Did President Trump Just Stop The Bleeding In Gold & Silver?

SD Friday Wrap: It looks like the bleeding has stopped in gold & silver thanks to President Trump’s escalation of force. Here’s the details…

We have precedence, just this century, from a Republican President (Bush) on how gold performed during a two year long Trade War with steel front-and-center and subject to tariffs.

Gold performed well over the two years:

Silver did not perform as well as gold, but silver did eventually get moving near the end of the Bush Steel Tariffs:

Which brings us to yesterday and today.

Yesterday there was chatter, and today, President Trump was out with full fury in what can only be interpreted as an escalation of the The Trade Wars:

There are so many fundamental factors at play with President Trump’s escalation of The Trade Wars.

As Tariffs and Trade Wars sink in across the globe and across the markets, here’s a bulleted-list of just a few of the fundamental factors at play:

  • Gold likes geo-political uncertainty
  • Gold likes economic uncertainty
  • The dollar did not perform well under Bush’s tariffs, and gold performs well when the dollar does not
  • The stock market did not perform well under Bush’s tariffs, and gold performs well with market uncertainty

So here’s the $64,000 question:

Did President Trump just stop the bleeding in gold & silver?

Gold & silver turned around yesterday after heavy selling pressure, and have rebounded somewhat today.

We knew gold was going lower for longer:

I argued that gold would spend only a few days below the average because the latest round of beatings have already been extended.

Although we do have to get through next Tuesday, the 9th aniversary (03/06/09 + 9) of the S&P bottoming at 666. We do know the puppet masters like having fun with their numbers.

But just as gold looked like ti was going to lose $1300 and silver was going to lose $16, they turned and showed strength. That’s bullish. Gold us up nearly $20 and silver is up $.36 off the lows.

That’s a good start and it shows that the worst may now be behind us.

Silver held above the all too critical price of $16.13:

At $16.52, were a pretty safe distance away.

Especially in light of the recent fundamental developments (i.e. The Trade Wars).

On the weekly, we can see that gold’s uptrend is still comfortably in place:

Gold is also still up on the year, performing well in it’s role as a hedge against uncertainty.

Silver doesn’t look quite as nice as gold on the weekly:

But hey, over the last 6+ months, that’s a series of higher-lows, so we’ll take ’em.

Silver is down on the year, but basically unchanged over the last four weeks consolidating in the $16.50 – $17 range.

Bottom line: Silver is holding its own despite all cartel efforts to smash it back down.

Which is one of the reasons the gold to silver ratio is all kinds of ugly:

Think of those massive, solid red candles over the last several days as the violent death throws of the elevated level in the GSR.

Historically, it’s at an extreme when it takes over 80 ounces of silver to buy just one single ounce of gold. It can’t last, and the violent movement over the last several days is typical of the top rolling over. In other words, it looks like the elevated level in the GSR is breaking-down.

That’s very bullish for silver.


Silver is such a smaller market, and silver is more accessible to the average investor. So once the metals turn for sure, once money goes into gold in earnest, it will start going into silver in earnest too, and because it is a smaller market, it will move up faster than gold – hence we will have a dropping ratio.

Let’s not give the “all clear” just yet, however.

If we look at palladium, it got clubbed like a baby seal yesterday:

Sure, we all want price to rise, so sometimes it’s hard to say and even harder to accept that maybe the metal got ahead of itself. Look at the latest rise off of the 50-day. It was a more accelerated move for a longer duration than rallies of the past.

But for now, palladium is in a sort of “no man’s land” on the chart. If palladium is going to ride the channel between the 50-day and 200-day, we’re gonna be in for some more pain, because there is still as ways to drop to get down to the 200-day.

Yet I’m not planning on that as the projected trajectory.

If the bleeding stopped in gold & silver, and if the metals did in fact put in a bottom yesterday, then palladium will start moving up.

Platinum also got clubbed like a baby seal yesterday:

We’ll have to see how platinum holds up, but it lost it’s 50-day moving average. The 200-day is not that far away. The last thing we want is for the 50-day to flatline and converge with the 200-day because we sure know how painful that will be since we have seen the convergence in silver for many months now.

But again, just like with palladium, if President Trump’s escalation of force stopped gold & silver’s bleeding, then platinum will turn up too, so we might not even get a trip down to the 200-day.

Copper is all sorts of ugly right now:

It’s looking like it did a year ago where it straddled the 50-day for months.

What we need to watch closely is how The Trade Wars affect the base metals. The straddling of the 50-day could be a thing of the past depending on what comes out of the Trump Administration next week.

Crude oil is still above $60:

Here’s the thing: Corrections happen over price or over time. By hanging above $60, save for a few days in mid-February, it looks like we could be correcting over time. If so, then we can expect crude oil to start moving again.

All of this is starting to create uncertainty, which leads to volatility:

Are we about to go above 30 again on the VIX? What about 50?

Or is the Fed still really in control, selling VIX, buying S&P futures, and nakd-shorting gold & silver so that the VIX is headed down to 10 again?

There comes a point where no matter how much they intervene, it becomes futile.

Are we at that point now?

The dollar looks to be rolling over on news of The Trade Wars:

That’s a textbook bounce off of resistance at the 50-day.

But with the fundamentals starting to matter, we could be revisiting the lows on the quick.

We can be certain the ESF and the Fed, in conjunction with the Plunge Protection Team, are running through all the various scenarios with what’s about to go down on the global macro stage.

The yield on the 10-year is just sitting back and taking it all in:

Of course, the longer the consolidation, the greater the break-out or break-down.

One thing is for sure, and that is the Fed & President Trump’s Franken-baby is spooked:

And Franken-baby’s got a birthday coming up.

Nine years old – born on 03-06-09.

Stack accordingly…

– Half Dollar