American Civil War Union Army General William Tecumseh Sherman coined the infamous phrase: “War is hell”, as woefully we again are witnessing all ’round the Middle East. ‘Tis remindful from the original “35 Undeniable Truths of Life” (hat-tip R.H.L.) therein of No. 6: “Ours is a world governed by the aggressive use of force.”
And yet from the “History Repeats Itself Dept.”, Gold today (as we anticipated ‘twould be) is lower than ’twas prior to its pre-war settle Friday a week ago (then 5296) than ’tis today at 5181. This is normal — as we’ve herein pointed out time and again — following geo-political price spikes; (ref –> Gold Update No. 729 of 04 November 2023: “Gold’s Post-Geopolitical Pullback“).
To wit for this most recent episode, Gold last Monday initially spiked up to 5434 (-152 points below its 29 January record high of 5586), only to then plunge to as low as 5005 just two trading days into the war, the exact timing as happened back in 2022 at the onset of the RUS/UKR incursion. And credit the three authors of Bloomy’s “Long-Trusted Haven Trades Are Failing as Gold, Treasuries Fall” for also pointing out such similarity. For yet again, Gold has now recorded a “Spike n’ Plunge” in reacting to geo-political stress.
“Because Gold is ultimately valued by Dollar debasement, not geo-politics, right mmb?”
Spot on, Squire, and welcome back. Indeed per the opening Scoreboard, Gold today at 5181 is just +2.4% above its BEGOS Market valuation of 5060, but moreover is +33.3% above Fair Value of 3886, (not that we expect price shall suddenly revert back down there). Regardless, with the war underway, ’tis the Dollar that’s been getting the bid, (even as we’ve on occasion quipped that historically “Gold plays no currency favourites”). Here are their respective percentage tracks for just this past week:
‘Course year-to-date, Gold (+19.6%) has left the Dollar (+0.8%) in the dust. But again, they directionally can move together: recall in 2024 from January through mid-April that even as Gold rose +14%, the Dollar, too, was on the move +4.7%. More importantly, despite Gold’s usual early-conflict slide, should warring events significantly worsen and/or widen, the yellow metal can swiftly — even if only “momentarily” — ascend into uncharted territory.
As for Gold’s week just past, ’tis the rightmost bar as we turn to the weekly bars and dotted parabolic trends from a year ago-to-date. And following this new war’s commencement, we heard there was speculation of Gold having made a record high (i.e. above 5586) which clearly didn’t occur. Still, despite Gold’s down week, the blue-dotted parabolic Long trend printed its 13th dot, the flip-to-Short level having risen for the ensuing week to 4889. That is -292 points below the present price of 5181, which technically however is reachable given Gold’s expected weekly trading range is now 318 points:
That cited, the expected daily trading ranges for the precious metals have in fact continued to compress; (ref –> Gold Update No. 848 of this past 14 February: “Gold’s Range Compresses as the Uptrend Regresses“). Below we’ve such “EDTRs” from one year ago-to-date for Gold on the left and for Silver on the right. (We hasten to remind you WestPalmBeachers down there that this is not direction of price; rather ’tis expected range of price from one trading day to the next). Such narrowing noted, these EDTRs remain well above historical norms:
As for the StateSide economy’s norm, we’re not fully convinced of various measures being on form. To date, some reports continue to be confounded from the last October-November government “shutdown”. Take this past week as an example: on Wednesday, Automatic Data Processing issued for February very improved Employment data over that for January. But then the Bureau of Labor Statistics issued February Payrolls shrinkage for the first time since that for October, (such month’s negative data we sense having been roughly pieced together, even as ADP back then reported gains).
The point (albeit a question) is: is the Federal Reserve’s Open Market Committee being put in a stagflationary box with Payrolls declining whilst inflation is rising? Cue Murray Head from ’75: 
“Say It Ain’t So, Joe”
as we go to the Baro:
In fact, for the Economic Barometer’s 16 incoming metrics of this past week, only a scant three were better period-over-period, the worst being Labor’s negative Payrolls, also which well-missed consensus and saw the January level revised lower. And as for the Fed in a rut, Payrolls say “Cut!” whereas inflation says “Raise!” … else come stagflation days? Oh how weighs such economic haze!
Looking to Gold’s near-term ways, here next are our displays of price’s daily bars from three months ago-to-date at left and 10-day market Profile at right. The baby blue dots of regression trend consistency survived that recent test of the 0% axis upon such slant only briefly having rotated to negative. Then came the prior week’s bounce followed by last week’s trounce. To be sure: “Follow the blues instead of the news, else lose yer shoes”, even as the ride of late has been a bit erratic. Note in the Profile that Gold’s present price of 5181 is just below the most volume-dominant resistor as labeled at 5195:
Here too we’ve the like graphic for Silver, having settled yesterday (Friday) at 84.70. Her “Baby Blues” (below left) have had far more sweep than those for Gold: in fact, Silver’s mid-panel price plunge registered -48%, whereas that above for Gold was “only” -21%. As for her Profile (below right) Sister Silver is sitting on a settee of labeled volume-dominant support from 84.30 down to 82.45. Cautiously however by the opening Scoreboard, Silver’s Fair Value of 56.06 is -34% below present price. Hang in there, Sister Silver!
Towards wrapping, we’ve this from the “FinMedia Exaggeration Dept.” Of the nine full trading weeks thus far this year, the past one for the S&P 500 ranked third (not most) for total points distance traveled (6901 to 6710, i.e. -191 points or -2.8%). Yet, an intra-day drop of -1.96% on Thursday for “The Dow” (that Index at which our parents used to look) was reported by a financial source we encountered as a “crash”: “they” don’t know what a crash looks like.
But the best descriptive verb we read came (again) from Bloomy, referring to the Middle East war as have roiled the markets, (our selectively therein highlighting oil). Having closed the prior Friday at 67.29, West Texas Intermediate Oil reached up to as high as 92.61 yesterday, an intra-week gain of nearly +38% to a price not seen since 29 September 2023. And with the Straits of Hormuz being characterized as “shut”, TV news here showed cars in long lines for petrol in places like Nice and Grasse. Back to the 70s we go? We hope not so.
But with respect to energy consumption there is some good news: StateSide, they shan’t be burning as much midnight oil. Why? Because with two full weeks of winter still in the balance, the U.S. “tonight” ridiculously moves to summer hours:
Why do we care? Because given the long-standing tradition of The Gold Update being posted each Saturday at 11:00 Pacific Time, if you’re outside most of North America, the following three editions (each of 14, 21 and 28 March) can be read an hour earlier as on this side of The Pond we’ll still more sensibly be on winter hours until 29 March; (thus in this CET time-zone at 19:00 instead of the usual 20:00).
Either way, price’s present slide aside, regardless of your hour, just stay with Gold’s power!
(Oh good grief, Squire…)
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
deMeadville. Copyright Ⓒ 2010 - 2026. All Rights Reserved.
About the author
