If the Fed announces no more hikes and goes on pause, gold should begin its next leg higher.
The Hindenburg Omen is a technical indicator designed to signal the increased probability of a stock market crash. It compares the percentage of new 52-week highs to new 52-week lows. When triggered, stocks usually perform poorly but only crash about 25% of the time. The yellow circles below represent previous signals.
The recession probability model by Bloomberg economists Anna Wong and Eliza Winger reached 100% predicting a recession starting by the end of October. Recently Anna updated her outlook on FS Insider, saying it could begin as soon as July.
The annual inflation rate in Argentina hit a new all-time high in April of 108.8%. This is what happens when a currency loses credibility. From an investment perspective, I’m tempted to look for real estate opportunities in Buenos Aires, but I’m afraid things could worsen before they get better.
The market is considering the potential for another Fed rate hike on June 14th. The odds for a 0.25% hike have climbed to 53%. Typically, it must rise above 80% to be taken seriously. With Core PCE coming in at 4.7%, the Fed may consider more hikes. Another rate hike would be a colossal error, in my view.
Our Gold Cycle Indicator finished at 92, and we have entered minimum cycle bottoming.
The Gold Cycle Indicator entered minimum cycle bottoming, and this is historically a decent time to start adding to positions. I think prices could fall further and perhaps test the 200-day MA in June before bottoming.
Silver is oversold, and prices are due for a bounce. Overall, I think prices could slip back to support near the 200-day MA or rising trendline before bottoming in June.
Platinum closed progressively below the 50-day EMA and confirmed an intermediate-degree correction. Prices should find support around the 200-day MA in June.
I’m looking for a cycle low in gold miners between $28.00 and $30.00 sometime in June.
Gold is dropping into a cycle low, and how far prices fall likely depends on the odds of a June rate hike.
If the Fed announces no more hikes and goes on pause, gold should begin its next leg higher.
AG Thorson is a registered CMT and an expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more charts and regular updates, please visit here.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle that will begin to unravel in 2020.