And the metals are wearing jet-packs

 

 

An SD Exclusive

Aside from the steady stream of both hard and soft data this week, we can start with a calendar of events, and see if something immediately stands out:

 

 

 

In what my otherwise seem like an inconsequential week from the Fed, we might say “not so fast”. Just in case there is any good old-fashioned jawboning needed, we round out the week with dual Fed speeches on Monday and Friday. Indeed, a juggler can only keep the balls in the air for so long. Sooner or later, even if a mistake is never made, muscle energy will deplete and all those balls will come falling to the floor.

There is a major problem. These aren’t ordinary juggling balls, they are real estate, stock market, and bond market swords lit on fire, and our central bank performer is standing on a rolling balancing board of Jobs data which is more unstable by the day, even over the weekend, and even after the vitamin boost given last Friday in the form of Nonfarm Payrolls.

In other fundamental news we reported on the surge in Q2 physical bar and coin demand coming from the East, and the Europeans quietly “adding” to their paper gold ETF stack, and now several reports this week will give us a glimpse of how things are faring throughout the globe. As we progress through the week, we will be keeping an eye out for:

  • German Industrial Production
  • Chinese Import/Export Data and Balance of Trade Report
  • Canadian and UK Real Estate Reports
  • Russian Central Bank Reserves Report
  • French, German, Italian, and Spanish Consumer Price Index (CPI) Reports

All those data points will give us a look at manufacturing, trade, real estate, central bank activity, and inflation across Europe.

Silver is in a pickle. It is sweet-n-sour, and we’re about to find out how it tastes. The white metal is smack dab in the middle of the 50-day moving average, and the support line which just a couple of weeks ago was stubbornly holding as staunch resistance. For price action in silver, we really want silver to climb back up and get above the 50-day. We also want that moving average to turn up. If silver moves down towards the support line at around $16, we should be rooting for a tap and then decisive rebound off of it. Recall that silver has not been riding either of the bullish wedge support or resistance lines for any period, but as we reported last week on decreasing mine supply, silver miners getting crushed, and increased industrial demand, things really are in our favor for a rally out of the summer and into the fall.

 

 

 

Gold is weathering the storm better than silver has been. Gold is solidly above its 50-day moving average, and the yellow metal can run as indicators are not flashing “overbought”, and in fact the relative strength has come down to a mid-range that gives gold some much needed slack to the upside.

 

 

 

Crude oil (WTI) may indeed be the catalyst needed for higher gold and silver prices. Everybody is stuck looking at the stock market, cryptos, the bond market and a US dollar crisis as the black swan to thrust the metals higher, but it might helps at times to zoom out and look at the big picture.

 

 

 

That’s a ten-year monthly on black gold. It is very important to notice that over time, as while everybody is focused on OPEC, competitive fracking at $50, and N. Korean commodities sanctions, crude has been carving out a bottom and now, there are two higher-lows and one higher-high formed on the monthly. If crude closes August or September with a second higher-high, from a long term perspective, many people will acknowledge that the slow flowing chart changed directions and thus crude is moving higher. A cyclical turn and crude bull market confirmation would be the black swan that really comes from the blindside. The silver miners are back to losing money again, as evidenced in the brutal performance of last week. This week we get earnings from several other miners, so we will see if in fact the losses are contained to just a couple miners with mines in Mexico, or if the losses are more widespread. Higher oil costs and worsening miner performance would force metal prices up just on their own, so while crude will probably be choppy as it has been of late, let’s just see how the month closes for a better indicator.

The US dollar is a whole lot of dud. In what was received by the MSM as a stellar jobs report, notice that the dollar faded the move on the 3 minute chart. For reference, not the precious metals smashing right at the release of the report. This is exactly why all those Fed speeches are crucial this week for the “markets”. If needed to talk the dollar up, or down, we will get an indication as early as a one-two punch today.

 

 

We highlighted the Maestro’s dire warning on the bond market, so we won’t pull up the chart, and that leaves us with this one chart, which speaks for itself.

 

    • Bitcoin is doing what the metals should be doing. Amazing how people trust bitcoin over the metals. I think its because there are no leverages, ETF’s on bitcoin. The bankers can’t manipulate it yet. I’m surprised they haven’t tried to regulate it yet.

    • Isn’t true price discovery a beautiful thing to behold? I took the plunge into the crypto space back in April and doubled my money in a little less than 30 days. I didn’t bet the farm, I just put in an amount I would be totally OK with losing. So far it has worked out beautifully.

      Two friends of mine went heavily into the crypto space back in 2013. They asked me to get in with them but I stubbornly stuck with silver. To say I regret that decision would be an understatement. That’s not to say that I don’t like silver as an asset for diversity outside of the banking system. But I just wish I would have been more willing to listen to alternatives. At the time I had tunnel vision for silver.

      As a sound money advocate I believe the cryptos are here to stay. Certainly not all of them as there are clearly a lot of pump and dump “coins” being introduced every other day. But the top tier cryptos will be left standing after the smoke clears. It would not surprise me at all if Bitcoin is trading at $5K by the end of this year.

       

       

       

       

  1. It can’t be regulated. They have tried every day for a year… haha. See you at $500,000.00

    As crazy as it sounds ( and I know it sounds REALLY crazy) , you only need to own 1. If it doubles every 4 months from here – you are well over a million in 2021

    • Of course it can be regulated, taxed or whatever a government wants to do with it. It could even be outlawed if they really wanted to. I think the crypto people are getting way to cocky.

