September 2, 2024 - (Gold Market Wire) - Gold sold off on Friday, with COT having played its short-term games and the smart money staying away. As we opined in our last missive, the weekly chart pointed to the threshold to get some follw through. For ease of review, we repeat that chart here:

Silly Season saw two highs, one at 2531 and another at 2529. Unsurprisingly, we didn't follow through...and we didn't hold the 2509 level for the end of week. Not much conviction in the rally was the theme. Just the usual August ramp to try and trap poorly placed length. With World War III on the horizon, shouldn't we have been screaming higher?

Our channel, on the Daily Chart shows the current set-up.

Right now the main focus is for the Fed meeting on September 17-18. The market has baked in a .25% rate cut. If we wind up with unchanged - expect equities to sell off sharply. Even the expected .25% cut may not do the trick. The market wants its big shot of monetary stimulus, and can't wait much longer. September and October are 'summer hangover' season, and medication is needed. We can just see equities selling off in anticipation - as if to threaten the Fed that the market wants "MOAR!'... and demanding a .50% cut. And just to make matters even more critical - the cut, if and when it comes - had better work. If equities don't get the expected traction from any proffered rate cut - we are in big trouble.

Still, you say, a nice big rate cut could help Gold, no? Ultimately yes, but as we have warned so often, if we get a crack in equities, everything is going to get sold with it. Recessionary winds are blowing through the economy, and the stock market looks pricey. Don't expect Gold to simply sail through the storm without taking a few hits. And needless to say, the Western, nay Global, political picture is starting to take on Edvard Munch proportions.

Prepare accordingly.