| Here's the weekly scorecard: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 29-Jul-16 | Price | Change | % Change |
| Gold, $/oz | 1,349.00 | 16.70 | 1.3 |
| Silver, $/oz | 20.31 | 0.15 | 0.8 |
| Gold/Silver Ratio | 66.414 | 0.817 | 1.2 |
| Silver/Gold Ratio | 0.0151 | 0.0001 | 0.7 |
| Platinum | 1,150.30 | 14.70 | 1.3 |
| Palladium | 708.05 | 10.70 | 1.5 |
| S&P 500 | 2,173.60 | 3.54 | 0.2 |
| Dow | 18,432.24 | -24.11 | -0.1 |
| Dow in GOLD $s | 282.45 | -3.89 | -1.4 |
| Dow in GOLD oz | 13.66 | -0.19 | -1.4 |
| Dow in SILVER oz | 907.46 | -8.04 | -0.9 |
| US Dollar Index | 95.49 | -1.24 | -1.3 |
Great week for metals, not so good for stocks. Gold keeps rising & getting overboughter in the teeth of sky-high CoTs. Stocks are sputtering. Platinum gained 6%! Palladium 3.4%. US dollar index tanked today
US GDP numbers appeared at less than half what economists expected (1.2% vs. 2.6%), & the Bank of Japan announced puny stimulus measures, contrary to what everyone expected. It was a toxic cocktail for the US dollar index. It skidded 124 basis points (1.28%). See http://schrts.co/OkJ5UT
The dollar spent part of June and all of July building a rising flat topped triangle, broke out to the upside and promised to rise, rise, rise. Then on the FOMC's news Wednesday that it's not about to raise interest rates, the dollar index sagged. Today's news was a bullet in the head, sending it slicing through its 200, 20, and even 50 DMA far below. In fact, the dollar index has returned to the 95.50 support level we know so well.
It's the green mile: dollar is a dead man walking -- for a while.
Well, shut my nat'ral born durn Tennessee fool mouth! The euro actually rose. Lo, http://schrts.co/OkJ5UT
This is the sort of bogus action that SCREAMS "Nice Government Men! What do I mean? The Euro fell out of it trading range when Brexit hit in June. Formed an even-sided triangle, which nature predicts would break DOWN. Broke down. Then, in three magic-filled days, the euro nixes all that, shoots up through its 20,, 200, & 50 DMAs. Sure.
Well, if 'tis nature, it means the euro is way stronger than anyone suspected, & all those toiled-paper stuffed European banks aren't really stuffed with toilet paper, & the European economy is fine, & Brexit won't hurt Europe way more than the UK. Thus far nature.
But suspicion of the NGM says they engineered the (same but upside-down) fall in the dollar for terrorized, toenail-biting fear that the euro would sink suddenly to its natural level, i.e., zero.
For me, it's no problem understanding. Central banking criminals meet every month at the Bank for International Settlements in Geneva for supper together. Do they talk about the rubber chicken? Or do they discuss who needs what exchange rate? Wow, let me pull off my socks & add that up on fingers & toes.
Wait! I am plumb forgetful. Did I mention all those European banks failing their stress tests today? Or that Deutsche Bank was among the 12 weakest? What was I thinking about.
Upon Japanese PM Abe's re-election, speculators expected Big inflation out of the BoJ. Today the BoJ double crossed 'em. Those scrambling to flee left behind a lot of skin. See? http://schrts.co/UuqBFa
Here's another one of those Nature/NGM arguments. Yen fell out of a rising wedge in May, but instead of following through to the earth's core, rose again, to much higher highs. Sure, part of that rally may be credited to scared money fleeing Europe or China, but today the yen rose thanks solely to the BoJ announcing anemic inflation moves.
INFLATION MARKETS. Last fall I began expecting an end to the commodity price deflation in force since 2008. Sure enough, oil, copper, & the CRB rallied.
