There is an old wives' tail that says full moons can be important turning points for the gold price. Make it a full lunar eclipse and it's even better, full lunar eclipse 'beaver blood moon' and voila, gold spikes more than 2% in barely more than 90 minutes.
Gold (15-Minute)
A lot of keyboard strokes will be expended in an attempt to 'explain' yesterday's surge in precious metals and mining stocks. I'm neither a believer, nor a disbeliever in the full moon theory. I've seen it happen plenty of times, and I've also seen plenty of full moons without anything notable occurring in the markets. I will say that the energy has felt especially intense this week with a hurricane suddenly forming off the east coast of Florida in November. A rare event to say the least.
We also had midterm elections in the US and a full blown crypto market meltdown. Change is in the air and we are finding out who has been swimming naked all this time. Cryptocurrency will always have a place in the world, however, the sector is experiencing a badly needed cleansing process. The rebuilding process will come next (shades of early 2019 for the crypto sector).
There could be many potential explanations for why traders decided to buy more than $10 billion worth of gold futures contracts in less than one hour yesterday. I don't think the US midterm elections had anything to do with it; gold is still trading around $1715 this morning despite it becoming increasingly likely that the Democrats will still hold the Senate. However, I do believe the crypto ponzi meltdown at FTX probably motivated some larger money to increase their gold holdings. It could also be that some larger short positions in the gold market didn't like the prospect of staying short into Thursday's CPI report and schedule of six Fed speakers.
Whatever motivated yesterday's rally matters less than the fact that gold is on the brink of completing a rare triple-bottom reversal pattern:
Gold (Daily)
I sharpened my pencil and decided that a weekly close above $1738 would be nirvana for gold bulls.
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