Over in the gold patch, things went from disinterested and downright antagonistic (A Notable Lack of Interest in Gold) to sleepy (Gold “Community” Crickets) to ferociously over bullish.
Any long-time and right-minded gold bug will tell you that the latter condition is usually a signal to prepare for some turbulence. Wednesday and Thursday brought the turbulence in the form of a reversal and pullback for gold, silver and the miners.
Since we became constructive on the gold sector in Q4 2018 (per the links above and especially NFTRH reports/updates) the groundswell of gold boosting (pom poms and all) has steadily risen since it became obvious that something bullish was going on in January. And it appears that last week’s breakout from various daily chart bull flags in gold, silver and the miners finally jerked ’em all in. Enter the Thursday pullback.
In the very few days immediately before that $20/oz. pullback the gold “community” threw itself a gathering of the bullish clans. On just a quick look around the gold websites, some quotes popped out from 2 days before the pullback and one day before Wednesday’s reversal. It’s crickets no more… Continue reading "Gold Bullhorns Quieted For A Day, At Least"
I reserve most of the work on precious metals for NFTRH weekly reports and in-week updates because it is done on a consistent basis, with the work done previously key to the narrative making sense in real time and going forward. In other words, in order to not be out there stabbing in the dark, you need to have an ongoing, adjustable plan that makes sense at all times with the macro markets around it.
So that said, let’s take a snapshot of where things stand currently with the understanding that this work will need future updates, which will probably not be made publicly. It is up to the reader to do the work required to put context to the picture. Meanwhile, this will free up more space in next week’s NFTRH 538 to focus on some quality miner charts, which sometimes take a back seat to the macro/sector stuff.
Precious Metals Update
First off, Commitments of Traders data are only available through 12.31.18 as a result of the government shutdown. So we are flying somewhat blind from that perspective. At the end of December, the CoT for gold and silver were well on their way to a bearish alignment. Have they maxed their trends and reversed in the meantime? It is quite possible, especially since the metals have taken pullbacks (within their intermediate uptrends) recently.
We have been following an analog to 2001, which saw SPX break down below its 50 & 200 day moving averages as HUI began its bull market. What’s more, SPX then tested its breakdown in Q1 2001… Continue reading "A Precious Metals Update"
Silver surprised us with a strong Santa Claus Rally. It woke up like an ancient volcano and with a booming eruption. Before that, we proclaimed silver to be dormant compared to a vigorous rival, gold.
Everything changed at the end of 2018 as gold gained 10% from the lows and a weak silver tried to catch up to make the same profit at the very end. Bargain hunters couldn’t pass by this clear market distortion and took their chance to book a nice profit of around 4%.
In my earlier post I updated the medium term gold chart for you. Last time I updated the big chart of silver in October, which was titled dramatically “Fly Or Die” as submissive behavior of silver was leaving less and less hope for investors.
This time I am going to update the silver chart, but using a different approach. You are already familiar with it as I used historical clones with gold and silver before. The latter one was successful. This time it will be extended as I will use two clones instead of one from different historical periods so you can choose.
Let’s start with the distant one.
Chart 1. Silver Futures Monthly: Echo Of the 80s
Chart courtesy of tradingview.com
This chart was built in a high resolution, and I recommend you to click on it to open in a new window to see a larger image in details, especially in the right clone (orange box). Continue reading "Silver Update: 1980s Vs. The 2010s"
I was going to look around to see if I could find a media article out there (complete with a TA trying to sound really important) that would be appropriate to be made fun of in our little Men Who Stare at Charts series. But then I decided to create my own chart, stare at it a little, post it and talk about it (hopefully not too self-importantly).
Introducing an all too busy long-term (monthly) view of the Gold/Silver ratio, along with some key nominal markets.
The Continuum in the lower panel symbolizes the deflationary backbone that has been in place for decades. I maintain that this is a firm marker against which the Fed inflates money supplies, manipulates bonds and by extension manipulates inflation signals. We have been on a theme that like Jerome Powell or hate him, he knows exactly what he is doing because to do otherwise (promote ongoing bubbles on top of bubbles) would, in essence, end the Fed’s racket, as symbolized by a real breakout in long-term yields. Continue reading "The Men Who Stare At Charts"
Here we are on the final track of the year, and investors hope for the traditional Santa Claus rally in the precious metals sector. This euphoria of the anticipated strength based on the current move up could be spoiled if this pattern would emerge in the US dollar index (DXY).
Chart 1. US Dollar Index Daily: Triangle
Chart courtesy of tradingview.com
The disappointing data of US non-farm payrolls released last Friday couldn’t damage the US dollar as it kept above the former trough established on the 4th of December at 96.30. The first reaction in the market was a USD sell-off against all major currencies, but it was short-lived, and none of the former extremes were breached. This made me focus on the Dollar Index chart to see if there is some pattern or trading setup has been shaping amid this unusual market behavior. Continue reading "Gold & Silver: US Dollar Could Spoil Santa Claus Rally"