GViZ otherwise know as gold volatility has stayed very low around 11 or under. We’ve just seen gold put in a series of higher lows, moving essentially sideways in consolidating pattern and it also closed making a higher high. Before pulling back a little after Powell's dubious speech on Wednesday.
But here’s the thing:
Gold is fully in the investable bucket with GVIS anywhere under 17/16. This is really now telling you something big is evolving macro economically.
Powell just held rates but the market said No!! you’re wrong…. and rates climbed significantly regardless - bond Yields ARE breaking out higher across the curve since the FOMC meeting.. and meanwhile gold trading sideways pretty much suggests a huge move higher is imminent
Astonishingly, the BOND Market basically just gave Powell the middle finger it seems … he’s lost them….. could it be they are losing trust or have now totally lost trust in him.
Seems the reason is most likely Powell buckled to Goldman/Carlyle/BREIT pressures. He claimed he was “data dependent” on rates, then backtracked. He chose to tell the market he was not raising rates, despite the totally obvious re acceleration in inflation - oil just jumped roughly 40% in price since may. Inflation is back and big time.
Consequently the bond market is now calling out Powell as a liar… and he did tell lies - he’s probably being influenced by powerful financial lobbyists who want a more dovish 'cowbell' monetary policy ( and their tech bubble back..)
Stuff is breaking up now across the US tech sector. Apple, Amazon and NVIDIA all breaking long term trade trend support. These are 3 of the big 7 stocks holding almost everything up.
And as most of you will know.,. The consumer is definitely not in great shape. Tin hats time folks for US tech sector.
If Powell was being “begged” by certain market participants not to raise rates, but the bond market raises them anyway…. Then It’s ‘going off’ imo.
Gold is on the cusp here of a HUGE move north IMO.
You can see the long term gold tail support (blue line and the big yellow arrows) going back to 2016 in play... and the break to a single higher high (the green arrow) - This suggest Gold is trying to break out now, higher, but bond yields and the dollar are effectively holding a ballon underwater ... I give a it few days to a few weeks before we see something decisive.
Not sure whet the trigger will be - but there's big trouble brewing in China where an absolutely massive property company Country Garden is about to default on it's bond coupon - they are already late, and well into the 'grace period' which ends in about 10 days.
Someone big, somewhere is panicking .
When it happens - it will be fast. You can see the formation of the previous major 'multi month' bull flag in this long term chart. And what happened next:
You can see here a breakdown in the S&P 500... Now its not definitive. But That's the bond market causing a sell off. Risk tech stocks don't like very high interest rates... US tech bubble stocks Tesla require easy money policy so companies can borrow money at low rates to fund their growth and buy their stock back.
And It's quite possible this dip breakdown could signal a major turning point. Interesting also that Brent fell so hard this morning.
