evening wrap, july 22

market vibes

“There is nothing more deceptive than an obvious fact.” Sherlock Holmes

Gold broke out of a well-formed rising wedge yesterday on rising volume and a notable surge of open interest. However, Asia did not follow through overnight, and it was reasonable to wonder what would be the strong side of the market in Tuesday’s session. There we have it.

After three months of horizontal activity, unchanging open interest, and every possible narrative imaginable that might move the gold market, nothing did. A stock crash, social discontent in LA, a war with Iran, and DXY falling 5% high to low. Gold slept like a baby, until yesterday.

This morning, as BOE’s Bailey commented, “The most crowded trade on the board is short the dollar,” implying the dollar should go up. He was wrong. Dollar-Yen fell 0.80 bps, EUR/USD, GBP, etc., rallied.

Gold rallied $50 an hour before Comex and, like yesterday, held its gains at the highs through the session. This is an updated 30-day compression profile that I have been updating and posting all through June and July.

The line up tonight, with a bit more depth I might add, is silver at a new 14 year high, copper about to make an ATH, the oil bear in midlleage, bitcoin going into the July/August roll, a tempting short in Nvidia (I think), and kind words for Powel in the vibe…. let us proceed.