SD Monday Outlook: Batten down the hatches and assume defensive postures. It’s going to be rough this week…
On Friday we were not feeling good about that big, bearish engulfing candle on the gold daily chart. Last night to open trading, gold and silver came under immediate pressure:
While it looked that silver was holding the line in the sand at $17, early here on Monday morning that line looks to be failing:
Gold was hit worse than silver last night, and for now, gold has lost $1290 and even $1280:
Let’s look at the metals from the perspective of the September 8th intra-day high for the gold price.
First in light of the Dow:
The day gold was putting in that intra-day high of $1362, on the very next Monday, the stock market began to soar. Kind of makes one wonder if all the President’s stock market jawboning is not a subtle way to keep gold in check?
Which is odd, because as every goldbug knows, President Trump is indeed a goldbug, and he understands gold is money. Time will tell if he does the right thing or not, but for now, it has been very painful to watch.
Check out the USD/JPY currency pair:
Same thing. When gold was making that intra-day high on September 8th, USD/JPY was putting in a short-term bottom.
Though to put it into perspective, the yen has given up 600 basis points to the greenback since the intra-day high. But as posed in the chart, what has changed? Nothing in Japan has fundamentally changed. Abe is still the man, the BOJ is still buying up everything in sight including Kobe Steel bonds, and in the United States, all we get is all talk and no action.
Look at what is going on with “fear”:
If gold and silver benefit from the fear in the market, it sure does stand to reason that selling VIX and therefore crushing volatility, when used in combination with buying index futures, bidding up USD/JPY, and jawboning to no end, gold and silver would be in check.
Throw in some parabolic bitcoin which everybody is quick to say is “not a bubble” and saying there is no love in the precious metals right now is an understatement. There is absolute hatred and devastating negative sentiment.
Job well done cartel.
Copper looks to be putting in a “cup & handle” formation on the daily:
This is bullish for the base metal, and it should help to act as supporting a floor for silver.
Crude is the big unknown right now:
If the crude oil price is going to keep on rising, gold and silver would have to rise in price based on simple mathematics related to “all in sustaining costs”.
Yield on the 10-year looks to be testing the 2.4% level yet again:
There it is again on the 10-year. That predominate bottom when gold was putting in a 52-week high.
Again, here is why that $1360 level is so darn important for the cartel. Zooming out over the long-term, it is clear the market manipulators want to put off a monthly close above $1360:
They know it’s coming, and on increasing volume. Once we put in that higher-high, since we are talking about the long-term, we could see institutional investors coming into gold in a big way. In other words, there would be no denying the bull market on the monthly at that point.
For now, however, we just have to get through this week.
The Fed does not need to jawbone this week like it has been. Only Kashkari is speaking on Thursday. Nonetheless, there are plenty of smashing opportunities with data release all week, culminating with the release of Q3 GDP on Friday.
Atlanta Fed says 2.7 for now:
But New York is not so rosy this time:
Granted, there will be updates to both before the GDP
lie number is told released on Friday.
Nonetheless, batten down the hatches. It could be ugly early on this week, and then again on Friday.
All things considered, especially the stock market, USD/JPY, the 10-year yield, the rise of crypto, and all the talk with no action, gold and silver could be in a much worse position than they are right now.