MrRenev

Gold in a downtrend

Short
TVC:GOLD   CFDs on Gold (US$ / OZ)
Once again, inflation numbers beat expectations, but the increase is smaller than the previous increases.
Many food manufacturers are planning on increasing their prices in the following months, with the producer price index up 6.2% in April (versus 4.2% inflation ) and their profits volatilized.

The bull case for gold is here but it is not enough, it already went up a lot since April, when we got the March numbers that started going up.
Maybe this is a buy the rumor sell the news? Or with the increase in inflation slowing down in May all the mega-bears are getting nervous, and as the price corrects their breakeven prices are getting reached.




The FED had a pointless press conference on the 10 to BS investors that pay attention to the nonsense they say, and they have a meeting on the 15-16.
Gold bears had better pay attention on the 16, and be ready to close that short. It could also gold to drop further. Just pay attention.
Inflation reached a symbolic 5% and they might want to try and stop it from getting higher, keep it below the psychological 5%, well try, in the short term.

Large speculative positions, that simply follow the trend, have not dropped yet. Gold price extended slightly more than 2.618 and was bound for a correction.
A good catalyst could throw gold down in a straight line straight back in its channel, or it could very slowly trend down as it has done before.



Gold is still at a lower high on this 3rd impulse up since the bear market started August of last year. Meanwhile the S&P 500 is at all time high.
Money prefers to buy stocks than gold which is not very glamour and popular anymore. I see no gold rush, at least for the coming months to years.
Plus all institutions and economists have a huge bias and are overly positive about the future for political reasons.

It is even possible this rally is all a sucker rally and gold is early on in an uptrend. It won't be the first time we see such a strong rally "back to normal".
It's just so obvious, it went up for 4 years and not just any 4 years, while all the rich people were overly negative because of their bias, same thing with Brexit.
No one uses gold for speculative reasons (on the long term), "speculators" ( CME denomination) went long probably as a hedge for an economic collapse.
And now? The stock market is making high after high after the trade war sideways that lasted 2 years, and rich people are either mindlessly positive.
Or they just use the stock market to protect their money. It kept rallying during the 2020 shutdown.
The stock market going up and up and up when things are bad means gold use case is gone. It's not needed.




Long bear markets do not warn, except for crypto, it could all just be a small correction, or it could be the end of the goldbug copium with the price soon testing 1500. I'm just going to have to pay attention, since I don't really have an opinion maybe I'll close some hold some. If the price goes down it will probably do so with big rallies, do I actually want to hold large pullbacks? Maybe I could close all and on a big rally re-open. First let's get to 1825 and then we'll see.


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