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A Gold Divergence; Post Vaccine-War Impact Incoming

user profile picture davefairtex Jan 29, 2023
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We had four economic reports this week:

  1. Personal Income (PI): +0.22% month over month (m/m) [+0.26% month over m/m prior]; Slowing, negative.
  2. Durable goods, New Orders (DGORDER): +5.33%  m/m, Shipments +0.50% m/m. Positive.
  3. Median New Home Sales Prices (MSPNHSUS): -16.9k m/m, New Home Supply: -0.2 [to 9 months]. Negative (for housing).
  4. GDP: +1.56% quarter over quarter (q/q), not adjusted for inflation. Negative.

The dollar (DX) inched lower this week, losing 0.06 [-0.06%] to 101.72. This was was virtually no change, ahead of the Fed meeting next Wednesday, where Powell will tell us if his rate increases have kept services inflation under control. We also have payrolls next Friday, which will give us a look at both disability along with the payrolls realtime recession indicators.

Gold (GDX) rose 8.40 [+0.44%] to 1936.60. I keep expecting that gold might start to run out of gas, but that’s not happening.  Gold/Euros also moved higher, up 8.10 [+0.44%]. This is yet another new weekly closing high for Gold/Euros. Oddly, open interest fell this week, which is unusual given the new highs in gold. That’s a very positive sign, at least in my book.

In contrast to gold’s steady move higher, silver (SI) fell this week, losing 0.31 [-1.31%] to 23.62. According to the weekly model, silver has moved back into a downtrend. Silver’s bearish divergence from gold is similar to what we see in the miners [-0.65%], GDXJ:GDX ratio [-1.65%], as well as the GDX:Gold ratio [-0.78%]. All of that has historically been bearish for the metals.

Copper (HG) also moved lower, falling 0.03 [-0.68%] to 4.22. The weekly candle print (“dark cloud cover”) was also bearish, hinting at a possible reversal, although the model says copper remains in an uptrend.  Copper, silver and the miners all look a bit bearish.

Crude, the master resource, (CL) also moved lower, losing 1.96 [-2.40%] to 79.68. Gasoline also fell 0.06 [-2.13%] to 2.59.  The trend for crude is mixed – monthly downtrend, weekly uptrend.

This was another week of no-thefts from the Strategic Petroleum Reserve (SPR), but no additions either. Do we imagine the new WEF-Biden-Handler (former “pandemic of the unvaccinated/vaccine mandates” COVID Czar Zeints) is going to demand our national energy safety net be restored?

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