Gold Sentiment - Determining Trade Direction

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07.25.19 sentiment: Slightly Bullish

Today I feel confident downgrading my sentiment to 'Slightly Bullish'. For those of us that have been waiting for the right moment to decrease their exposure to gold or exit altogether.. now might not be a bad time. I'm personally leaving some skin in the game for the upside swing potential but doing a bit of re-sizing.

Trend durability - Neutral
The trend has really petered out since the end of last month. After the ECB rate decision this morning gold just relaxed a few pegs. The way I see it the trend could easily resume but we are just treading water right now.

Global Stability - Slightly Bullish
There was another peice of good economic data today related to US durable goods orders. At the same time the ECB is hinting about future rate cuts while they are already sitting at 0%. Things are a bit confusing out there but most of the previous geopolitical risks remain.

GLD put call/ratio - Very Bullish
The ratio is currently at 0.503 which sets the new record low. The trend in the ratio continues downward and gives gold bulls hope that the price movement today is just a bit of retracement and short term profit taking

Fed rate expectations - Slightly Bullish
The probabilities for end of July Fed rates are 78.6% of 200-225bps and 21.4% of 175-200bps. I am less confused now that the confidence levels are shifting back toward a 25bps rate cut at the end of the month. Still bullish if you take it at face value but considering where expectations were going before and what the market has already accepted there is no blinking light here right now.

US10Y - Bullish
Yields on the 10 year treasury are still in the same zone. Today we sit at 2.07%, we will see if yields are on their way back up or not.

07.29.19 sentiment: Bullish

My downgrade to 'Slightly Bullish' did not last long - I am glad I have held onto some of my IAU longs. I did swap out some of my gold longs for silver longs because I think it will appreciate along with gold but has some catching up to do as well. I am looking forward to Wednesday even though I doubt that gold will challenge the 1450 range. I am expecting the 25 bps cut to cause a temporary dip in gold. How long and far down that dip goes will tell me a lot of what I want to know.

Trend durability - Slightly Bullish
I really liked what I saw when gold rebounded from the 2Q19 US GDP data on Friday. I also have a good feeling about the way the daily candle setup looks at the moment - we are sitting above SMA and there are characteristics of a rally pause/resume wave.



Global Stability - Slightly Bullish
The gloomy Chinese data recently has counteracted the upbeat sentiment from other areas of the world and since they are such a large nation in the global scheme I don't think we should ignore such signs. There were also a number of odd accusations made by Trump Friday afternoon about currency manipulation. I'm not so sure the accusations will crop up again but you never know.

GLD put call/ratio - Very Bullish
The ratio is currently at 0.479 setting yet another record low. This indicator has held its strength for quite sometime and I think it deserves attention so long as gold does not move significantly against where it points us.

Fed rate expectations - Bullish
The probabilities for end of July Fed rates are 75.0% of 200-225bps and 25.0% of 175-200bps. It is a bit surprising that the markets are not more confident about the fed's direction so close to the announcement, especially since we were above 80% of a 25bps cut at the end of last week. I think it is very likely the market will need to re-price a bit for the 25bps cut on the 31st but if there are actors accounting for the 25% that have noticed something we have not it brings some serious upside for bulls.

US10Y - Bullish
Yields on the 10 year treasury are still in the same zone. Today we sit at 2.06% and it appears there is strong resistance to anything much higher.

08.08.19 sentiment: Bullish

Today I see the markets on the cusp of a Very Bullish sentiment. One of my major reservations about being all in on gold right now is the GLD put/call ratio. Personally I took some profits before the close yesterday but would jump at the right chance to get heavier back into the market. If all signals remain the same and gold drops to around 1450 I will certainly scale up.

Trend durability - Very Bullish
I zoomed out a bit today when analyzing the price trend to capture the past week of movement and boy is the trend strong right now. Two very big bearish news events (Fed dispelling market conjecture about faster rate cuts and Trump providing some leeway on China trade tariffs) did not stop Gold's roll.



Global Stability - Bullish
Trump is upset about USD strength, China has been labeled a currency manipulator and is gearing up for a larger fight, the US is implementing an additional 10% tariff on China, there are concerns about Saudi oil production.. etc. No shortage of mid-level crisis going on right now. The pot is bubbling but it has not boiled over at the moment.

GLD put call/ratio - Bullish
The ratio is at 0.500 which is quite bullish but has been headed into less bullish territory than previously. I have a feeling that this indicator is a bit more leading than some of the others. Based on the history of this thread that would be the case anyway. It is not signalling caution to the bulls yet but that could be in the cards.

Fed rate expectations - Bullish
At this point in time another rate cut is guaranteed on Sep 18th but some feel that the cut will be a 50bps cut. The split is 88.1% / 11.9%. This reminds me of where we sat mid July but it is still telling considering how low rates already are and how recently we already cut Fed funds after reversing course from rate hikes.

US10Y - Very Bullish
The US10Y is at an astounding 1.758% after dipping to a low of 1.672% on August 6th. I think we are just low enough to signal a very bullish indicator for this category.