HEADS UP: The Window Of Opportunity For Dirt Cheap Gold & Silver Prices Is Closing Fast

SD Outlook: It is going to be a busy week in the economy, in the markets, in politics and in geo-politics. Here’s what it means for the markets this week…

This is going to be one of those weeks that seems to fly by. In the Western world, it is crunch time for the holiday preps, and in the markets and the economy, it is crunch time for end of year preps. Politics will get thrown into the mix as well, including any geo-politics.

We already see the mix of this on all fronts, as represented by these Tweets:

Over the weekend Presidents Trump and Xi agreed on a 90 day truce in the trade war. Needless to say, an end of year Stanta rally in the stock market is likely back on the table.

But the trade war “truce” was the weekend’s news. Looking ahead, there is plenty on the calendar.

Lots of Fed Heads flappin’ their pie holes early on:

The Wednesday Powell speech is his testimony on the economic outlook before the Congress’s Joint Economic Committee. Note, however, that also of interest, and what will surely be closely watched, is the housing data we get in the first part of the week.

Thursday and Friday bring us to end the week with one of the cartel’s favorite day of the month:

I’m just not so sure we get a hard and heavy smashing this Friday for the BLS Employment Situation Report (a.k.a. the Jobs Report). I mean, they have literally smashed all year, and gold and silver have shown that there is very little downside below $1200 and $14 respectively.

If I were a bettin’ man, I’d be looking for that upside surprise finally hitting this week.

We’ll see.

The gold to silver ratio is right where it’s been for months:

When it finally starts moving, its going to fall hard & fast in my opinion.

Silver punched through its 50-day moving average this morning:

Is this the week we finally get above $15? Or at least $14.75 en route to $15?

Since we obviously don’t know all of the details of the truce between the US and China on the trade war front, and if you subscribe to the “China is controlling the gold price”, which I mostly do, then it is likely the truce includes some strengthening of the yuan, which we could progressively see this week, and that would be bullish for gold & silver, in line with the theory.

Gold has some nice little real estate between it and its 50-day to start the week:

Gold has taken it on the chin ever since the death cross back in late June, but by golly, it doesn’t take a technical analyst to see that we’re bottoming nicely in gold. The 50-day moving average is up, and over all, since the bottom, the trend is up.

Bottom line: These dirt cheap prices for gold & silver may be fast fading. The window of opportunity is closing.

Palladium will be interesting to watch:

I think we have room to run higher too. The Relative Strength Index, after all, is not screaming “overbought” at all.

Platinum looks like it even wants to recover from a brutal last week:

Platinum just may recover this week too.

Why?

The commodities have gapped-up overnight and into this morning.

Crude oil is up over 3.5% here in the pre-market:

Crude briefly lost and was at risk of losing whole number support at $50, but this morning crude is doing battle at $53.

Copper also popped overnight and into this morning:

I have been saying all along that I was not looking for further downside and weakness with copper. The question is, can copper get above its 200-day moving average and begin to clearly show strength here?

Bottom line: The outlook for both the precious metals and the commodities is bullish.

Of course, the outlook is bullish for the stock market:

The Dow surged last week, and with the cease fire on the trade wars, I’m starting to think we could surge all the way up to all-time highs and a final, blow-off top. That would really be one final hoorah melt-up, and by the action last week, and with the markets “liking” the trade war truce, we could indeed see a pretty big surge.

Here’s the question, and in my opinion, the deciding factor: If the economic data is exceptionally good this week, if Powell’s outlook is bullish on Wednesday, etc, could that crash the stock market’s trade war truce party?

It could indeed.

Why?

Because the December hike would pretty much be guaranteed, which some have come to bring into doubt, and the markets would start to assume, and price-in, four rate hikes in 2019.

In other words, if the market is going to have one last surge higher, it is in its window right now.

We’ll see.

Of course, the VIX will be helping:

Look real close at the VIX. That black Hershey-squirt on the dotted red line is the pre-market action. The VIX has gapped-down to under 16.50 from being at 18.50 just on Friday.

Like I said, if there was ever a window of opportunity for the stock market, it is now.

Just like with gold and silver, albeit one is closing while the other is opening. Gold & silver’s window of dirt cheap prices is closing. The stock market’s window is opening, but I think the bitter cold of winter will see it closed on the quick.

Yield on the 10-Year Note was very close to breaching 3.0% to the downside:

Which would also be supportive of one final ramp in stocks.

Why?

Because, as conventional investment wisdom goes – since the yields are so low in the bond market, investors must move into the stock market in order to get better returns on their investments.

The wildcard this week is the dollar:

That said, if the yuan is going to strengthen, and if some “behind closed doors” agreements were made between the US and China, I would say the dollar would weaken from here in conjunction with a strengthening yuan.

And, of course, this would be bullish for gold & silver.

So enjoy the first week of the final month of the year.

Just don’t forget to look at the markets from time to time, because this week is surely going to be an interesting one.

And just like a window of opportunity is opening in the stock market.

A window of opportunity is closing on dirt cheap gold & silver.

If you’re trying to get in, don’t let it shut you out.

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.

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