091814 – Lower Yet

Model Portfolio: Short Signal (7/31)

CTM140918Technical Read: The gold mummy may be crushing someone but it isn’t us. The yellow metal broke to new cycle lows on Wednesday. Simple trend analysis is pointing down. Momentum readings are still negative. No real bottom in sight, yet.

Backdrop:

  • The only people surprised from the FOMC post-meeting comments were the ones expecting some kind of change. Here are some Fed-speak terms: “considerable time” (the Fed does not want to be rushed in raising rates) and “Significant underutilization of labor resources” (deflation is still hanging around). World markets are keying on the latter and that is bearish for gold.
  • The US dollar is still ticking up. Various geo-political events are supportive. It will be interesting to see how the Scottish succession vote goes. The euro is not quite up to taking the dollar’s place on the world stage.
  • US Government Bond research. I am offering a similar process to the gold comments for bonds. See the “Bond” tab for more info. The current read is bonds are expected to go lower (model portfolio sell signal 9/5). This is also negative for gold.

GH Garrett – Veteran Commodity Watcher for Conquer the Mummy.com