Gold - $2,000 Is a Death TrapThis is a follow up to my June 2 call for a new ATH on Gold, that will be bearish, instead of bullish:
Gold - When A New ATH Prints, Will You Get Trapped?
In the process of tracking this, price action did not meet expectations (in the sense that it has not traded low enough), and so I began to reconsider the overall topography of the market.
Also, right now, I have an open call on silver for $33:
Silver - 33 Moons
However, as price has not traded down the levels I regard as requisite to trigger a bull impulse, while I still believe that these high prices will manifest in the future, the market makers desire lower prices first.
One thing to note about gold is both the monthly and weekly bars are actually bearish despite price having formed a long-term triple top:
But in the shorter term (1H-4H-1D) candles, gold is clearly heading towards higher prices after bouncing exactly over $1,900.
As I've said before, one of the problems with a metals bull market right now is that Xi Jinping and the Chinese government (the Chinese Communist Party) have amassed a large amount of gold in recent months.
China's economy is doing extremely poorly following the decimation of the Party by Wuhan Pneumonia and the CCP faces threats on all sides, especially from the International Rules Based Order who now chatters about "de-risking" from China.
Since the United States tends to be the market maker of everything, this is trouble for China's central bank. Large stocks of gold and a heavily declining price will put the regime in a great deal of trouble, depleting the money it has available for buying people off.
And this is a huge geopolitical threat, for Xi Jinping has one Trump card to play: throw away the CCP in the middle of Beijing time, which is the U.S. night, and weaponize the 24-year-long persecution and genocide against Falun Dafa (Falun Gong) meditation, which was launched by Jiang Zemin and its band of toad cronies in Shanghai.
Another thing to note is since the pandemic crash, BUT BEFORE 2022, gold has had something of an inverse covariance with the SPX and the SPX has an inverse covariance with the USD.
But after 2022, gold has traded mostly in lockstep with the SPX, although in recent days and weeks that has begun to decouple.
Looking at the daily covariance, gold and the USD have an inverse covariance with the overextended equities market:
And I anticipate a USD rally, as I state here:
DXY - The US Petrdollar And The "Prigozhin Coup" In Russia
Since I believe what the market makers have in store for us is a significant downtrend in the equities market until September:
SPX/ES - An Analysis Of The 'JPM Collar'
Gold setting a new high right now doesn't make sense.
And so what I believe will happen is the target for the algorithm right now is $2,030, and it amounts to a short squeeze/bull trap.
This will both take out the June high and draw in buyside demand over the $2,000 level, since retail goldbugs are always pining for a new all time high.
But the rally will fail, again, and the markets at large will fail again (except for Natural Gas).
Natural Gas - The Girl Who Hopes You Remember Her
And as the rally fails we'll see lower prices. Probably ending in the $1,800 range.
This amounts to a 10%~ drop and is pretty painful if you're sitting leveraged long and even worse if you're leveraged on call options.
If $1,800 is violated, then the top is probably already in, in my opinion.
So, be careful and make sure you practice social distancing from atheism, Marxist-Leninism, the Theory of Evolution, QAnon, and the CCP itself.
Long gold is about returning to tradition, and mankind's Heaven sent traditions are even more luminous than an entire vault of 100.00% pure AU.
