Looking at the performance data, gold prices are up 2.4% this week, 3.63% since the beginning of the year and 6.75% in the past 52 weeks. Professional analyst Phillip Streible notes that last year, gold’s lack of performance was due to accelerating growth along with rising inflation. Phillip Streible’s market comments and gold analysis in his own words cryptocoin.com We have prepared for our readers.
Gold performs well in stagflation and deflation environments
You can choose any other commodity or any high growth/high beta stock and go up to the Nasdaq high of November 19 as a winner. From this point on, you can see that inflation remains sticky (ie crude oil, gasoline, agriculture) while growth stalls and slows with the advent of Omicron. Keep in mind that gold’s best performing economic environment has always been stagflation and deflation (both with declining growth), while reflation (increasing growth) tends to leave gold in the dust.
Gold is currently the best of both worlds, running with the right economic environment and a geopolitical tailwind that should keep corrections shallow. The Fed has put itself between a rock and a hard place, waiting too long for rate hikes to begin in a slowing economic environment.
This will keep deflation here for the foreseeable future. So you should be ‘sell the lags’ in stocks and ‘buy downs’ in gold.
Even with this breakout, we have three reasons to believe it is not too late to make corrections. We think the US dollar peaked at the start or early stages of a walking cycle, and we remember gold bottoming out the day after the Fed’s removal in December 2016. This time is no different, with a 50% probability the Fed will raise 175 basis points in 2022.
Russia and China are at the head of geopolitical tensions and have been major gold buyers since 2019. If geopolitical tensions dissipate after Ukraine, wait until China attacks Taiwan. Investors love to follow Buffet’s stock predictions, why not Russia/China gold habits. Investors did not follow the opportunistic Russian/Chinese gold buying trend. 2021 ended with the highest negative on gold at the start of a seasonally bullish period. The CME Managed-Money Net Long record is 261,000 contracts, with room for 300% growth currently at 69k contracts.
Techniques for gold prices levels
The resistance levels are 1900**, 1919.2-1930,3**** dollars respectively. The pivot level is $1,896. The support levels are respectively: $1,879.5-1,883.3***, $1,867-1,871**, $1,855**, $1,837.4-1,843***. Looking at the techniques, gold prices made a constructive exit from the downtrend of $2,067, which was the August 2020 peak.
Note the Pivots mentioned above. Below, decisive action in the session after an early rise will signal short-term rejection and exhaustion. Gold’s last leg remains intact as it trades above the big three star support at 1,879.5-1,883.3.
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