I can't see anything wrong with the gold chart at the moment. On a long term basis it looks to me like it's taking a posture not dissimilar to the post GFC rally which led to the top of the last bull run (see first chart below).
The very short term catalyst might be NK tensions but the underlying reason for the rally we are having is the direction of yields on 10 year US Treasury notes IMO. The bond market is out of sync with the Fed tightening policy and the Fed is being called out. We had a great rally in gold at the beginning of 2016 when 10 year yields fell below 2%. It looks like that same set up might be repeating (see the second chart below). Texas is a major contributor to the US economy and in the short term these floods are disruptive. What's more they will tax the Federal government's purse as money will need to be spent on emergency responses when they are supposed to be finding money to build a wall to keep out the exact people who do a lot of the dirty jobs that the average American is too fat or lazy to do. With the temporary closures of some oil refineries in Texas due to the floods the stocks of WTI at Cushing will start building putting pressure on the oil price, which is also deflationary and adds to downward pressure on rates. (ie works against the Fed rate tightening policy).
You are sounding overly negative considering where we are at. Maybe a case of being conditioned by the 4 years of short raids on gold. I think the bulls are going to start running again on gold over the next years and we are just seeing the beginning now. Esh
RMS Price at posting:
40.3¢ Sentiment: Hold Disclosure: Held
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