Gold & Silver Give Up Some Ground To Dig In, Harden Defenses, & Prepare For Next Week’s Battle

SD Friday Wrap: Enjoy the weekend, and be merry! For next week gold & silver go to battle with the cartel…

Too bad I don’t watch movies anymore.

It is also too bad my memory is shot.

Because I know there’s a scene in a movie or two, you know the scene, where the great leader is with his troops the night before some big battle or whatnot, and the leader says something to the effect of, “Men – eat, drink, and be merry! For tomorrow we go to war!”.

In some weird way, that is kind of how I see gold & silver right now. Sure, the metals gave back a little this week, but the preparations for battle next week are already underway. Gold & silver have retreated a little, dug in, and hardened their defenses, and it’s all in preparation for next week’s big showdown.

To me, next week looks like it is turning out to be a “sell the rumor, buy the news” week.

What is going to be sold?

That would be gold & silver, likely “sold” up to and including some of Wednesday.

What is the rumor?

The Fed will hike the Fed Funds Rate next Wednesday at 2:00 p.m. EST.

What is the news?

That comes next Wednesday, of course, after the Fed will either have hiked or held.

Right now, CME Group calculates the probability of a rate hike at 76.6%:

The whispering in the market is that the Fed will hike in December, and then the Fed will hold in March.

I think they do hike 25 basis points next week.

We’ll see.

Back to the analogy.

If gold and silver are sold on the rumor, and if gold & silver are bought on the news, what does that mean?

Rally time next week!

Now, is the rally guaranteed to start next week?

Of course it is not.

But I’m still looking for my upside surprise in silver.

We caught glimpses of silver wanting to upside surprise this week:

Silver wanted to break-out a few times this week, but the cartel wasn’t having any of that.

And they let everybody know it too, at exactly 8:30 a.m. EST this morning:

Nothin’ like a little cartel smashin’ an hour before the opening bell to set the mood of the day.

They do not break our spirits!

The longer the manipulation and price suppression continue, the more violent to the upside the price moves will be.

And that’s fine by me.

Not all is lost this week, however.

Silver is still above its 50-day moving average:


On the daily chart above, silver was threatening to put in a clearly visible higher-high, which would have taken out the November 1st high, but for whatever reason, the cartel was not ready for that, and so they smashed.

We’ll get there, and if it is a “sell the rumor, buy the news” week coming up like I think it will be, we may get there much sooner than later.

Gold is re-grouping and getting ready to take a stab at its 200-day moving average:

Technically speaking, gold never touched the red-dotted line, so when we finally do get there, gold will be fresh for the battle.

Like silver, if next week plays out like I think it will, then we could see gold attack much sooner than later.

We are really not in that bad of shape here.

The gold to silver ratio looks like it has topped:

I have been saying the next major move is a move down in the ratio, which makes sense if we assume that gold has begun the rally (or at least has begun climbing the wall of worry), so silver is now playing catch-up.

Again, this is all part of the technical “prep work” to go on the offensive.

Palladium looks like it wants to consolidate here:

Palladium has, after all, been on one heck of a run since mid-August, so a consolidation would be healthy right about now.

If the consolidation falls in line with how I think next week plays out, there would be some three days of consolidation, and then the next leg-higher begins as palladium follows suit with the other precious metals.

Sure, every analyst out there is singing the whole “Ha! These metals fail to break-out every time, so get ready to revisit the December 2015 lows” tune, but I’m just not so sure.

I don’t think we go that low.

I think the bottom in gold & silver is already in.

Platinum’s pivot was stopped in its tracks:

Of course, it makes sense following my “sell the rumor, buy the news” theory.

What didn’t we get this week?

We didn’t get my “front-running” of the trade like I thought could happen. We saw that the metals looked like they wanted to run, but they never had enough juice on their own, and when going up against the cartel, you need all the juice you can get.

Copper is exactly where it has been for many weeks:

People talk about a “coiled spring”.

Copper is certainly coiling if not already coiled.

Crude oil is stuck in “wait-n-see” mode:

I think a lot of crude oil’s wait-n-see has to do with the US dollar.

Speaking of which, the dollar hit a new short-term, intra-day high today:

To me we’ve got a classic double-top on the chart.

But hitting that intra-day high was by no means something bullish:


Fading the move and going out on the lows is not bullish, but rather, indicative of a move that is running out of steam.

I am still calling the next big move in the dollar as a move down.

We’ll see.

Yield on the 10-Year Note is right at either side of 2.9%:

There is going to be a lot o talk about interest rates next week.

It will certainly be interesting to see who is saying what, and within that, who is calling out the Fed for what they are, or aren’t, doing.

The VIX is above 21:

I think we might get a volatility spike next week, too.

Finally, well, this:

Death is quickly coming to the Dow Jones Industrial Average – the sole remaining major US market index that has yet to put in a death cross.

So how do we sum up this week?

We made it through a tough week, and gold & silver are even down a little, which is perfect for anyone who plans on scouring some weekend deals looking for last minute gold & silver Christmas gifts.

You know, for family and friends.

Wink. Wink.

The gift that keeps on giving.

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 Paul’s Twitter is @Paul_Eberhart.