It has been an extremely long and arduous fall, now spanning nearly 7 months – but it looks like we’ve finally come to a place where things should likely turn around. The rate cut cycle is nearing completion, and investors have been given ample warning from hike to hike so… it doesn’t feel like there are too many surprises left. We’ve seen the air come out of nearly all assets with gold and silver no exception but as we’ve seen time ‘n time again. It can’t go down forever.
The 4 Hour Chart has risen to break the downtrend and has now pulled back to a solid area of support at 1650.00 – a number where we’ve seen pretty solid support in the past, and right on the dot with respect to the Fibonacci Retracements.
Investors can expect gold prices to remain volatile for the foreseeable future as markets react to ever-changing interest rate expectations; however, the precious metal still provides long-term value and protection in a portfolio.
Analysts have pointed out in recent weeks that the traditional 60/40 portfolio allocation has seen its worst start to the year since the mid-1930s. The S&P 500 is down more than 20% this year and an aggregate of bonds is down roughly 15%. Meanwhile, gold prices are down about 10% so far this year as prices continue to hold support at around $1,650 an ounce.
Perhaps not tomorrow, but I’d keep an eye on gold here at 1650 as a solid line of support, and likely a solid place to start a position for a longer term hold.