaking of stock markets, here is a little daily chart micromanagement of SPX. As Treasury yields kick up this morning, many markets’ futures are pulling back, including ES (SPX). The question for SPX now is ‘was it a bull trap break above the August ’22 high or not?’, and that question will be answered by whether or not SPX is able to hold that breakout area as support. If it holds, we’d be on the hysterical upside bear market rally (BMR) blow off theme. If it fails, while SPX would still be technically intact, I think it could be a significant bearish signal. A classic bull trap, perhaps, prior to a real correction if not the end of the BMR. Let’s call the key level 4300 (+/-) at the daily EMA 10.