GDP falls off cliff, maybe rate cuts are on the table again

After months of echo chamber communication from the FED and RBA that economic strength is robust and the share markets are strong, yesterday we finally got to see behind the curtain regarding GDP data.

And they missed estimates by a mile.

With the FED anticipating a healthy drop from 3.6% to 2.2%… which was already a shock – yesterday they published results of 1.6% GDP growth. 

What does this mean?

To see such a sharp decline in GDP within a short time suggests that liquidity has completely dried up. Looking at share markets from a macro perspective, they are over bought and looking to lean into their 200MDA in the coming months. Mortgage stress has hit new all time highs for Aussies and cost of living stress continues to stop the next generation from being able to purchase a home (Data just released that a young family looking to purchase an average home would need an annual income of 200K+ to service their loan, for individuals this reduces to 164K – 1.5 times the average wage in Australia)

So if markets continue to react to FED data in a logical way, we’d anticipate seeing continued declines in risk on assets into the near future. 

And what about gold and silver? They are comfortably performing well, especially as people move out of share markets and into a non-correlated risk-off asset.

Enjoy today’s charts and forecast. 

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA

ASX200, with 200MDA

Gold Futures Technical Analysis

Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis a STRONG BUY signal.

Technical indicators – Monthly Projections

 Summary for Monthly Forecast: Strong Buy

*Not financial advice, please do your own research prior to any investment decisions you make.