Post by
cleareye on Feb 05, 2024 10:00am
Gold - 3 month compression triangle -
Gold has been in a three month long compression triangle which is still bullish.
Last night J Powell told '60 minutes' that he doesn't see Fed rates coming down till 2nd half of year. Of course he will say that. He wants interest rates to do their work of slowing down spendiing, including an incredible amount of US government spending.
This morning the USD rose to 1.044 driving the price of gold down in USD.
Also, this morning the price of gold dropped down and hit the bottom of that 3 month compression triangle. I expect that by tomorrow the craziness of the FED meeting and its aftermath will calm a little.
I expect gold to hold in this compression triangle, world news notwithstanding.
What the media and most investors are missing is that the Quantitative Tightenning that J Powell and the FED are attempting keeps shifting to Quantitative Easing whenever they bail out a failed bank. So, interest rates may hold steady and QT may revert to QE. That is very interesting. That may fall into wise policy. The interest rates will sort out the real estate market and QE will keep the economy from absolute disaster. The interest rates will mean house prices drop and the AIR B&B - VRBO crowd will sell their units and people will have places to live. Eh voila, - sounds like good policy to me.
cleareye.