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The Gold Update by Mark Mead Baillie --- 382nd Edition --- Olympic Valley --- 11 March 2017 (published each Saturday) --- www.deMeadville.com
"Gold Snowed as Buyers Go Cold"
Oh, were the price of Gold only to be rising with the local level of snow! Here in iconic Squaw Valley, wherein winter Olympians raced for the Gold back in 1960, this season's official snowfall total stands at 623" (16 metres), some 62% above the 384" (10 metres) accumulated to this date in 2016. Were Gold up by the like percentage from 1251 on 11 March 2016, 'twould today stand at 2027. But as the above panel shows, 10 weeks into 2017 now finds Gold 47 points (-3.7%) below where 'twas through the same stint in 2016, having settled out the week yesterday (Friday) at 1205, the buyers going cold and the once-spritely recent uptrend getting rolled.
Indeed, the ski patrol has been quite busy hauling its victims downhill across these last 21 trading days, for as the following graphic shows, save for the S&P 500 ("SPOO"), our BEGOS Markets components (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P) are all on the skids per their negatively-tilted grey trendlines. And except for the EuroCurrencies, the baby blue dots which denote the markets' 21-day linear regression trend consistencies are not looking very healthy:
For the precious metals, you'll recall our having eyed Gold 1220, else 1200, as support levels, price reaching yesterday as low as 1195 before snapping back up a dozen points following the "it could have been even more robust" StateSide payrolls data basically meeting its marks. Gold being Gold, 'twas one of those "sell the rumour buy the news" events. And as for Sister Silver, her week's low of 16.86 nearly tapped the 16.81 "fibonacci retracement level" we'd graphically pointed to a week ago. So is that it for the precious metals' downhill show? The above panels' declining "Baby Blues" make us think "no".
Specific to Gold, nearing 'twould appear is a flip of the weekly parabolic trend from Long to Short. For as we next go to Gold's weekly bars, the present price of 1205 is but a mere 20 points from penetrating the flip-to-Short level of 1185. Given Gold's "expected weekly trading range" is presently 36 points, such flip could well come this week, perhaps in the immediate snow-blowing aftermath of the Federal Open Market Committee's policy statement in raising the FedFunds rate to a 0.75%-1.00% target range come 11:00 Pacific this Wednesday, 15 March. Here are the bars and parabolics from a year ago-to-date:
'Course, it goes without saying the FOMC is stepping its uphill ski into the next racing gate, supported by reports this past week from ADP's strong private jobs survey, a working off of Wholesale Inventories, and some inflationary pressures indicated in Export/Import pricing. Here's the Economic Barometer:
And to top it all with an economic cherry, Bloomy's Consumer Comfort Index just made a decade high ... which rightly raises our cautionary antenna, especially as somewhat lost in all the happy EconData came a marked slowing in the pace of Consumer Credit, the January growth reading having just come in at $8.8 billion vs. consensus expectation for $17.0 billion on the heels of December's $14.8 billion. 'Tis a wee reminder that so many and so much -- from individuals to companies to governments -- are surviving (in some instances feeling like they're thriving) on a foundation of fluff, (the antonym for which is "Gold").
To wit, this past week the ever-watchful Organization for Economic Cooperation and Development's Catherine Mann cited such risks as currency volatility, trade barriers and excessive equity valuations as potentially too much for the global economy to withstand. Moreover, for the first time in three years, China's imports exceeded those of its exports. "What?" But there's some good news as Greece's Prime Minister Alexis "Tieless" Tsipras noted this past Monday that his nation's economy is set for "exceptionally high" growth rates ... output nonetheless declining. The world is changing ... or is it? (Think "Gold").
That said, again the precious metals have fallen off of a few cornices over the past two weeks, these 10-day Market Profiles for Gold on the left and Silver on the right appearing somewhat as mogul fields down through which price has been bumped and bruised. As you've come to know, the longer each horizontal bar, the greater the contact volume traded at that level; the red bars mark yesterday's respective settles, which presently one might say find prices having dangerously skied out-of-bounds:
Before we wrap it from here to again hit the slopes, a big thanks to our man Squire for assisting in sending up the graphics from San Francisco.
"You got it, mmb. Like we say, break a leg!"
Quite. And with the FOMC's rate hike getting the bulk of the FinMedia attention next week, don't overlook that we'll have 17 metrics working their way into the Econ Baro as well, so mind the website en route. In the meantime, we'll do our best to stay upright ... and Go for the Gold!