Barry Dawes of Martin Place Securities takes a look at the gold and silver market, U.S. bonds, the stock market, and much more.
Wave 3 is unfolding nicely here after yet another long period of consolidation.
So much money has been pushed into the global monetary system that all the central banks can have no real impact anymore.
Just jawboning is left. Great for gold and all resources commodities. Energy will be key.
Exporters will have funImporters will have miseryGold has continued to move out from that descending wedge that made that strong seasonal bottom and is now heading up to challenge US$2000 and beyond.
Given the seasonal influences, it could be expected that August might be relatively quiet until the end of the North Hemisphere summer, but the power of gold and its relative strength might push it much higher anyway.
I keep expecting that US$100 intraday move, which I am sure is on its way to us.
This was a nice move overnight.
More ~US$25 moves.
And fitting nicely into this seasonal pattern.
Note that gold has much more volatility in 2023 than the averages.
Where will we end up on December 31, 2023?
This move looks like a Wave 3 in Wave 3.
Strong up day.
Could expect this to be stronger again this week.
The longer-term gives a classic technical break out.
Breaking to new highs here will send gold MUCH higher.
165 won't take long to achieve.
Gold stocks are now outperforming gold.
ASX gold stocks are completing Right Hand Shoulder and should slice through the 7700 neckline.
Very strong technical pattern here.
It won't be just gold.
Remember
No metals inventoryEnergy Cliff aheadNot enough undeveloped mineral depositsNot enough explorationA massive breakout is coming.
EarningsDividendsAcquisitionsThere is a big wedge here!
It would take US$ to about 125!
The bond market is continuing the fight between the bulls and the bears.
Technical evidence of no new highs is strongly suggestive of a continuation of the decline in yields.
10-year showed that false breakout, then a break of the uptrendNo new high was made (important!)Brinkmanship indeed!5-year showed sharp selloff.
30-year did not make a new high in yields.
There is a lot at stake here, with the possibility of sharply higher bond yield or sharply lower bond yields.
The case for either direction is strong.
The case for higher yields:
A more robust economyhigher inflationan increase in the supply of bondsThe case for lower yields:
Inflation subsidingUS$ assets are attractiveMassive short position still to be coveredEither way is good for gold.
Small stocks are breaking higher.
The big picture is looking good here.
Timing is everything.
Heed the markets, not the commentators.
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