Once again, there’s not much for me to add to what I had posted previously.
After Friday’s move up in gold futures, gold is back down and the price moves in the mining stocks and the USD Index point to exactly the same thing as they’ve been pointing to previously.
Namely, it’s just a correction. It’s most clearly visible in case of the USD Index.
The USD Index (cash) moved to the previous low and now is clearly back up.
The USD Index futures tested the previous 2026 highs twice and in each case they rallied back up.
This is a classic example of breakout’s verification. The USD index is clearly building a based for another have up.
This is likely to correspond to another wave down in the precious metals sector and other commodities, and there’s nothing in case of gold, silver, and mining stock charts that would contradict that – at least nothing major based on the tools that I’m using.
[Analysis of mining stocks and detailed targets are available in full Gold Trading Alert.]
Gold futures and silver futures simply moved to their declining resistance lines – that’s it. The downtrends remain intact.
Let me add a word on the news, since last week gave the metals their reason to bounce.
The soft June jobs report did the work. Payrolls came in at 57,000 against a forecast near 110,000, and the market cut the odds of a September rate hike to 50% from 66%. That lifted gold on Friday and handed it its first weekly gain in five weeks. I take the point, and it changes less than the headline suggests. Core inflation is still running well above the Fed's 2% target, so a weak jobs print moves the Fed from likely to hike toward standing pat, not toward cutting. Warsh said as much last week, pairing softer wording on inflation with a plain commitment to price stability. The case for a hike has thinned. The case for a cut has not arrived. That leaves the dollar's breakout doing the work, and the dollar is holding it.
Iran stayed loud but not dangerous over the weekend. The Doha round produced little beyond talk on the Strait and frozen assets, with the nuclear question set aside, and Iran keeps saying it will charge tolls in the Strait once the 60-day window ends. Khamenei's funeral in Tehran today drew huge crowds and open calls for revenge against the US. That is worth watching, but it is rhetoric for now, not action, and no fresh strikes have come. Oil is flat, so none of it is handing gold a fear bid.
Trump spent the weekend on the July 4th anniversary events, with nothing on trade or policy to move the market. So the metals are trading on rates and the dollar, which is where I think they belong.
The trend remains down.
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Sincerely,
Przemyslaw K. Radomski, CFA