Is the breakout in gold for real? Here’s what the charts say

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Is the breakout in gold for real? Here’s what the charts say

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for federal funds target rate. As economic data comes in stronger than expected or with evidence of sustained inflation, interest rates move higher as markets expect Fed rate cuts to be pushed further back. When our interest rates move higher, our dollar becomes more attractive to overseas investors and moves up as a result. Being that gold is priced in U.S. dollars and is very sensitive to moves in interest rates, gold is trading INVERSE to the U.S. dollar. As a corollary, U.S. equities are also very sensitive to moves in interest rates and due to our large caps having vast international exposure they also usually trade with an inverse relationship to the US dollar. So those macro relationships summed up; Stocks and gold are trading together Stocks and gold are trading inverse to the direction of interest rates and the U.S. dollar. So, if you want to continue to be bullish on equities you want U.S. bond yields and the U.S. dollar to move lower, which should push gold and the stock market higher. Gold is not an inflationary safe-haven vehicle here, it’s a confirming indicator for the stock market uptrend. Breaking down the gold chart Turning to the technicals of the gold market, I have some concerning analysis for stock market bulls, myself included. The gold futures chart is tracing an terminal Elliott Wave reversal pattern known as an ‘ending diagonal’. This occurs when a trending move is lacking sufficient velocity creating overlap of the corrections within the pattern. The Elliott model suggests there are usually 5-swings and it looks like we may be tracing our 5th and final swing. If the gold market does not break out above the highlighted $2356 level we may be setting up for a ********. If this happens, watch what happens to the U.S. dollar and U.S. bond yields. Do they trade higher? If so, watch the reaction in the stock market – does it move lower with the ******* breakout in gold? DISCLOSURES: Gordon owns Bitcoin and GBTC personally and in his research business TradingAnalysis.com. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.

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Gold COMEX (Apr'23),******* States,SPDR Gold Shares,SPDR S&P 500 ETF Trust,PowerShares DB US Dollar Index Bullish Fund,Exchange-traded funds,Personal finance,Markets,Breaking News: Markets,business news
#breakout #gold #real #Heres #charts

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