SD Midweek: Gold & silver are looking good going into the last few trading sessions of the year…
Silver is facing a battle for the 50-day:
And the technical indicators look good.
It would be great to get above $17 to finish out the year, but I’m not holding my breath. The sticky point for silverbugs is the low volume as is typical at the end of the year.
Low volume means the cartel doesn’t have to whip up as much paper silver to move the markets.
Gold is above the 50-day:
Though gold is facing the same problems as silver with respect to the low volume.
It would be nice to see gold bust through $1300 to the upside to finish the year, but again, I’m not holding my breath. For now, the cartel is either in control or, or after being in control for so many decades, they are maintaining the illusion of control, and that’s not something that anybody should be betting for against. Which is one of the reasons why I dollar cost average into my purchases and try to buy extra depending on where we are in the wash-rinse-repeat cycle.
We can see the most recent bottom of gold & silver on the 30 minute chart:
The day before the FOMC meeting was the bottom, and now we have been climbing a wall of worry ever since.
It is nice to see the winter rally may be starting before the end of the year, however.
The gold to silver ratio has been ever so slightly inching its way back down to earth:
If you want to know what managed retreat looks like in near term, cartel still in control kind of markets, I would argue it looks like the gold to silver ratio since December 13th.
The dollar is fading over the past several days:
The slow decent and tight trading ranges speak to a market that is getting ready to make a move, which in the case of the greenback, appears to be a move to the downside.
If we start seeing notable moves in the dollar to the downside, we would expect to see corresponding moves in gold and silver to the upside.
Platinum is fighting for it’s 50-day like silver:
If the gap-up into today’s open holds, it would be a bullish sign because platinum will have burst through he 50-day with authority, and the 200-day would be in sight.
Palladium just put in another high:
Showing strength is there in the precious metals.
Copper put in a recent high yesterday:
In fact, you have to go all the way back to July of 2014 on the weekly chart to see when copper was last at this price:
Is there still anybody who thinks this is just rampant Chinese speculation on Dr Copper?
We’ve been talking about how oil could breach $60 soon:
And yesterday it did just that on an intra-day basis.
Which gives us a moment to pause and think about some things.
It was mid-2014 when the dollar began to strengthen and crude began to fall. Copper as well.
Copper is leading the charge after bottoming out under $2, and crude is lagging and the dollar was still peaking out in January of this year.
Gold and silver put in their bottoms at the end of 2015/beginning on 2016, and have been in a slow grind to the upside ever since.
What are the moves to be looking out for now?
A further weakening dollar and a rising oil price.
What would that mean for gold, silver and the markets in general?
Rising gold and silver prices, but also, rising prices of everything as the main input cost in just about everything is the price of oil. That means anything petroleum based, such as plastics and chemicals, shipping and transportation costs, and all other prices for both good and services take their cue off of the price of energy. A weakening dollar will only exaggerate those moves, meaning that we will feel it in our wallets, especially Americans using dollars to purchase good and services, and certainly imported goods and off-shored services.
In other words: Get ready for inflation of the kind we don’t want – consumer price inflation.
Then combine central banks around the world on epic printing sprees and tax cuts at home, and get read for it even faster.
While the cartel gave us early Christmas gifts of gold & silver thanks to their 3rd annual Christmas smash, the Fed is giving us their New Year’s resolution of forcing us to pay more for the things we need to survive thanks to their relentless pursuit to devalue the dollar by a nominal (which we know is already way higher) 2% per year in perpetuity.
Hmmm. If you inflate by 2% per year in perpetuity, doesn’t that mean that sooner or later it buys zero?
Now I’m no mathematician, but I’m pretty sure it does.
And that is their stated goal, even if it is directly against the very definition of their mandate for “price stability”, which technically means not rising or falling prices.
The markets seem to have reached peak complacency which has been a slow, painful culmination over the last year:
Once everything gets moving, there is little chance they will be able to contain uncertainty in the market place.
As we seem to have reached peak complacency, we also seem to have reached peak euphoria:
However, it has been a fool’s quest to call the top all year, so your’s truly isn’t about to start.
Besides, if these permanent tax cuts for corporations (sorry wage earning individuals, no permanency for you) and repatriation of overseas dollars are used for share buybacks, the market could just keep on charging higher.
Finally, Bitcoin fans got a taste of some fear last week:
And anybody who bought at $19,750 is still down four grand.
Although it seems some people either asked for Bitcoin for Christmas or used their Visa gift cards to buy Bitcoin.
If so, we would be seeing a holiday bounce in the world’s most favorite speculative bet.
But again, I’m not about to go callin’ a top in Bitcoin. It’s hard to say when we’ve reached peak mania but no doubt we are close.
– Half Dollar