Gold weekly update 8-12.05

NFP caused big bearish day -50 dollars fall. In my opinion gold has started a consolidation to break 2070-2080 area. Big moves caused by the news are really stable, in most cases price comes back.


Macroeconomics
Recent readings have shown that the labour market is strengthening - again. The inflation readings rerinforce the speculation of further rate hikes.
The NFP showed that more jobs were created last month, but the CPI will tell us whether or not these jobs are creating more inflation. Two weeks ago, J.P. said that the strong labour market was a problem, but that it not caused the inflation.

This month the focus is on how the government is dealing with the debt. How they intend to solve the problem.
Banks are still failing one by one. They are no longer a safe place for the big money.


Top Down Analysis

On the weekly chart, I see a temporary rejection caused by the strong area. This area has held the price for 2 years. It will not be so easy to break, not before a few stop losses are cleared.

Very often the current crisis is compared to the great recession of 2008. Look at what happened to the gold price in 2008-2009. Economists say that this time the recession will be even bigger, probably because of the yield curve.
Past performance is no guarantee of future performance, but it is enough to make me uncomfortable selling gold in such an economic environment.



Benchmark

The current chart suggests consolidation.



COT Reports

No signs of weakness. The pros are still bullish, why should I change my bias?




Yields

Yields are still consolidating. My view is that they will break down sooner or later.




XAUUSD vs GDX

Triple bottoms are behind. I think GDX is preparing for a bullish breakout.


Gold vs Silver

Weak bearish manipulation in silver. Overall direction seems to be bullish.