FLASH GAGE – Gold Sell Off Analysis

Flash Gage - News Headlines that Impact precious metals as they happen.

Walt’s believe it or not “Flash Gage.”

There are three components to the selloff in gold this morning.

  1. Coppers strong reversal from last Fridays close being up an incredible 20 percent in just one week. Now reversing breaking thru key support levels.
  2. Nickel trading up at a 17 month high also taking in a strong reversal.
  3. Most important…is what has fueled the stock market is beginning to take a negative effect on the gold price. That is an increase in interest rates ahead of the next Fed meeting. Bond yields the major factor in the selloff of Gold this morning on President elects plan to significantly increase spending on infrastructure. This can increase the inflation outlook and substantially increase the rate of rate hikes next year.

Rising yields and a stronger dollar really putting gold in a strong sell off this morning.

With the stock market flat to a little lower this morning, I expected gold to be supported at the $1,250 area, but as we traded thru that level selling really accelerated and took gold below the $1,230 level.

The negative correlation between the price of Gold and equities has completely reversed today as the stronger dollar and a potential in runaway spending takes front stage for the time being.

All I can say now is “watch out below.”

Enjoy the rest of your day.

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