Bank of America credit card spending data shows that retail sales (ex-auto) will show a .6% month-over-month decline when they are reported next Thursday morning:
While this does not guarantee a recession is here, when considered in the aggregate with other economic data received in recent weeks it offers perhaps the strongest signal yet that a recession is imminent. US employers are readying an avalanche of job layoffs to be announced early in the new year and we've already begun to see open job postings evaporate across various sectors of the US economy.
The US Treasury Yield Curve is the most deeply inverted it has been since the early 1980s when the US economic was in a deep recession:
Furthermore, real UST yields have declined nearly 50bps in less than two weeks - it seems that some market participants are finally seeing signs that the US consumer is tapped out and the inventory glut we have been hearing about is leading to disinflationary pressures in durable goods.
All of this points to a sweet spot in the cycle for the precious metal and timeless store of value that we call gold. Real yields have likely peaked, the Fed has reached peak hawkishness in terms of rhetoric as evidenced by Powell's latest speech, and Russia could play a powerful anti-US dollar move by creating some sort of peg between Russian oil and gold.
Gold is consolidating near $1800 after a more than 10% rally in less than a month:
Gold (Daily)
Gold faces a BIG week ahead that includes PPI Friday morning, CPI Tuesday morning, FOMC announcement Wednesday afternoon, and quadruple options-expiration next Friday. There is important near term support near $1780 followed by a much bigger level down at $1745. Meanwhile, a breakout above $1825 could send gold soaring towards the next major resistance on the weekly timeframe near $1880. Seasonal tailwinds and a shift in investment flows in recent weeks add some additional weight to the bullish thesis for gold into year end.
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