Gold spins the wheels again
The level of resistance of $ 1,834 and some moderate buying of the US dollar caused problems for gold today, even as yields fell another 3 basis points today.
Technically, it’s an easy setup, but it’s not necessarily tough until last week’s low of $ 1,790.
In principle, Powell’s comments this week gave the market some consolation that there is no rush to raise interest rates. It started with two days of buying gold, but given the end of the month and the more cautious tone in the markets, we are cautious.
At some point, something must happen to capture the imagination of gold bulls, and it is hard to find right now. My best choice is for inflation to start falling. Today’s PCE report showed that it is flat and I expect it to fall in the coming months. It can even be said that inflation will be significantly underestimated in a year’s time, but it will be a long time off.