Gold Bounces : Is it WAR you're looking for?

Trying to make sense out of market moves can be a short path toward getting yourself committed to an insane asylum, but for those of us on the edge of it anyway we like to give it a try. About 10 days ago I pointed out that the Spot Gold Trend Broke Down and I've been looking at the Gold chart to see if it confirms the trend change which I think might be in sync with a change in the fundamentals...

Over the last week or so, the price of Gold has bounced fairly strongly. So the question is being asked - "Is the Correction over and will the Bullish Trend resume?" Personally I am not convinced. In making sense out of the bounce in Gold I look for key events and correlations that might help me make sense out of things.

Some of the fundamentals have definitely changed. Trump was elected early in November and the Gold price immediate started selling off while other RISK ON Markets (like crypto) started rallying hard. Since then we've had the Federal Reserve come out and pour some cold water on future Interest Rate Cuts which has also strengthened the dollar and hurt Gold...and Gold went on to hit a low on November 14th. What has happened since then?

The outgoing Biden Administration controversially approved Ukraine using long range missiles against Russia, who had previously signalled that this was a big "Red Line". Then we've had Ukraine use those US Long Range Missiles (6 days ago) as well as the British Storm Shadow Missles (4 days ago) and then Russia has responded by firing back some Intercontinental Ballistic Missiles for the first time (3 days ago)...and Gold has been rallying through these events.

One of the big drivers of Gold demand historically has been Geopolitical Instability and with Nuclear Powers escalating aggression against each other you'd have to acknowledge that these events could be playing a part in driving the markets. How would we confirm this theory though?

I look at the stock prices of Weapons Manufacturers to get an idea of how more, or less likely war can be. These guys make money when the shit hits the fan so war is good for their business models. So lets take a look at a couple of the big ones....

Here is The Boeing Company. Very similar features to the Gold Chart. A sell off early in the month of November, a low around the 14th and then a recovery rally. Is this showing us a short term correlation with Gold?

Here is Lockheed Martin. Some similarities here too. A big selloff heading into the 14th of November but not hitting a low until a few days later. Then a recovery rally over the last week.

Of course this is not conclusive, but I am seeing enough correlation between these 3 charts to draw a cautious conclusion that the rally in the Gold price may be related to these war escalations that we've seen over the last week. What I know from previous rallies like this is that once things settle back down the more regular monetary fundamentals tend to take over. So I am not getting super bullish again on Gold any time soon unless World War 3 does actually break out in earnest...in which case we've all got bigger problems to worry about than posting on Hive.