Tuesday, May 24, 2016

Gold tumbles $22 on possible June rate hike

. (24 May 2016) The price of gold tumbled today as investors considered the possibility of an early Fed rate hike in June following strong housing data.  Higher interest rates boost the US Dollar and thereby make gold less attractive as an asset.  Higher interest rates are believed to reduce inflationary pressures and this is bad news for gold since it is seen as a hedge against inflation and currency debasement.  Gold fell almost 2% today closing at $1227. 

This sharp decline in gold was in keeping with the basic principles of financial astrology.  Financial astrology holds that assets rise or fall in value according to specific alignments of the planets.  Benefic planets like Venus, Mercury and Jupiter are said to coincide with gains while malefic planets like Saturn, Mars and the Nodes (Rahu and Ketu) tend to correlate with declines. 

I have observed that gold prices tend to vary according to the geometric situation of the planets Venus, Jupiter and the Sun.  When all three of these planets are strong by transit and without affliction from malefic planets, gold will tend to rise in value.  When malefics are more closely aspecting one, two or all three of these key planets, gold tends to struggle.  Saturn also tends to depress prices when it forms close alignments with slowing moving planets such as the Nodes (Rahu/Ketu) and the Outers.  The key natal charts for gold also play a role, of course, but the transits are an important reference point for understanding gold price fluctuations.

Today, Venus (6 Taurus) was closely opposed by Mars (7 Taurus).   The Sun (9 Taurus) had also just recently passed an exact opposition with Mars late last week which had also coincided with a more modest decline. 

Jupiter (19 Leo) forms a close 90 degree square aspect with Saturn (19 Scorpio) this week.  Since both planets move slowly (just a few minutes of arc per day), this 90 degree angle is in place for most of this week.   Therefore, we can see that all three key planetary significators for gold (Sun, Venus, Jupiter) were aligned with malefic planets this week.  This is one very important reason why I predicted a price decline for gold in this week's MVA Investor Newsletter.   With all three planets involved, I suggested a decline was a higher probability outcome at this time.

I have been fairly bearish on gold since March when Jupiter and Rahu (North Lunar Node) aligned with some key planets in the 1919 gold natal horoscope.  While gold has managed to hold above the key $1200 level since that time, it seems more vulnerable to declines going forward as Saturn becomes more dominant in the coming weeks and months.  The next acid test for gold may come next week on June 2nd and 3rd when both Venus and the Sun oppose Saturn and square Jupiter.  The Jupiter influence makes this a more complex alignment with less certain outcomes.  However, the presence of Saturn would seem to be quite bearish. 

Weekly Market Forecast

After being mostly flat last week, US stocks have moved somewhat higher in the early week here.  The Dow rose more than 1% today closing at 17,706.  India's Sensex slipped a bit last week but seems to have found its footing thus far this week closing modestly higher at 25,305 in the Tuesday session.  In last week's market forecast, I thought that further gains were unlikely last week as the late week Sun-Mars opposition was likely to coincide with declines.  This was more or less the case as stocks fell after rising in the early going. 

The rest of this week looks somewhat less positive.  In particular, Friday's Moon-Saturn aspect could coincide with some pessimism which may undermine any preceding gains.  While a mixed week is possible, the Saturn-Jupiter square aspect argues for caution and prudence.

For more details and analysis on market trends for this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter includes discussion of US and Indian stock markets, as well as gold, oil and major currencies.