“Get Out Of Shanghai Gold Exchange Consequences, Free” Still In Play For Gold & Silver

SD Friday Wrap: With this card still in play, it’s hard to say that gold & silver found their short-term bottom’s on Tuesday…

I’d like to start this Friday Wrap by saying something about this upcoming Sunday/Monday.

I’ll let the Shanghai Gold Exchange do the talking for me:

That is important.

The Shanghai Gold Exchange in China does not re-open until next Tuesday, which means the cartel still has plenty of time to bring the hammer if they want to.

Regardless, I’ll be monitoring the charts when the gold & silver “markets” open on Sunday evening.

So let’s talk about this first week of October!

I have been looking for $1380 gold and $16.25 silver.

Why?

Because the SGE is letting us know that any price divergence between where price closed on Monday (September 30th) to where price opens next Tuesday will be limited to 8% in gold and 10% in silver.

The reason I’ve been calling for $16.25 silver is I don’t really think the cartel can smash prices to a 15-handle, even though the cartel could work silver’s price to well under $16 if they wanted to.

The $1380 gold price is 8.0% down from $1500.

The US dollar to the Chinese yuan is pretty much right were it was towards the end of August, since which time the yuan has strengthened and then fallen against the dollar, round-tripping to basically unchanged.

My downside targets are assuming there are no wild or shocking currency swings.

So do I think the worst is behind us, now that $1500 seems to be holding in gold and $17.50 seems to be holding in silver?

I do not.

Again, based on the fact that the cartel has a “get out of dealing with China free” card, I think we could get a good smashing before it’s all over with.

That said, I’m glad to see gold & silver where they are right now, because I’ve been feeling that $1500 in gold and $17.50 in silver offer some pretty solid support, and we have seen that solid support this week.

*****

NOTE: THESE CHARTS WERE SET-UP AROUND 1:00 P.M. EST, AND DO THEY NOT INCLUDE PRICE ACTION AFTER THAT TIME UNLESS STATED

*****

Here’s a look at silver’s price action from last Friday until 1:00 p.m. today:

We briefly fell under the psychologically important $17 price level on Tuesday, but we’ve pretty much round-tripped to “unch”.

Looking at gold’s price action from last Friday until 1:00 p.m. today, we see the yellow metal is slightly positive:

Like with silver, Tuesday was also gold’s weakest day.

I have been looking for the gold to silver ratio to get above 90:

With Shanghai still closed until Tuesday of next week, barring some escalating geo-political military conflict somewhere which could affect the markets come Sunday evening, I’m still looking for the ratio to get above 90, so if the cartel is going to make a move with a price smash, it’s going to happen soon.

These truly are exciting times for stackers, especially with this latest gold & silver price weakness that is quickly coming to an end.

We are getting closer to gold fever every day, especially when I see articles like these:

People will be in for one rude awakening in the economic collapse because they can’t see the forest for the trees.

What’s the problem with that?

Well, they’re full of ignorant bliss all standing there, in the middle of the lush forest, yet failing to realize that the forest is on fire, the blaze has surrounded them, it’s closing in, and there’s no escape.

A few of the corrupt insiders will get plucked to safety, with their lives, limbs and fortunes in tact, courtesy of the rescue helicopters, but most people will simply be consumed by fire.

But I digress.

Silver is sitting on its 50-day:

If the cartel does pounce once more, it’s coming very soon, and while I don’t think they’ll take silver the full 10% lower than $17.50, silver’s 200-day moving average sure looks tempting down there at $15.84, which, all things considered, is still in China’ acceptable range.

Gold, on the other hand, has been favoring its 50-day over its 200-day for the last year:

If the technicals matter, the RSI in gold shows plenty of room for gold’s price to run to the downside, so in addition to the cartel’s carte blanche, the technicals aren’t screaming “buy gold hand-over-fist” right now.

Palladium is really working on building a base above $1600:

Some more consolidation here would be very healthy, especially as the other precious metals bottom and reverse.

At this point I don’t think we’ve seen the bottom in platinum:

 

If the cartel is going to smash again before Golden Week is over, I’d be looking for $870, $860, or $840 as possible downside price targets.

OK, “Hey Half Dollar, you’re analytical skills are lousy, I mean, which is it, $870 or $840?”.

Yeah, well, I’m not on the inside, so I don’t have that exact information, but I will say this: The cartel’s attacks are more like carpet bombings than they are like sniper shots.

That is to say, they don’t smash price with the accuracy of a head-shot at 500 meters, but rather, they carpet bomb, and it’s the proximity that matters.

You see, the head shot is messy, and if that trigger puller’s rockin’ a .50 cal, like, oh my, you know what it’s like when you shake up an unopened can of coke, stand 5 feet in front of it with a 12 gauge slug chambered in a single-shot break-away, and well, yeah, moving on, let’s just say that when it comes to the carpet bombings, the cartel’s got not qualms of letting ‘Ol Willie Pete make the runs.

Crude oil may have finally stopped plunging:

I continue to be way early on my timing, that is, wrong, about when crude oil starts rising in price, but I think crude’s turn around is not just going to be a “surprise” story, but also something that hits everybody in their wallets.

Since we are now 13 months until the 2020 Presidential Election, with each passing week, in my opinion, we’re that much closer to the onslaught of maximum financial pain.

Copper’s been under $2.55 several times this week:

I’m starting to think we’re seeing the final wash-out of dis-inflationary pressures when it comes to the commodities.

This is not what a healthy stock market looks like:

Many professional traders are looking to see if Dow 27,000 holds, but it’s not looking good for the bulls.

The VIX is starting to look interesting:

We’ve had a few minor scares this year, but nothing shocking, although that appears to be changing, and it might be one of the reasons why gold & silver have held on, especially this week, against all odds.

Yield on the 10-Year Note is now pricing in a 25 basis point rate cut:

The lower interest rates go, and especially real rates, the more investors look for an inflation hedge in gold & silver.

That said, falling yield on the 10-year benchmark treasury is another reason as to why the metals have been able to hold on this week.

You see, gold & silver’s fundamentals are wildly bullish, for the mid and long terms, and that has not, nor will that change for quite some time, if at all before the currency crisis and monetary reset.

The cartel is fighting a losing battle, and they know it.

The dollar looks to have stalled-out from its latest take-off:

I have been looking for the dollar index to pop above 100, and we nearly got there on Tuesday, so I think that either the top is in, or, if the cartel does decide to come in and smash gold & silver one last time before Shanghai re-opens next Tuesday, we will see the top very soon, which puts the DXY right around my target of not much higher than 100.

The bottom line for this beautiful Friday in early October?

The cartel wants us to think that we have bottomed.

That way they can come in with a good smash.

And really work to crush some sentiment.

But I don’t think the weakness lasts.

It could be over by next week.

In fact, it may be over now.

I really just don’t see.

With card in-hand.

Foregoing a hit.

It’s tee-ball.

Too easy.

To hit.

It is.

Stack accordingly…

– 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.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at PaulEberhart.com. Paul’s Twitter is @Paul_Eberhart.

***