After last Friday’s more dovish Jackson Hole FED Symposium speech by Chairman Powell, metals have been on an upside move. Gold closed at a record high today and silver is approaching $40 an ounce. Both metals held their upsloping 50-day moving averages from last week and are significantly above their 200-day upsloping moving averages. Gold was up 2.89% this week and silver was up 4.81%.
The Dow Jones Industrial Average (DJIA) popped higher last week on the Powell speech and has not followed through on that move being down .19% this week. Its 200-day moving average remains flat. This is the moving average that the hedge funds and money managers watch. The DJIA has gotten ahead of its 50-day upsloping moving average and when that has occurred in the past, price has usually, not always, reverted to the moving average.
The FED’s favorite inflation gauge, the Core Personal Consumption Expenditures Price Index (PCE) was up .3% on the month and 2.9% for the last 12 months, in line with expectations. Consumer spending was up .5% on the month indicating resilience amongst higher prices.
Go with the metals and the trend!
Until next time…