The Precious Metals Panic Continues

The headlines and stories continue to reflect the panic gold and silverbugs, at least the newbies, are feeling from the rapid rollover and decline in precious metals prices.

Of course the goldbug sensitive websites have also started to wring their hands as this excerpt from an article published today indicates:

Gold is falling because the Federal Reserve turned more hawkish. At its June meeting the Fed left rates unchanged, but nine of its 19 policymakers now expect at least one hike this year, and markets price roughly a 70% chance of an increase by September. Higher-for-longer policy lifts real Treasury yields, the main headwind for a non-yielding asset.

Let’s just park this thought and hit some serious reality as these pages have been warning for months now.

Gold was due a severe correction.
Equities are still due a severe correction which will drag gold and silver prices down even further.
Dollar strength is short term only as liquidity is thin and will remain so until the end of this year barring dramatic Federal Reserve and/or US Treasury action.
The Fed talked hawkish but has yet to truly exercise any options.
The “strong dollar” policy Treasury Secretary Scott Bessent talked up this morning is completely counter to the remainder of Trump’s theories and other members of his economic team. In fact while lowering prices temporarily, it will create larger economic problems on a global scale which will come back to bite the US.
Gold is not declining due to the Fed, Treasury, or a strong dollar. People need US dollars to engage in financial settlements and with the war, many nations are now selling their gold in lieu of other commodities they used to supply to avoid liquidating Treasuries en masse crashing that market.

So how does gold look today? Just fine, thank you very much.

If anyone is concerned they should not be. Barring a massive crash through the $3600 level and into the high two thousand area, technically speaking gold is fine. If anything it should rebound after a major financial market correction in the US and bounce back to the $4500 consolidation range.

On a more technical basis, let’s take a quick look at the short term on a long term chart, courtesy of StockCharts.com:

The lower levels of the Bollinger Bands are holding thus far. The Death Cross is now inevitable. At least 30-60 more days below the 50 and possibly 200 day moving average would not be unusual. And support is basically between the Nov 25th lower Bollinger Band around $3800 as these pages have been saying.

Let’s hope the “panicans” continue selling. Because to execute the unicorn economic world this administration wants us to play in is going to require an inflationary monetary pump unseen since the early 1920’s.

In Weimar Germany.