    • “It could be made illegal with the stroke of a pen.”

       

      Yes, it could be and it WILL be the moment the US Gov / Fed perceive it as a direct threat to the current system.  Those of us who pay attention to history know that this is what governments do.  They hoard power and anything that comes along to upset their hoarding is stomped on until it is no longer a threat.  They will call crypto-currencies a threat to the well being of the people, a way that terrorists, hackers, and other Ne’erdowells to harm others, or some such rubbish and will then do everything necessary to destroy them.  If not that, they they will take over the cryptos and run that game for themselves.   They want a digital currency anyway and grabbing one that is already established should be easier than creating their own.

       

    • When the power to be want to, they will just treat “Bitcion” as if it was a Paedophile, they will set up a task force, buy “Bitcoin” and track it through the net, I.P address’s, envelopes, what ever, if you think they can’t track it, fool you, then they will come knocking at you door or work, what ever.

      If you have made good coin on “Bitcoin”, good on you! but let’s not forget it is a gambling house, funny when people are making money how they start to brag and doll out the investment advise, like their some sort of financial guru, just like all the stock, Bond and Flippers.

      OOH, wait for the avalanche of bitchy reply’s.

    • Actually they have not attempted to regulate cryptos. If you have been reading the press releases and the articles by officials of the IMF and the G-20 they are pushing central banks to use the block chain technology and create their own cryptos and then go totally cashless. When a country implements this the banks will then exchange their old deposit base for the new and then make the private cryptos illegal to use as a medium of exchange. You are delusional if you think governments are going to allow competition with their own currency. They need to control the monetary base to increase or decrease the money supply as needed and currently the cryptos space is too small to be a threat. As former HUD secretary Catherine Austin Fitts stated governments are currently allowing these to exist so people can become familiar with the new technology and then they will pull the plug. so trade while you can and beware of changes coming. Going cashless allows governments to increase tax revenue, track all transactions and monitor your purchasing habits which they will end up selling to the tech firms to then target ads specifically to each consumer. The SEC has already fired the first shot across the bow by stating that all ICOs fall under the securities act of 1933 and 34. If you have ever read the acts they are all encompassing and virtually everything falls under these and the burden of proof for an exemption falls on the issuer. If you raise CAPITAL from the PUBLIC and the instrument sold can INCREASE or DECREASE in value, it falls under the acts.

       

       

    • With all due respect, I think most are missing the larger picture. The society is in the process of redefining what the understanding of value is. The value of Bitcoin (specifically BTC. the 800 lb gorilla) is in the code. It is a brilliant piece of work. It is backed by the code which is immuteable without majority consensus. It cannot be regulated by the SEC as it is not based in America. The ETF’s will fail after the first plunge from $10,000 down to $5000 in a week. People will be screaming bloody murder to sell as their retirement funds just got shredded in half. Then it will pop back up to $15k. $20k. It is too unstable for an ETF application. It cannot be naked shorted.

      On top of that – No one, and I mean no one (numerically speaking,) has bought any yet. The “beginning of Bitcoin”, will be around $10,000 or $15,000. Next Spring. That will be the start of the exponential rise.

      Bitcoin is just a program that runs on the internet. It has no offices, no presidents, no one is in charge. It will end up eating every fiat dollar in existence. No one will buy the Fed’s “Fed Coin”. Which can be minted by them at will. Why should they? They can buy bitcoin. And there is no way to stop it. Ever. See you at a million.

      PS – the good news is that for $3500 today – you can ensure your family’s future in perpetuity.  Just buy and hold. There will be volatility, great volatility, but you can’t scare silver stackers with volatility…

    • BTW – the toughest part of this journey for me was learning how to hold my own bitcoins physically. The definition of physical holding in the BTC world is that YOU, the owner of that Bitcoin, are in posession of your own private keys. Not an exchange, or any 3rd party. Just you alone. Additionally for paper wallets – learning how to generate your own address and keys offline – yourself. You do this. No one else. Your personally generated encrypted keys have never been on line. That was the hardest part for me. Of course a hardware wallet will work fine, but paper has also lasted 5000 years. And you can’t hack a printed sheet of paper.

  2. if you want to understand cryptos look up Greshams law.

    just when you thought it couldn’t get much cheaper, o vey, the moneychangers are at it again.

    now not only irredeamable, but also unbacked by debt!! Enjoy your freedom. Free floating, now spacing out…

    the monetrary abduction, yay

  3. Did this site just morph into Bitcoin Doctors when I was off-line?  WTF?  Enough of this crapto-currency stuff.  Surely there are web sites where those so inclined can hang out and yap interminably about block chains and all that sort of stuff with others who actually care about them?

     

  4. Comparing bit coin to PM’s is ludicrous, two totally different investments. Its amazing that the crypto lovers seem to have forgotten is that all it takes is something as simple as a power outage and your wealth is gone. Guess who has the power switch to the internet?

  5. Here’s the value of bitcoin:  zero.  It’s not a transactional currency, it’s a speculative digital investment, based on the greater fool theory.

    Here’s the value of silver and gold:  whatever they cost in currency terms to produce.

    Here’s the value of real estate and stocks:  wherever the central banks want them to be.

  6. Bitcoin is fiat based, and history proves that every form of currency that went away from real money. Silver and gold, it’s value eventually went to zero. Again it is paper based. Those that have it and realized returns….Good for you, but I think it is important to realize when your ahead. Greed can take over and it could be extremely costly.

Leave a Reply