Precious metals and miners need a catalyst to find a sustainable bottom, and I just don’t see that right now. To catch a bid, there needs to be a psychological shift from risk-on to risk-off. That will take either the US economy rolling over in 2019 or a convincing attempt to impeach Trump. These are the most logical triggers, but there is always the potential black swan event.

Consumer Sentiment:

Until there is a noticeable shift in consumer sentiment gold will struggle. Below are some highlights from Friday’s consumer sentiment report.

Preliminary consumer sentiment for September rose to 100.8 from 96.2 in August. The second highest level since 2004-only behind the March 2018 reading of 101.4. Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead. Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months.

Other than being concerned about tariffs consumers are optimistic about the economy. Until that begins to change, gold will probably struggle.

I think the entire weekend report can be summed up in the daily chart of gold. The cycle may be rolling over, and at this point, gold would have to close above $1220.70 to preserve it.

GOLD

The price action in gold off the $1167 low has been uninspiring. In 4 weeks prices failed to test the 50-day EMA (currently $1220.84). The current structure is similar to the failed May/June cycle, and we could see prices begin to breakdown next week.

Gold would have to reverse sharply and close above $1220.70 to prevent a failed cycle. Closing below $1189.50 would setup a retest and likely breakdown below $1167. Closing below $1167 would establish a failed cycle and favor a decline to the $1125 level.

US DOLLAR 

Gold needs a decisive breakdown in the dollar below 94.34 to prevent another failed cycle. A rally and subsequent breakout above 95.70 would conceivably send gold back to test $1167.