The Daily Gold, Released on 6/19/23
Significant moves in Gold and outperformance for Gold against the stock market occur when the yield curve steepens. A steepening curve precedes Fed rate cuts and usually signals a recession. The stock market typically peaks around the time of the last rate hike. During recessions the stock market declines with the rate cuts. During soft landings, the stock market will begin rising before the Fed is done with rate cuts. At present, the setup is there for the stock market to peak around the time of the last rate hike. If the market rolls over and sense recession, then the Fed will cut rates and Gold will have already broken out. If the time between the last hike and the first cut is long (6-9 months) then Gold would continue to consolidate.
Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association.. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection for the sophisticated investor, as well as TheDailyGold Global, an add-on service for subscribers which covers global capital markets.