Gold has had an amazing run to start this year, thanks to a weakening dollar and the end of the rate hiking cycle.
HOWEVER – the bulls may be in for a brief rough patch…
Gold Bugs, follow me for a quick update ☟☟
σ In the last week, the yellow metal has met a significant resistance area near 2050.
With speculative positioning at also 1-year highs, could the market be gearing up to inflict some pain on Gold investors?
σ While we’re big believers in a long-term allocation to Gold, we’re playing it safe right now with the price setup we currently see.
We’ve taken off our tactical longs on Gold.
And while also hedging our Silver exposure using risk reversals.
Our subs are familiar with my thoughts on the current relationship between GLD/SLV that we are playing right now.
σ Beyond what we’re seeing in the Gold chart, real yields have been on the rise.
And the dollar is at a critical level on the long-term chart.
These dynamics definitely leave the door open for a potential pullback in Gold.
σ If central bank buying pauses their gold bullion buying while yields continue to climb for the next month or two, then we think a consolidation down to the 1930-1960 zone could be in the cards.
But with the recent spike in price appreciation in a relatively short amount of time, this would be healthy for Gold.
And it would provide a prime entry point for new longs to play for when the market bounces back.
Keep a better eye on Gold by watching the attached clip from today’s Macro Options Spotlight
➠ Watch today’s full Spotlight to also see:
• Recap of yesterday & overnight price action
• Today’s Cross Asset Vol Summary
• VIX collapsing into expiry, but VVIX holding
• VIX Volatility Dashboard & VIX trade idea
☞ Macro Options Daily | April 18, 2023 ☜
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