So many caught out here.A snippet from Sprott
Donald Trump’s election, combined with Republican majorities in both the House and Senate, clearly marks a new direction for U.S. government policy. Given that U.S. government policy and actions are a dominant factor in the world economy, we think it is important to take stock as to how the policies of Trump’s presidency might affect markets and, therefore, our investments and speculations.
Below is a snapshot of how certain commodities and major markets have moved this week:
Dow Jones up 4.5%, copper up 10%, Nickel up 13%, Oil about even, Gold down 5.5%, Silver down 5%, and the 10-year Treasury yield up 20% (!).
Many of these weekly percentage changes are significantly larger than average weekly variations, and we think some could be meaningful indications of what might occur as Trump’s policies take effect, while others might be short-term head fakes and non-indicative of longer term trends.
We will take the weekend to collate our own thoughts in combination with those of the broader Sprott group, and disseminate our ideas to you over the coming weeks.
In the meantime, here is a snippet of short-term analysis on the action in the gold market:
If you’ve been following the gold market over the past few days, you’ll have noticed golds negative reaction to Donald Trump winning the U.S. presidential election (contrary to what the vast majority of analysts expected).
Today the gold price has punched below the technical support level of $1,250 which initiated a chain reaction of stop losses, further exacerbating the decline. Gold closed the week at $1,225.
The charts now suggest we are likely to see a test of $1,220 to $1,200 (see the chart below), a very key support level where we have seen significant buying in the past. $1,200 is a level that warrants close attention: |
|