Gold going parabolic, but I think it has one more leg next week. The orange line is the March 2022 Ukraine war peak. So basically I'm saying gold hits the top again.
It will be interesting. Gold broke above 2000 overnight. One thing to note.. these bailouts are inflationary, and if the fed doesn't follow through aggressively with rate hikes, the gold bubble may begin. A sustained breakout above previous all time highs will be a major signal.
hungry_hippo
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@fjack11, absolutely. They're bailing out banks by loaning more money. If they follow that up with a rate cut then inflation will explode again.
The issue is that the Fed tries to fix everything with more money. Well, you can't fight inflation with more money, lol. What's really sad is that the Fed, especially Powell, are too stupid to figure it out, so anything can happen Wed.
fjack11
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@hungry_hippo, The Fed has already failed. That's the reality.. Now, they are pretty much screwed. The can's been kicked too many times already. We still have pent up inflation from the other rounds of QE, when they couldn't get the inflation needle to move. It works until it doesn't.
hungry_hippo
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@fjack11, They screwed up with COVID QE, I said it when they did it. Then they doubled down on stupid by expanding their balance sheet.
Agreed. GLD/SPY continues to show outperformance over equities Gold likely continues its run even if equities show modest strength into April (SPX still rangebound)
BoomerMo
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So, you think that the Fed might cut or pause to create this last leg up for gold? Or is it some sort of buying climax? I expect Powell to go 25 basis points. In my estimation, he has no other choice. And higher rates are bad for gold (so I've heard, though I'm not sure I fully understand why).
BoomerMo
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Ok,I retract my statement. Investopedia says that there is little correlation between gold and interest rates (other than as interest rates go up, bonds get more attractive), and provided a few concrete examples of interest rates and gold going up in tandem. No idea why the YT guy I listen to basically reiterates higher rates=bad for gold in every video.
Expanded
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@BoomerMo, put the 10 year up alongside gold and you will see they are generally negatively correlated. Gold is like a currency that doesn't generate interest, so when interest rates go up it will generally go down as bonds become more attractive. However gold is also meant to do well in stagflation, where bonds may need to go up to respond to inflation, but there is also a slowdown in economic activity meaning bonds may be restricted in how far they can go. That's my take anyway. I reckon current market conditions are stagflation, and given the banks are having issues that hampers interest rate rises even further.
maddiett305
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oil? pls tks
hungry_hippo
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@maddiett305, no idea, oil trades on news more than chart patterns