SD Midweek: But that’s not to say the cartel won’t try to smash because today all eyes are on the Fed…
We may well have just seen the bottom in gold and silver yesterday:
That is not to say we can’t take another trip down, and the move faded overnight.
Side note: The dollar is up somewhat, but not in a way as to mirror the drop in the metals, especially going in to “everything is awesome” FOMC Day.
The significance of today cannot be understated.
Today is December FOMC day. In 2015, silver bottomed two days before this day, and in 2016, silver bottomed six days after.
In other words, we either saw the bottom yesterday, or we are very near the bottom right now.
If we did not see the bottom yesterday, that’s fine by me. I took in my loose change that I accumulated since this summer and I deposited it in my bank, so if we break-down in silver from here and trade with a $15.5X handle, I’ve I’m gonna pull the trigger on some phyzz again. 2.25 ounces to be exact. Every little bit helps right?
Another sign the bottom may be in already is just how oversold silver is right now:
Twice now in recent days silver broke-down into what many would call “very oversold”. That is a good sign in and of itself. Manipulation aside, it means that everybody who wanted to sell silver, has sold silver. Furthermore, notice the bottom forming on the chart as indicated by the last few days of trading.
The turn is better shown in gold:
Notice how the trading range tightens as it turns and begins the rally.
Just another indication we are close to the bottom in the latest move.
Platinum has fallen for 10 of the last 12 days:
Just a couple of weeks ago we were talking about putting in a close above $953. But for now, we’re dealing with a more than 8% drop in the price of platinum.
Once again, palladium is holding it’s own:
I get it. There could be a bearish wedge forming, but palladium still is above the 50-Day moving average (which is a good sign).
So we have been following the GSR very closely because of the extreme ratio:
The GSR is still signaling that silver is very undervalued in terms of gold right now.
But here’s another way to think about precious metals price suppression and market manipulation and the extreme attention the governments and central banks around the world put on the money of the people.
The average price for a precious metal (gold, palladium, platinum, silver) is $785.
Yet silver has been beaten to a bloody pulp and costs less than $16 right now.
If we take silver out of the calculation, and take the average price of gold, palladium and platinum, we get an average price of $1,040.
It is not an understatement that governments and central bankers fear silver more than anything in the entire world. Anything.
The dollar looks to be putting in a bearish head-n-shoulders pattern:
If the chart pattern holds, then in short order we will be at 91 on the DXY. That is bullish for gold and silver.
Copper is recovering after the pounding it took last week:
But here is yet another reason why there is a floor in gold and silver:
A rising cost for mining forces prices up. Think about it like this: If I had a food truck and sold hamburgers for $7, but over the course of six months my main input cost, the cost of ground beef, shot up from $3.50 per pound to $10 per pound, I could not keep on selling hamburgers for $7. I would have to either raise the price of my hamburgers or just close up shop.
We should not underestimate the importance in the price of oil. Right now it is keeping a floor on the metals.
The yield on the 10-year note should get moving again starting today:
After all, today is game-day for the Fed. All eyes are on the whopping rate hike that would literally only get us to a supposed floating range of 1.25 to 1.5 percent. That is not normal, but Janet Yellen will say it is approaching normal because the “neutral” interest rate is now lower.
That’s the kind of crap we’re going to hear. And the MSM is going to say, “rake hike” as where we are now on interest rates is anywhere meaningful. It’s not, and sooner or later the bond market bubble will pop and we’re going to get Paul Volcker style rate hikes because the runaway inflation will force it.
There is no way for the Fed to “gradually” raise rates.
One of the ways they keep the farce alive is by keeping the fear barometer under 10:
Of course, when you sell VIX, that is a way to capture an audience into thinking everything is fine and the stock market can only rise.
Which on Monday we said would most likely be putting in a new high, which is exactly what it has done:
Notice how it is getting further further away from the 50-day moving average. The move is turning up very aggressively.
But it doesn’t compare to this:
If there is absolutely no mention of gold & silver in public schools, and if the public around the globe has essentially been “dumbed-down” in an effort to keep them in the dark about sound money, it’s pretty easy how the millennials would be confused about “money”, “currency”, and “stores of value”.
Without fail, however, as humans always do, the hard way, they will come back to the ultimate monies: gold & silver.
– Half Dollar