Gold’s Push Hits Stop; Fed Preps Rate Pop; S&P 500 Set to Flop

“But is this negative 12-hour MACD really that damaging to the price of Gold, mmb?“

Actually ’tisn’t, Squire. But it does give us an idea of how low Gold may go before price resumes northward. The past eight negative MACD crossings saw price fall by an “at most median” of -20 points or by an “at most average” of -30 points. Soley in that vacuum, with price today at 1964, such suggestion is we can thus see the 1940s-to-1930s near-term … which for the long (indeed eternal)-term Gold-holder is mere “noise”. The point is: be thee not discouraged by perhaps a week of price retrenchment as the Federal Reserve rears its rate hike head come Wednesday (26 July).

Yes the Federal Reserve’s Open Market Committee is preparing for another +0.25% FedFundsRate pop. As we’ve previously opined, we doubt such desire to raise shall be thwarted by the recent perception that inflation is slowing: recall that June’s CPI rate rose to +0.2% from +0.1% in May, whilst that for the PPI rose to +0.1% from -0.4% (i.e. deflation). Fairly acknowledged however, both measures via 12-month summations are declining. But: this is the Fed and ’tis in their head to go with Core Personal Consumption Expenditure Prices, which when last reported for May were running at nearly double the Fed’s desired annualized +2% rate … and which for June shan’t be reported until two days (28 July) following these next Fed Follies (26 July), lest we not also overlook the first peek a Q2 GDP on Thursday (27 July). Thus following those two post-Fed vital reports, we’ll have “nuthin’ but Fed” through the FinMedia thread right into the FOMC’s 20 September Policy Statement: you know, “Can the Fed reverse this market crash?” and so forth. (Keep reading).

And “conventionally”, both Gold and the Dollar are sensitive to Fed interest rate moves. Moreover, we’re already seeing it. As comprehensively detailed above, Gold appears poised to retrench just a bit. For respect to the Dollar, it tends to get a bid given an increased rate of interest. Which is why from the website’s “€uro” page, we see that currency (similar to Gold’s healthy run of late) having just now penetrated down through our “Market Magnet”, a leading event that perceives lower levels near-term, (i.e. the Dollar gaining back ground against the €uro). To wit the graphic of the €uro (thin line) across the past three months-to-date displaying the rightmost downside penetration of its Magnet (thick line). See how the Fed can making trading fun? (If you “know” in advance what’s to come):