Lemon
A-Share/HK/US Equity Commentary, Ex-HSBC Investment Banker
Gold offers a fairly certain opportunity once the first leg of a US stock decline stabilizes. Gold usually falls with US stocks when they start to drop, then tends to find good opportunity after that first phase ends. Commodities will likely outperform US AI-related tech, US stocks are at high levels, and a US rate hike would be the point to heighten risk caution, though the downturn may come at an unexpected time. x.comÂ
Gold has entered a correction because rising odds of hawkish Fed hikes weigh on it, and gold is more likely to rise only when cuts are expected. Institutions see about a 50% chance each of 25bp hikes in September and December, the worst case, so gold may range between $4,000 and $4,500 absent a major shift such as a weak economy or stock crash. No one wants high rates for long, so cuts should come eventually, and gold remains worth 5-20% of household assets, ideally bought nearer $4,000. x.comÂ
Gold remains bullish because its correction and investor washout fit the expected cycle reset before the next major move. After two strong years, the projected cycle low is approaching, making the shakeout a setup within gold's multi-year cycle rather than a break in the long-term trend. x.com x.comÂ
Gold is extremely attractive now because rising market fear could make it a great hedge. It has fallen nearly 30% from its January all-time high and returned to the accumulation zone. If this level holds, expect a bounce soon. x.comÂ
Gold tends to perform poorly when liquidity contracts, while it performs best during recoveries. Gold looks likely to fall next year. x.com x.comÂ
Gold has swung from overbought to oversold, making gold-related exposure a good place to start deploying capital. Last week gold fell 10% as Brent jumped 9% to $112 on the Iran war and hawkish central banks lifted yields; losses on stocks, bonds and metals at once usually signal forced deleveraging near a short-term bottom. Only 18% of tracked technical metrics were oversold against a ~50% bottom threshold, though escalation could push it there, and little good news on Iran could spark a rally. … Show more
Gold is worth owning because of unstable, inconsistent central bank policy, currency depreciation and a lack of fiscal discipline from both parties in Washington. The predictable pressure on precious metals from higher rates and fears of a Fed hike tomorrow is likely discounted or close to it, so the risk/reward is attractive despite a technical breakdown evident for weeks. Like any commodity whose intrinsic value is hard to calculate, gold will stay volatile on both the downside and upside. … Show more
Seasonality is unfavorable for gold over the next few weeks, adding to the intermediate downside case. Based on 30-50 years of data, this is not one of the preferred 70% zones and seasonality is only a confluence, never a standalone signal. Losing the $3,955 low opens a normal backtest toward $3,450; gold tends to bottom in mid-November and mid-March. A pullback to the $3,000 area, if it occurs, would be a long-term buying opportunity. x.com x.com x.comÂ
Gold is set for a brutal reversal higher, because it is down almost 30% from its all-time high and everyone is positioned for more downside, exactly when such reversals begin. x.comÂ
Gold's 10% drop is a positioning wipeout, not a reaction to Trump backing down. With traders losing their minds, that makes it time to bid for short-term scalps, a scalping heaven rather than a long-term entry. x.com x.comÂ
Gold's failure to rise even after rates pulled back decently challenges the earlier high-rate explanation for its weakness. GLD is close to fresh 11-month lows and just closed at a new 14-month low relative to the S&P 500. Gold has trended down since its parabolic January peak. x.com x.comÂ
Gold looks to be starting a new uptrend after resetting, though it may need a bit more time, because the debasement trade is alive and well. Aggressive FX intervention and signals of 'whatever it takes' bond market management from Treasury Secretary Bessent support it, and there are valid worries these are band-aid fixes. x.comÂ
