I’m going to start by revisiting the University of Michigan consumer sentiment numbers. There’s a lot to digest in the first chart, but if you study it, I think you’ll see the powerful inverse correlation with gold.

Next week should be interesting. Monday and Tuesday will set the tone for the week. I’ll post multiple updates and keep members informed.

CONSUMER SENTIMENT

Consumer sentiment holds the keys to the next multi-year advance in gold. Precious metals peaked in 2011 when sentiment bottomed at 55. Sentiment soared to 75 by the end of 2011, and that propelled gold into a new bear market. Sentiment has been in an uptrend ever since reaching a recovery high of 101.4 in March of this year.

Take a look at sentiment between 2015-2016 (red shaded box). The trend along with the economy was rolling over. Gold sensed economic instability and rallied $300 in 6-months. By September 2016 sentiment was about to make a lower low (red arrow) but was saved in the eleventh hour by an unlikely Trump election. His tax cuts stimulated the economy and postponed golds bull market.

University of Michigan consumer sentiment ticked down slightly to 98.3 on Friday. It’s a harsh environment for gold when this indicator is around 100. Nevertheless, the uptrend appears to be stalling, and we should see sentiment rollover in 2019. Making a lower low (below 86) should coincide with a renewed uptrend in gold.

GOLD WEEKLY 

I think next week will provide some clarity to the intermediate-degree picture. A weekly close below $1200 would support a decline into December.

GOLD DAILY

It appears gold is breaking down in November for the 7th straight year. However, this scenario won’t be confirmed until prices break the October low ($1185). The average seasonal decline from the October peak to the December bottom has been 11%. Last year prices dropped just 5.4%, so I’ll need to see a couple more weeks of price action before selecting December targets. Timeframe wise, the December 19th Fed meeting seems like a logical choice.