Gold & The Fed: What Lies Ahead?

In the fiat-obsessed West, the number 13 is considered unlucky.

Today is the 13th of June. Will it be unlucky or vibrant, for the gold bugs of the world? 

I’ll suggest that luck is helpful in business and markets, but luck best serves those who put in hard tactical work first. On that note,

Double-click to enlarge this short-term gold chart.  

Tomorrow’s Fed announcement carries significant tactical importance for investors. It’s not just the rate announcement itself that’s important, but the speech that follows, from Fed chief Jay.

Tomorrow’s speech will likely indicate the Fed’s take on inflation for the next few months… and then gold is likely to either dip to my somewhat juicy buy zone of $1900-$1800, or it will shoot out of the congestion zone and carry the core positions of investors up towards $2025.

For a look at the daily chart,

Double-click to enlarge. While the RSI oscillator is stuck just under the 50 zone and the lead Stochastics line is rolling over, Jay’s announcement can change that, and fast.

It’s possible that gold is making a key low here, but it’s more likely that there’s another month or two of summer doldrums, even if there’s a spurt higher in the short term.

For a look at the weekly chart,

Double-click to enlarge. Some analysts are calling for a third leg higher to happen very quickly.

That could happen if Jay shocks the market, but if not, where’s the major catalyst in play to make it happen?

Oil is weak, and while food commodities are rallying and grocery prices are sticky and continue to rise, the government inflation numbers don’t reflect this “boots on the ground” inflation endured by the average citizen.

The US government’s latest failed and debt-funded war (Ukraine) has become another citizen-ruining gulag, as I promised it would be. It’s no longer exciting enough for COMEX gambler funds to buy more gold futures and push the price higher.

India is also quiet. The current price sale isn’t big enough in relation to the previous rally and recycled gold is the main current theme there.

China? 

China’s Corona recovery is over. The government has announced some stimulus, but analysts worry that a planned property tax could create a house price meltdown!

In the big picture, the good news is that the meltdown would likely create substantial investor flows out of real estate… and into gold.

There is a real fear trade for gold in China in addition to the love trade, and property market mayhem could be the next trigger that brings it to life… but in the short-term it’s not positive for gold.

Silver? 

Double-click to enlarge. Of all the metals, silver has the best-looking chart in the short term. There’s an inverse H&S bottom pattern, and now a breakout with a classic pullback to the neckline.

A hawkish announcement from the Fed could ruin the potential upside fun, but the pattern is so aesthetic that silver bugs have good reason to stay positive. 

A daily focus on the big picture is critical for investors as inflation, recession, the 2021-2025 war cycle, a wildly overvalued stock market, debt ceiling horror, and empire transition dominate the investing landscape. I cover this big picture 5-6 times a week in my flagship Galactic Updates newsletter. At $199/year, investors feel the price is too low, but I’m offering a $179/15mths “special offer” that investors can use to get in on the winning action and meticulous analysis. Click this link to get the offer or send me an email and I’ll get you a payment link. Thanks!

For a look at the dollar, basis the DXY,

Double-click to enlarge.

Like gold, the dollar is drifting somewhat aimlessly. I urge gold bugs, silver bugs, and mining stock bugs to hold some dollars… not because the dollar is great, but because the goal of most metals market investors is to make fiat profits.  

The first order of business when investing is not to lose money, and the best way to do that is to hold some of it rather than investing it.

Having said that, a break under 100 for the DXY likely coincides with a break over $2080 for gold… and the odds of it happening are likely 99%.  

Investor patience is required, but it’s only a matter of time before the “United Fiat Freaks Government of America” makes its next major move of debt-oriented stupidity, and the dollar collapses under that 100 zone… sending gold towards my $2200-$2400 target price area.

The miners? For a look at a key GDX chart,

Double-click to enlarge. Traders and gamblers can buy now, with a stop under the $30 area low. They could also wait for the announcement from Fed chief Jay, but there’s a risk they miss the opportunity.

Conservative investors with solid core positions can take note of the Stochastics oscillator at the bottom of the GDX chart. The lead line has slipped under 50, and with India the COMEX commercial traders quiet, there’s no need to buy more now, but I’ll dare to suggest that it’s a very good idea to cheer that the price goes higher!

Thanks!

Cheers

St

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “Get Jacked With J!” report. I highlight key GDXJ stocks that could surge after Fed man Jay’s speech this week! Both core and trading position tactics are included in the report.

Stewart Thomson

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