The 8:30 a.m. cartel smash was an epic fail. The cartel is now forced to retreat as gold & silver fight back! Here’s an update on the wild price action…
Gold & silver were showing strength last evening until being repelled at 11:00 p.m. EST up until and through the inflation data dump:
After initially feeling the brunt of a paper dump, gold and silver have surged:
Gold is now back above $1350 and silver is back above $16.70.
The miners are green today as well:
JNUG, everybody’s favorite triple-levered junior gold mining ETF is up over 10% today. First Majestic is up nearly 5% on the day.
If it has been bad for gold & silver, it has been absolutely brutal for the miners lately, so it is good to see them performing.
Last Friday we highlighted just how bad it’s been for the miners by throwing up this graph of First Majestic:
That wasn’t even the low. AG traded below a 5-handle at one point.
The dollar is selling off:
So is everybody’s favorite carry-trade: USD/JPY.
When USD/JPY is falling, as shown on the chart above, that means the Japanese yen is strengthening on the dollar, and, generally speaking, that is bullish for gold as traders use the carry trade and algorithms feed off the foreign exchange pair in part to move gold and silver. It’s all part of the manipulation scheme.
Why the reversal in the metals today?
It has to do with the markets coming to grips with inflation. The yield on the 10-year is up again today from yesterday, and inflation is pretty much right at the Fed’s stupid stated “2% objective”.
It stands to be seen if Fed Head Powell will mention the Fed’s burning desire to devalue the purchasing power of the dollar by 2% per year as much as Yellen, but by all signs, inflation as measured by the government and the banks is back.
It is just not possible to argue against gold and silver in the face of inflation. While gold and silver have many different unique roles, one of their roles is acting as an inflation hedge.
So does this mean we have seen the short-term bottom?
China is closed beginning this evening and through next Wednesday, so we still have to be on guard.
However, after today’s refusal of the pounding and bullish reversal, it does seem the more likely course of the cartel is now to try and manage the price rise as opposed to the continued smashing, which was an epic failure today.
– Half Dollar