The Gold & Silver Set-Up Looks Complete As The Fed Is Walking A Minefield

SD Outlook: All indicators show that it looks good for gold & silver as the Fed turns full jawbone…

Let’s start out with this week’s economic calendar.

Notice what immediately stands out:

At an average of two Fed Heads per day, there’s going to be a lot of jawboning and MSM cheerleading. It is too early to tell what the intention of the Fed is going to be, but one thing is for sure: This is a data release packed week. Notice the theme here. Every time we have a data-packed week, there is always a steady barrage of Fed Heads spinning the data releases if somehow the “markets” don’t like what they say.

In other words, the economy is so weak that this week requires an average of two Fed speeches a day just to provide reassurances and to give the MSM a trophy for participating in the cheerleading.

At one point, the Fed will change it’s tone and turn full dove, and there will need to be a steady barrage of Fed speeches to interpret the “out of nowhere” downturn in the economy, but since we are now in the height of the holiday shopping season, and since the Fed’s product is debt, it is unlikely this will be that week.

And while Janet Yellen herself has said that it is a mystery why the Fed can’t find inflation, hyperinflation is kicking in:

It’s about time we saw all those Bitcoin millionaires putting their fiat into some real money, lest they plan to ride it all the way down.

Not only is a parabolic move like that not sustainable, but at some point the government is not going to be happy for their debt based fiat currency system looking so weak. For now it seems as if governments and central banks around the world are content on letting that price rise because it keeps the interest away from their true nemesis – gold & silver.

Turning to gold & silver, the GSR still favors the white metal:

The wild swings since late October show just how much trouble the cartel is having in keeping the metals in check.

Perhaps more a moral victory than anything, silver is shaping up on the daily:


A close above $17.35 is very important. Also, something to notice is that we haven’t had any $1 moves over a day or two like we did in 2016. People may have been lulled into a state of complacency with a few pennies here and a few pennies there that moves like that could catch people off guard.

Here’s one way to look at open interest:

On friday we asked if the flush was over, and while open interest is taking or has taken longer than over the last three flush cycles, it does seem like we are at the point where whatever the cartel has been able to achieve is it.

Translation: If we are not at the end of the flush cycle, we are very close to it. Trying to time the bottom of the latest flush could save a couple pennies to the downside, but it could also end up being a costly mistake if we get $1 moves like in 2016.

After several years of ending the year weak, besides the 2015 break-out fake-out, gold looks like it could be seeing strength into the year’s end:

Notice the extreme weakness to end the year last year. Either way, if that chart does not scream “gold bottomed on December 3rd, 2015”, then I’m not sure what a bottom is. Notice the slow but sure increase in volume over time. It just goes to show that gold would be performing rather well if it was not subject to constant market manipulation and precious metals price suppression.

On a more immediate view of the gold daily chart, it looks like gold is opening above it’s 50-day moving average:

After nothing but pain since Monday, September 11th (after gold hit $1362 intra-day the week before), gold looks ready to test $1300 as early as today. It has been the line in the sand of the cartel all year. Will this be the week that gold breaks-out to the upside? Just like with silver, trying to time purchases to save a few bucks with movement to the downside could end up costing a lot of bucks to the upside.

Platinum needs to get above $953 in a hurry:

After four days of gains, sure we could see a pullback, but if gold and silver break-out, platinum would follow suit just like it did to the early September peak. Now might be a good time to pick up some platinum because there is a ton of room to run.

Palladium hasn’t cared what other people thought of it for years now:

If anybody was looking for further confirmation of the bull market, check out palladium’s quiet but commanding move since bottoming in early mid-January, 2016.

Or look at copper for that matter:

Sometimes it’s good to zoom out and get a reminder of where we have been. While most are quick to point to rampant Chinese speculation, it might not be wise to go shorting Dr Copper at this point. Just like with palladium, copper carved out a bottom in Mid-January 2016 and has fought hard to get to where it is now.

Crude oil further confirms this:

In 2.5 years the price of crude went from $112 to $26, and just on Friday of last week it ran above $59. With all the geo-political tensions, weakening US dollar, and inflation kicking in, we could be staring down $80 in short order, especially if we start getting closes above $60.

The 10-year yield is still range-bound:

It’s beginning to look a lot like we’re going lower from here. We’ll see if the Fed has any jawboning power left this week soon enough.

The US dollar is breaking down:

Twelve months ago the “trade of the year” was long dollar, meaning most “traders” were forecasting the US dollar to keep rising. Of course, when people do not understand fundamentally that debt-based fiat currency is only strong relative to other debt-based fiat currency garbage, all of which is heavily manipulated and coordinated by central banks around the world, and especially the Fed, BOE, ECB and BOJ, then it’s easy to see why everybody was drinking the strong dollar Kool-Aid.

Did last Friday’s flash crash in the VIX signal the bottom?:

If it did, then there’s only one place for “fear” to go, and that is up.

Finally, theĀ big, fat, ugly bubble strong US economy meme:

Most of the time most of the people learn the hard way.

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.