Calm Down, it‘s a Shallow Gold Correction

Stocks keep pushing higher after a day of indecision yesterday, and the signals are largely still very constructively aligned behind another upswing. Yes, stocks are moving overall up as we approach the Fed statement and press conference. It‘s the precious metals that are on the defensive – a fact I had been writing about both on Monday and Tuesday, as well as tweeting out extensively before leaving for the dentists‘ – I wish that visit was both easier and took less time. I could prepare a longer analysis for you today instead.

Let‘s talk about today‘s moves and charts (all courtesy of www.stockcharts.com).

S&P 500 Outlook

The sectoral composition of the SPX upswing isn‘t exactly the strongest, but that‘s no obstacle to the unfolding move higher. A measured one, prone to brief and shallow intraday pullbacks whose upward bias can‘t be denied, though. That‘s the path of least resistance, and I also do like both small caps and emerging markets.

Gold Before the Opening Bell

The outlook for gold deteriorated during the second half of yesterday‘s trading as copper gave up some of its gains while long-dated Treasuries plunged. And overnight, gold felt obliged to fill the void and went $10 down.

Precious Metals in the Now

The situation is far from bleak – gold is nibbling at the bearish gap, but it‘s the miners that are providing more than a glimmer of hope. And as silver is losing altitude (short-term painful but of little consequence given how great a future awaits the white metal shortly), we‘re witnessing short-term rebalancing in the precious metals sector. Namely, since long-dated yields have barely moved thus far and copper almost erased its overnight losses already.

Summary

The S&P 500 keeps pushing for new all-time highs, and today‘s Fed isn‘t likely to change that materially. No, I‘m not looking for them making any noises about taking away the punch bowl.

Gold‘s downswing would likely prove short-lived, and miners would be pulling the PMs sector ahead again. Once the sector stabilizes in both time and price, silver would catch up again. Let‘s see how successful the Fed is today in selling the transitory inflation story and defending Treasuries, really.

Thank you for reading today‘s free analysis, which is available in full at my personal site. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.

Thank you,

Monica Kingsley
Stock Trading Signals
Gold Trading Signals
www.monicakingsley.co
[email protected]

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All essays, research, and information represent analyses and opinions of Monica Kingsley that are based on availability and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, and options are financial instruments not suitable for every investor.

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