War Trade Pushes Gold Back Over $1400
Last week we were assured by U.S. Secretary of State John Kerry that the U.S. would definitely be going to war with Syria over the alleged use of chemical weapons by the Assad Government.Â That pushed gold above the June high at $1423 briefly before cooler heads — and the doves in the U.K. House of Commons — prevailed.Â As of Sunday evening the U.S. had backed off on its stance about going to war somewhat with President Obama asking for a Congressional vote on the matter, the first one since Harry Truman, frankly.Â This waffling had pulled gold and silver back from their spike highs as August ended with a whimper, tempering the enthusiasm of momentum players for a few days.
But, Monday is a new week and now that Speaker of the House John Boehner (R-OH) has inveighed on the subject alongside Obama’s war-mongering we are back on course for the start of what can only be described as World War III.Â This took Gold ($1417), Silver ($24.41) and Brent Crude ($115.80) back up near last week’s highs and is setting the market up for a risk-off trade in the lead up to the G-20 meeting in St. Petersburg.
At this point there is enough short-fuel underneath the precious metals that any formalized attack on Syria will likely take gold back above $1500 in short order.Â Silver, Oil and the energy complex will all follow along, especially since we are entering the bullish season for all of these commodities.
With all of these markets putting in strong technical breakouts on their weekly charts in August, the talk of an attack on Syria is actually creating a bit of a perfect storm right now.Â Watch for a weekly close above $120 on the Brent Crude chart.Â That, in my opinion, is the pivot point.