Mish’s Daily: Higher Gold Coming, But Patience Investors
Written by Michele ‘Mish’ Schneider
For today, I am reprinting an interview I did for Kitco News with Neils Christensen, written by Neils. (Kitco News) – The gold market remains in a solid holding pattern as it waits for some direction from the Federal Reserve, and one market strategist is warning potential precious metals investors that they need to be patient as 2024 will be the year of nuanced trading.
In a recent interview with Kitco News, Michele Schneider, Chief Strategist at MarketGauge, said that while she is bullish on gold and silver in the new year, the precious metal market could see some volatility and weakness in the first half of the year.
The comments come as gold remains stuck below resistance at $2,050 an ounce. February gold futures last traded at $2,034.10 an ounce, up 0.43% on the day.
Although the Federal Reserve is expected to cut interest rates this year, Schneider said that the gold market appears to have gotten ahead of itself as it has priced in aggressive easing of five or six rate cuts. She added that it is more likely that the Federal Reserve will cut rates maybe three times, with the first cut coming in June.
Schneider said the Federal Reserve remains focused on inflation because the threat hasn’t disappeared as economic activity remains reasonably robust, driven by solid consumer demand. At the same time, consumers have been living beyond their means, spending with credit, which could significantly threaten future growth.
She noted that inflation is currently following the same pattern created in the 1970s. Given the history, she doesn’t expect that the U.S. economy has seen a significant change in inflation pressures.
“Right now, what we are seeing is more of a correction than anything else. I don’t think it is a sea change,” she said. “This is why the Fed has been so two-faced on monetary policy because there are reasons to cut, and there are reasons to remain higher for longer.”
Schneider said that the Federal Reserve is dancing on a pinhead, hoping inflation has truly bottomed and consumers see some normalization in the economy. She added that this uncertainty will weigh on gold.
Looking at the gold market, Schneider said that she could see prices dropping below $2,000 an ounce and testing initial support around $1,980 an ounce, potentially falling back to $1,940 an ounce within the first half of this year.
However, she added that she expects that to be a significant buying opportunity as a weakening economy forces the Federal Reserve to ease interest rates, giving up on the inflation battle.
“I don’t see a massive selloff in gold, but it’s more like a slow deterioration in the price,” she said.
In the second half of the year, as recession fears start to gain momentum, Schneider said that she would expect the Fed not to hesitate in its support for the economy. Although the economy has held up fairly well, Schneider said there are clear indications that employment has peaked.
Looking to the second half of the year and into 2025 and beyond, Schneider said that she expects any selloff now would mark the low point for gold, and she would then expect a long-term uptrend with prices pushing to $2,400 an ounce.
“I can’t say that we are definitely going to see a hard landing, but at the same time, I can’t completely rule out that scenario,” she said. “If conditions to breakdown, I think the Fed would rather err on the side of keeping the economy moving than rising prices, and this is when you want to have that price hedge like gold.
Schneider said the Fed’s worst-case scenario would be stagflation, an environment of higher prices and slower growth.
“Gold is seeing choppy trading because we just don’t know what will happen, so you need to be patient and wait. Generally, I think it’s better to prepare for a hard landing than to assume a soft landing,” she said.
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Mish in the Media
Kitco News An Article with Neils Christensen on the direction for gold 01-30-24
Business First AM Mish covers how important small caps are and why she likes 2 different industrial metals 01-30-24
Yahoo Finance 33 Charts for 2024 -Article
CMC Markets Mish covers the Fed, earnings, jobs number and how it all might impact futures and equities 01-30-24
CMC Markets Keep watching Mish’s clips on trading futures and you’ll be making money in commodities in no time 01-25-24
CNBC Asia Mish is a favorite guest in Singapore, where she gets to talk about the macro and how to think about investing in the big picture. This is a short clip on Tesla 01-25-24
Stockpick Jillian Glickman and Mish discuss economic outlook and current investment picks plus forecasts on inflation. 01-22-24
Dale Pinkert FXTrader Mish and Dale discuss the equities and futures marklets and how she and MarketGauge are positioned right now 01-25-24
Yahoo Finance Mish makes up a new ETF (not real) called VAIN-but really discusses the basket of stocks that are worth watching 01-24-24
Against All Odds Jason Perz Podcast-The mental game of trading, commodities, futures, equities, technical analysis, macro-we cover it all 01-16-24
StockchartsTV How Calendar Ranges can Predict Market Direction-Mish and Geoff cover how this indicator tells you who and what to believe, when to act and what to trade 01-16-24
February 2 Benzinga Pre Market Show
February 5 Money Show Life with Chuck Jaffe
February 21-23 The Money Show in Las Vegas
February 29 Yahoo Finance
February 29 Your Daily Five Stockcharts
Weekly: Business First AM, CMC Markets
S&P 500 (SPY) 480 now the pivotal zone
Russell 2000 (IWM) 195 pivotal, 190 support to hold
Dow (DIA) 375 support
Nasdaq (QQQ) 415 support
Regional banks (KRE) 50 key to hold
Semiconductors (SMH) 184 support
Transportation (IYT) 262 now pivotal
Biotechnology (IBB) 135 pivotal
Retail (XRT) Flirting with 70, which has to clear and hold to stay very bullish