Markets are drifting aimlessly while we wait for US traders to get back from summer holidays. I remain convinced that we are witnessing a bear market rally that will have a use-by date in the next few weeks or months.
High UK inflation figures during the week reminded investors that inflation hasn’t been tamed yet, and bond markets sold off. Gold and Bitcoin [BTC] reacted to the rise in yields by turning down after a solid rally over the past three weeks.
The gold chart has turned bearish in the short term, so the focus should be on the major support level at US$1,680, which is only $70 below the current price. If gold falls below there, we could witness a huge fall in the gold price.
I reckon that would set up a buying opportunity, but current gold bulls should be prepared for some fireworks if the support can’t hold.
In today’s ‘Closing Bell’ video, I show you why I think the S&P 500 is setting up for another leg lower and point out the bearish setup in gold. I also update you on the three stocks I told you about a few weeks ago. They have all had a good run, so I hope a few of you managed to jump on.
Until next week,
 |
Murray Dawes,
Editor, Money Weekend
