Pre-stateside elections a week ago we penned (the “BUT” notwithstanding) “…should Congressional power shift left, Gold ought shift up and get above The Box (1240-1280).Should Congressional power stay right, Gold ought shift down and fumble about in the upper 1180s. Either way, look for price to escape this recent drudgery of the 1230s…”
Which now, a week hence, it has.
Obviously as by now you well know, lawmaking power in the US shifted both left and right, resulting in various renaming of The Blue Wave to The Blue Ripple, The Blue Trickle, even The Blue Tinkle, save for the State of California which suffered The Blue Tsunami, voters here electing a so-called “super majority” forthwith enabling the legislature in Sacramento to raise taxes at will. How about that for the world’s eighth-largest economy?
As for Washington DC for which it’s said “gridlock is good”, post-election on Wednesday saw all eight of our BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P) trade materially higher over their respective Tuesday settles; but come Thursday through week’s end, most of the gains were hoovered away and then some, including those for Gold.
Gold had closed pre-election results this past Tuesday essentially “still in Kansas” at 1229. But then price joined the ensuing rally party and tried to breach the base of The Box (1240-1280) … yet couldn’t work any higher than 1238 before trending down into week’s end and settling yesterday (Friday) at 1210.
Thus in turning to Gold’s weekly bars and the notion that the government’s hands essentially are now tied for any substantive legislative changes until early in 2021, Gold has seemingly shrugged its shoulders, resigned to decline toward the ascending blue dots of parabolic Long trend. Gold’s expected weekly trading range at present is 26 points: but price itself is only 18 points above the 1192 level which would flip said trend to Short. Add in that the Federal Open Market Committee has all but formally made its next Fed Funds raise (effective 19 December) and that per this missive’s opening Gold Scoreboard price from here over the past two years has tended to trade lower, this recent Gold rally seems nearly over:
