Gold/Silver: The top three things I'm watching
New York (Sept 4) Deflation, reflation, stagflation, the market this week was taking its time deciding what "economic theme" will take charge to kick off September. Based on the big jobs miss (235,000 versus 723,000 expected), it was clear that stagflation is beginning to have its grips on the economy. The result of slower growth and "sticky" inflation will put renewed pressure on Fed to "kick the can" further down the road. The shortfall of 11 million jobs to bring the employment picture back to pre-pandemic levels is looking more like an unattainable goal with no actual clear resolution. For those of you that took our long seasonal recommendation in gold that began midway through August, we will recommend that you protect profits by trailing stops to try and take full advantage of this technical breakout.
In my article last week, I stated, "a disappointing job number further extends gold to our next major three-star pocket resistance from 1835-1840/oz." Now that we are here, where do we go? Next week, the top three things I am watching are the breakdown in the dollar to the 92 level and what an extension below this would mean for commodities. Following a critical level in small-cap stocks, i.e., Russell 2000, how the reflation trade will play out and the third you will have to register to find out. To get the top three things I'm watching delivered in your mailbox every week, please register here: "the top three things" before Sunday when I am sending it out.
Our Gold strategy
With expectations for the Fed to not announce its plan to taper asset purchases until December, we are restructuring our gold strategy to allow individuals to add on a retest of the 200-day moving average at 1820/oz with a target for higher levels into the year-end. If you would like to learn more about the strategies we are implementing or learn more about technical analysis, we created a guide to provide you with all the steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Precious Metals.
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