Assuming the short-squeeze bounce in the broad averages and FAANGs is about to get legs — a possibility I’ve raised in today’s The Morning Line — bullion will be under pressure. The institutional chimpanzees who build and dismantle portfolios can only follow simple instructions that have a single theme. One such theme unfortunately is that when one is buying stocks, one is necessarily selling bullion. Adding to my newfound caution in gold (and silver) is that today’s rally hit a Hidden Pivot target at 1515.60 that has been two months in coming. The slight overshoot is ostensibly bullish and would become still moreso if gold closes above today’s high (1522.70) for the next two days. In any event, we’ll see what surprises crop up before we draw any strong conclusions. _______ UPDATE (Aug 8, 10:34 p.m.): Gold held its own today with stocks on a mini-rampage. This seems bullish, but let’s see how things play out ahead of the weekend. _______ UPDATE (Aug 11): Gold got little boost when the Dow was trading almost 300 points lower on Friday, so we should be prepared for bullion to turn weak if the broad averages reverse and rally. First, let’s see how things open Sunday evening.
