As expected, gold made nice three waves of correction back to projected 1250 support level, but there can be room for deeper and more complex correction down to around 61,8% Fib. retracement and 1245 level.
With much of the attention on Bitcoin becoming a potential replacement for gold (which we don’t agree with) silver has been almost forgotten. The grey precious metal has been trading inside a very narrow range with no clear directional bias for a very long time now.
Gold, silver, and mining stocks moved higher once again yesterday and the former even managed to move above the declining trend channel. Breakouts are bullish and thus the outlook for gold improved significantly… Or did it? Gold’s price in terms of the euro and gold’s relative performance to silver and mining stocks make replying to the above question quite easily.
The S&P 500 lost 5.7% last week in its worst week since January 2016. The market finished Friday’ssession making new lows; trading to 2586 before settling at 2597.75. The 200-day moving average came in at 2584.25 and kept things in check. The dollar has failed and is setting up for the next leg lower fundamentally and technically. If the dollar weakens, commodities priced in dollars strengthen and there are three on our list that we are watching most closely; gold, crude and silver. All three are set to capitalize on a more tumultuous geopolitical environment but each have many of their own reasons.
The most important event this week is the release of the Minutes from January’s European Central Bank meeting on Thursday. Remember, it was the release of the December minutes on Jan. 11 that sent the euro on a two-day run of 1.8%...