Model Gold Portfolio: Neutral, last signal 12/01 “exit long”
Technical Read: On Dec 15th gold fell back in the trading range (approx. 112-117.3, GLD basis). The 16th featured considerable intra-day volatility. Trading over the last couple of days and Dec 8th suggest that the 114 level may be the rallying point of a local bottom, however recent technical work does not confirm this yet. No signal.
- Catalyst 1 – The currency world was rocked today when the Central Bank of Russia hiked rates a stunning 650 basis points today. The increase came without warning and puts the county’s interest rate at 17%.The move is seen as an act of desperation to prop up the ruble. Russia’s currency is under considerable pressure during the plunge in crude (Western sanctions are a lessor factor). The US dollar fell in the aftermath and this is bullish for gold.
- Catalyst 2 – The S&P 500 broke south of near-term support (approx. 2040). Big cap equities have been under the cloud of a looming deflationary storm. Uncertainty out of Russia is not improving things either. Anything resembling panic selling is going to be positive for gold on a short-term basis (longer-term deflation is not a positive for many asset classes).
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GH Garrett – Veteran Commodity Watcher for ConquerTheMummy.com
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