I have been bullish on gold for a year or more.
The Market Ear sets us up.
Decision time in gold
Gold is back flirting with the short term negative trend line. The bounces on the 50 day and the long term trend were once again schoolbook examples of buying dips in strong trends. A “proper” close above the $3350 and gold risks going squeezy again.
Source: LSEG Workspace
Unstoppable
Annualized gold inflows pushing higher and higher.
Source: BofA
Gold loves VIX
The everything hedge loves a rising VIX.
Source: LSEG Workspace
Never too late?
Gold net non commercials have refused to participate in the gold melt up this year. Did they just decide to reverse that logic?
Source: LSEG Workspace
Supported by the dollar
Gold and the DXY (inverted) moving in perfect tandem…
Source: LSEG Workspace
Golden options
Gold volatility trades with an upside skew, i.e gold up, gold volatility up. The GVZ has come down during gold’s consolidation. Using options for upside exposure is attractive at these levels.
Source: LSEG Workspace
Basically, gold remains the anti-dollar play.
It still looks good.
- More Trump tariffs mean DXY down.
- Less Trump tariffs mean more Fed and DXY down.
- Trump tax cuts equal bigger deficits, and DXY down.
- ECB pause means DXY down.
The biggest risk is not the gold long, which looks good, but the DXY short, which is extreme.
