Last Friday morning, nonfarm payrolls data came in much stronger than expected, knocking $20 off the gold price and dashing hopes of near-term Fed rate cuts.
Most people at the top of intermediate cycles, they've got the fear of missing out (FOMO), and that causes people to buy too early if caught in the beginning of the decline.
I believe there was a leakage in US May nonfarm payrolls last Friday. The excuse and guse of stopping gold buying by the Chinese central bank was just media hype.
Gold had a volatile week as the recent corrective period continues. But despite a huge overreaction on Friday to the job numbers the bull remains intact.
So fragile now is the state of the economy, the state of the stock market and the state of the world in many respects. Therefore Gold is the place to be!
After being overbought in recent months, gold could use a healthy pullback. Gold also has good odds of surging further. So rather unusually, gold could move either way this summer.
Gold has broken the pattern of lower highs and lower lows, signaling the downtrend has ended. Closing above the 18-day average signals an upward bias, with the battleground around $2390.
Interest rate cuts initially will be bullish for precious metals and base metals and energies. The overall trend will be there for gold and silver and copper for the rest of the year.