Oil rallied from a February low, peaked in June, & yesterday hit its 200 DMA, a likely candidate for a downward correction to the Feb-June rise. Must not drop much lower, though. Chart is here, http://schrts.co/ggTMQ5
Copper bottomed in January and has traded sideways but higher. Now stands above its 200 DMA. View at http://schrts.co/XadyaG
CRB commodity index double bottomed in January and February and rallied smartly to June. Broke down from its upward channel in July, & hath now reached its 200 DMA. Turnaround time? Chart's here, http://schrts.co/XadyaG
What signifieth all this? If commodities prices keep rallying, it won't be because the global overcapacity spawned by a 20 year central bank inflation has been worked off. Rather, it ominously foretells that the way the central bankers will choose out of the deflation is heavy monetary inflation. Gold & silver are also mumbling that.
The Gold/Bank Stock Index spread charts the flow of confidence into financial and monetary markets (when it moves down) or into gold (when it moves up). It broke out of its old channel upside in January & soared. Settled back to trade in a downtrending channel. Then it behaved as almost all break-out markets do, it came back to the breakout point for a kiss good-bye and shot up again ot a June (Brexit) peak.
Yes, it traded back down, but only to the top of that channel, for another kiss good-bye.. In the last three days, having revisited the channel line and its 50 DMA, the GOLD/BKX has turned up again. Y'all stifle the tears: banks have a hard whippin' comin'.
As yesterday, today stock indices gainsaid each other. S&P500 rose 3.54 (0.16) to 2,173.60 but the Dow Industrials fell 24.11 (0.13%) to 18,432.24.
I don't really care that stock indices are rising in paper terms, because that answers no questions, butters no bread, boils no turnips, broils no pork chops. Don't tell you a durned thing. So I measure stocks in gold and silver.
Dow in gold peaked in December & tanked into February. Y'all go look, http://schrts.co/oEJUUv Make sure I'm not making this up.
Dow in gold rallied correctively from that 12.558 oz low, then traced out a megaphone reversal. Broke down from that on Brexit, but in the sharp post-Brexit stock rally corrected again. It has now reversed that correction and fallen through its 20 & 50 DMAs, turning decisively down. By the way, only one peak of that rally came near touching the 200 DMA. Weak as hash-house soup, & indicators shout it will fall further.
Dow in silver, ahhh, look, http://schrts.co/yNRvIo
Dow in silver also shows a December high, but has been weaker than the DiG. In June it fell slap through support from the previous two lows, and made a new low at 889 oz. It rallied timidly to 948 oz, then the rally failed and it has since cut again through its 20 DMA. Both these indicators shout that stocks toped against metals in December, & have resumed their primary trend. That trend will take stocks to one to two ounces of gold and sixteen to thirty-two ounces of silver, before it ends.
Both silver and gold prices proved Wednesday's breakouts genuine. Today Comex gold rose $16.70 (1.25%) to $1,349.00. Silver added 15.2 (0.75%) to 2031.2
Behold, the beautiful gold chart, http://schrts.co/Eyyuq1
Y'all forgive me, I promise I'm not just being pig-headed. Rather, I am looking at a gold chart that screams to me, "Higher!" Higher price for three days have confirmed a bullish breakout from the bullish flag. Volume is rising, slightly but rising. MACD is turning up, as is ROC. Today it closed above the former upper channel boundary. "HIGHER!" It's aiming at $1,450.
Now look at silver, http://schrts.co/Eyyuq1
Three days it has closed higher out of that pennant formation, three days and above its 20 DMA. It has worked off the RSI overboughtness that prevailed through July's first half. Volume has jumped with price. MACD is turning up.
And physical gold & silver buyers have dried up. That's not only typical of summer, but also typical of early rises in a new trend. Buyers don't believe the new prices yet, so wait and wait for corrections, but the corrections never come. Finally they panic and buy at higher prices. Odd, people love to buy a rising market. Human nature.
I reckon silver will hit 2300 - 2400¢ before a real correction bites.
I've said too much already, so I'm not going to point y'all to the gold & silver weekly & monthly charts that show clear, confirmed breakouts. Just assume I did.
Y'all enjoy your weekend.
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
© 2016, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.
WARNING AND DISCLAIMER. Be advised and warned:
Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.
NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.
NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.
NOR do I recommend buying gold and silver on margin or with debt.
What DO I recommend? Physical gold and silver coins and bars in your own hands.
One final warning: NEVER insert a 747 Jumbo Jet up your nose.
