SD Midweek Update: To any Goldbugs out there thinking that China is somehow coming to our rescue, here’s some bad news…
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“If you can’t beat ’em, join ’em!”
That’s what they say.
Because, perhaps, the sad reality is that in the end, everybody loves Big Brother?
Not even Winston could resist.
The more I think about gold, the gold “market”, and China, the more I think that China has realized that they simply can’t defeat the United States.
At least, not right now.
People often talk about some sort of struggle between good and evil playing out behind the scenes, but I don’t think that analogy works in the case of the Western paper gold & silver markets.
A better analogy would be that the United States and China are two rival gangs, mobsters if you will, and both are not just looking to solidify the power that they already have, they are looking to expand their power.
At times, this competition plays-out in plain sight.
Look to August of 2015 as an example of this.
At various times during the month, China was testing out its economic warfare skills in the form of currency devaluation and a US stock market intervention.
More importantly, also in August of 2015, the United States, for whatever reason that’s above my pay grade, proved its military power by reaching out and touching China with a little help from the “Rod of God”, which resulted in this (from Time):
They say it was a “chemical plant explosion”, or, such as in this reference above, it was a “warehouse blast”, which killed only 17 people.
Sure it was!
And sure it did!
Of course, after 70+ years of nuclear weapons research and development, who am I to say that Chinese chemical plant explosions look just like night-time surgical, tactical nuke strikes launched from low-orbiting satellites?
I mean, I could be wrong, because Americans sure are fat, so it must take one heck of a factory to produce all that monosodium glutamate to infuse with our “food”?
But I digress.
Space Force anyone?
There I go again.
The bottom line is that in August of 2015, the United States was showing China that the United States still reigned supreme on the military front, and China was sniping at the United States on the economic front.
Of course, economic attacks are far less devastating than having your city struck by a tactical nuke, so yeah, China yielded.
Fast forward to 2019, some four years later, and what do we see?
In my opinion, China is making the good old-fashioned “if you can’t beat ’em, join ’em” decision, and they’ve done just that:
So yeah, I don’t think China joining forces with the COMEX is a good thing at all.
I think this is one more way to prolong the gold market rigging so that the Deep State Globalists who make up the cartel can hold on to their power.
Could China stab the USA in the back one of these days?
You know, in a “take out the mob boss so I can become mob boss” kind of way?
Yes, that could happen, but, and it’s a big but, only after China has the same Rod of God equivalent capabilities of its own.
Until then, I think the gold market rigging will go on, with newfound efficiency, courtesy of the Chinese.
Which is exactly what the COMEX needs, because if we assume the COMEX has long since scrapped the bottom of the barrel for real physical gold to deliver, then the only real way to prolong the manipulation is to bring in the extremely efficient and now Chinese-run “just-in-time” inventory system.
I mean, has anybody ever ordered anything from China off of eBay?
I have, and I’ve gotta say that I can buy something on eBay which is shipped from China, and I can receive the package faster than I can receive an eBay package shipped from some lazy dude only a few states away.
But I digress.
To those Gold Bugs looking for China to be some sort of savior in the gold or silver markets, I think that is the wrong way of looking at it.
Because if China is run by a Deep State Globalist in Communists’ Clothing, much like I think the United States is run by a Deep State Globalist in Patriots’ Clothing, then the cartel will be able to prolong their grip on the paper gold & silver markets for just a little while longer.
I don’t know.
An insider would know, but that’s the kind of guarded information that a person takes to the grave.
I know that Golden Week is over, and I know we’ve been seeing the volatility I’ve been looking for in gold & silver, but with my newfound thoughts on the gold market, I’m no longer getting a really warm & fuzzy feeling about the rally beginning this week, even though silver looked good overnight and into this morning.
Said differently, I think this brand new dynamic at the COMEX, which begins next week, is just too much of an unknown wildcard right now, and when we look at the charts, we’ll see they’re still looking rather bearish for the short-term.
That is, if the technicals matter.
For example, I’ve been looking for the gold-to-silver ratio to punch above 90:
Gold fell as low as $1493 on Monday afternoon, and silver barely budged as reflected in the gold-to-silver ratio’s slight decline from over 86 to an 84-handle, so it does seem the cartel is more worried about silver right now.
Silver’s daily chart, however, is painted all kinds of bearish:
I have been saying the fundamentals have been driving gold & silver, and I still think they are, but the cartel is doing one heck of a job painting that chart!
If silver is not done falling, we will have put-in a second lower high, en-route to a second lower-low, which could arguably be considered a short-term trend, especially when we consider silver is nowhere near screaming “oversold” right now.
Gold has the same short-term bearish outlook:
Although I am liking the fact that gold could be in a sideways channel, albeit an ugly one, of, say, $1500 to $1550, and if that is the correct call on the technicals, then it seems we’re set to work our way back up to resistance at $1550.
Getting up to $1550 again isn’t what matters right now, however.
Technically speaking, what matters is breaking-through $1550 with authority and getting a closing price north of $1575.
Palladium looks set to put-in a new all-time high:
The metals are and will be going higher.
Fundamentally speaking, nothing has changed.
Real things that have the properties of money, will, sooner or later, provide a check on all of the Frankenstein-debt that’s been pumped into the system.
This explains why the cartel is treating platinum as more of a monetary metal and less of an industrial metal:
Investors naturally look at platinum as a viable option to gold & silver, especially as platinum is more established in the physical bullion market than palladium, and, pertinent to platinum’s recent price-action, the cartel naturally looks at platinum as a volatile little dandy that can surely wreak havoc on investor psychology.
Looking at the price of crude oil, you’d think there was peace and happiness in the Middle East:
A quick skim of the headlines, however, shows quite the opposite and bloody story.
Copper could be showing us an inverse head-n-shoulders pattern:
It’s an ugly one at that, but the upper target would be around $2.75.
The death cross in the Russell 2000 is as clear as day:
The technical picture is not a good sign for stock market bulls, and there’s plenty of room to run to the downside to take-out that sub-19 print on the RSI from back on Christmas Eve, 2018.
I think the VIX is going to start spiking:
A spiking VIX could be the last thing the cartel wants, however, because it would be one signal for investors to make a move into gold & silver, although I’m pretty sure the Chinese aren’t just going to get COMEX “baptism by fire” treatment, but rather, the Chinese have likely, and for a while now, been training behind the scenes for their official entrance into the US gold market.
US Treasuries are not supposed to be this volatile:
I think we take out the lows pretty soon, and I think we could even take out the 2016 lows by the end of the year.
That said, taking-out that low print of 1.336% on July 6th, 2016, assumes the bond market doesn’t first blow-up.
I think the US dollar is getting ready to make a move:
We could get a bull-trap that pushes the dollar above 100, but I think the next major move is down.
What’s the bottom line as we find ourselves here this beautiful Wednesday in early October?
I didn’t even write about the fact that the Fed has admitted it’s printing money again.
Because I think the big news is that China has joined the ranks of the cartel.
I still have not thought-out all of this, so I’m not sure what it all means.
Does it mean that the gold bulls are about to get blindsided?
Or is China’s role to help with the “managed retreat”?
The Chinese are indeed Masters of Efficiency.
Silver hit $18 at 3:25 a.m. EST today.
Is the rally starting as I forecast?
Along with Chinese COMEX?
We are very close now.
To something big.
Fall of Paper?
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.