Gold Predictions: Look for a Sideways Week [Details]

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Mike Hammer | October 14, 2019 9:34am NYSE:GLD

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Last week ended with no big news, despite all the handwaving and handkerchief-wringing on the evening news. China, after sending over its top negotiator and talking for a few days, apparently decided not to sign any agreements without one more round of talks. This is in keeping with their usual tactics of drag-things-out for a while to see how strong the other side’s position really is. And of course, the weekend brought the news that the current discussion is about “Phase One” of an agreement, not a total-overall agreement. So as your friendly Gold Enthusiast has predicted many times, you should expect the US-China trade war to drag out for a while yet.


Looking to the money markets, the Fed didn’t lower interest rates on Friday, which was called for by some but seen as a very-outside possibility by most. The next really-possible time they’d lower rates would be the Fed Open Market Committee (FOMC) meeting, speech presentation at 2PM Eastern time Oct 30. So between now and then expect a ramping-up of harrumphing and opinion-ing by both the mass media and the financial markets.

One thing we can promise is there is very little danger of an upward movement in interest rate setting right now. Both the US and the world economies are seen as fragile right now, overburdened with debt and under burdened with growth.  Until that changes significantly things will be precarious, with investors trying oh-so-hard to ignore the growing mountains of debt and cheering any sign of economic growth, no matter how minuscule.

This situation always leads to more volatility in the equity (stock) markets, so expect a continuation of the up-down behavior we’ve seen lately. Investors desperately don’t want to lose money, so they’ll drive prices up at any sign of hope. Earnings season is just starting to kick in and it usually takes about a week before any new trend or direction emerges, if it does.  So it might be good short-term and day trading week, or a week to just sit back and watch…

 

Signed,

 

The Gold Enthusiast

DISCLAIMER: No specific securities were mentioned in this article. The author is long the gold sector via positions in NUGT, JNUG, a few junior miners, and covered calls on parts of the NUGT and JNUG positions. The author may initiate new covered call positions in NUGT and/or JNUG in the next 24 hours if market conditions warrant.


The SPDR Gold Shares (GLD) rose $0.32 (+0.23%) in premarket trading Monday. Year-to-date, GLD has gained 13.54%, versus a 11.28% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 33 ETFs in the Precious Metals ETFs category.


About the Author: Mike Hammer

Mike HammerFor 30-plus years, Mike Hammer has been an ardent follower, and often-times trader, of gold and silver. With his own money, he began trading in ‘86 and has seen the market at its highest highs and lowest lows, which includes the Black Monday Crash in ‘87, the Crash of ‘08, and the Flash Crash of 2010. Throughout all of this, he’s been on the great side of winning, and sometimes, the hard side of losing. For the past eight years, he’s mentored others about the fine art of trading stocks and ETFs at the Adam Mesh Trading Group.


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