Popcorn Time: Can Gold & Silver Continue Their Upside Momentum From Last Week?

SD Outlook: Should be an interesting one to watch this week, for both fundamental and technical reasons, so grab that popcorn and take a seat…

The most important data points of the week hit the tape Tuesday through Thursday:

Of particular interest, on Wednesday, we get the second revision to the second quarter GDP. Remember, it was just on Friday when President Trump put out a video Tweet saying something to the effect of “get ready for a whole lot more than 4.1” (referring to GDP). The ‘consensus’ is for the revision to put GDP at 4.0%, so we’ll see. GDP should have some market moving implications, and not that it is still 1 hour before the regular market open. In addition to the revision to GDP, on Thursday we get the boringly named Personal Income and Outlays. Don’t confuse a boring name for something that is very important. You see, this report is where we get PCE, as in “personal consumption expenditures”, and that is the inflation number the Fed looks to when they say they are looking to devalue the dollar at a symmetrical rate of 2% per year. The ‘consensus’ has core PCE coming in at 2.0%.

A couple notes about inflation and the PCE:

  • The Fed won’t admit this, because even though PCI in and of itself is flawed, PCI is based on a fixed basket of good & services, while PCE is based on a basket which changes every year. You can see the preference for the Fed to prefer PCE then over PCI because it is easier to understate inflation if the basket is always changing.
  • The Fed prefers “core” PCE over the headline number, because core PCE takes out food energy costs from the number. The net result is that this also understates actual inflation because, generally speaking, the headline PCE is higher than the core PCE.

Just wanted to share those those little nuggets to give an understanding on how and why the Fed does what it does. Bottom line: It’s a scam and a sham that the Fed uses to their advantage, and nobody in the mainstream financial press and rarely does a politician ever call the Fed out on this.

I have zoomed most of the charts out four years again, because the reminders of where we have been and where we are going are important.

On Friday we looked at the record S&P 500, in part because I wanted to show the 666 bottom. Yes, numbers like that matter when you realized that for the moment, the globalist manipulators are still in control.

And they’re evil satanic psychos.

But today, we’ll show the Heartbeat of America Index to show it’s not just the S&P that went full MAGA:

We’ll have to see if there is momentum in the stock market as we need to see in gold & silver.

If people  are under the belief that John McCain was a deep state swamp creature at the very minimum, or a corrupt Traitor to America and the Constitution, which I’m certain the majority are, even if they can’t say it publicly, and the sheeple, well, I have my own term, I call what we would call the sheeple “brainwashed zombies”, and being zombies, they are incapable of opinions, but to the real Patriots, again, if most believe that McCain was bad for the U.S., then at face value his death is good for the U.S.

Why do I bring this up?

Peak Trump.

That’s why.

McCain’s death only prolongs the peak and retards the rise in gold & silver.

I mean, one of the last things he did on the floor in Congress was say Rand Paul is now directly working for Vladimir Putin:

Furthermore, there are reports coming out that President Trump refused to make a statement about McCain being a “hero”, which only adds even more evidence that McCain’s death will extend the peak.

One final thought on McCain and effect on markets. It would be interesting for somebody to follow some of the DOD contractor stock prices to see if they go down as a result of Congress losing a warmonger? I’ll make an effort to look into it come end of the week for the Friday Wrap, assuming my short-term memory doesn’t fail me.

Moving on.

The 88 to 90 area better hold for dollar bulls:

Of course, I’m assuming that the dollar is rolling over here, and no, I don’t think the drop will quite that fast, like in the next few weeks. It could be, but that’s not my point. My point is that there is basically an air pocket between 88 and 82.

One final thought on the dollar: President Trump has flip-flopped four times this year on the dollar

  1. President Trump as “strong dollar guy” in January at Davos
  2. President Trump a “weak dollar guy” in mid-July
  3. President Trump as “strong dollar guy” two weeks ago
  4. President Trump a “weak dollar guy” just last week

See why the popcorn may be necessary this week? Three of those last flips have come in the last 1.5 months.

While yield has been in a sideways channel for several months now, zooming out a little it does appear the trend is higher:

It remains under my thesis, however, that yields will either be worked lower, or they will start surging, but one thing is for sure – the longer we spend in the nasty sideways channel the sooner we arrive at the break-out or break-down in yield.

I’ve been saying these markets are about to get very, very interesting.

And they are.

Of course, volatility is still rendered sterile:

Which, if you’re a market manipulator and your goal is to manipulate the stock market higher, the VIX where it is now is exactly what you want to see.

Which brings me to a side note: Remember – the manipulators don’t always want the stock market to go up. In fact, many people, myself included, argue that when the crash ultimately comes, it will be exactly at the time the manipulators want it to come down. The “why do they want it to come down” is a topic for another day, however.

The point is that we must understand that there will come a time when paradigms will shift, and being on the right side (owning gold & silver) and being on the wrong side (owning paper financial assets) will matter, and unless you know when that is (Ol’ Half Dollar doesn’t) the only way to be positioned for the paradigm shift is before it happens.

If the Chinese yuan (chart below only of last year) is coming down, that could mean we should start seeing higher gold prices:

That is assuming the Chinese are controlling the price of gold.

I have not gone through all the mental rigors of over-analysis to have formed a theory on this myself, so I’ll yield to others for the time being, but assuming the theory is valid, let’s hope that is a top in UCD-CNY.

Is crude oil rolling over or is it climbing its own epic wall of worry?

Here’s what crude oil looks like on the zoomed-out chart:

To the inverse of the dollar, notice that once crude moves decisively to a higher-high, there is very little resistance until the mid-$90s. If crude oil closes below $64, then oil bulls may get concerned that the trend is lower, however, while not very easily seen on the zoomed out chart, crude oil had upward price momentum last week, so just like with the metals, we will have to see if there is carry-through.

Copper has come down this year, big time, but copper is still 40% off of the bottom from early 2016:

That is one ugly looking chart, and the trend has not been the friend of copper bulls this year.

Palladium led the charge higher last year, and it is no surprise we really see the charge when we zoom-out:

All things considered, even with the correction this year, and after the mid-August plummet, palladium looks to be leading the charge yet again. Interestingly, while platinum has put in a fresh bottom, palladium is still up 107% since bottoming on January 12, 2016! That’s pretty amazing because that gain is even after this latest correction of most of 2018.

Here is platinum looking sickly when all zoomed-out:

If platinum can recover here, we can call it one massive, double bottom, drawn out over multiple years.

Let’s hope so.

You will see why when we get to silver.

First, with the gold to silver ratio, we see a short-term double top has formed:

The gold to silver ratio has been very kind, especially in the last couple of weeks, to those who have been buying physical silver.

For now, gold appears not at risk of testing the December 2015 lows:

Yes, the long-trend support line has been breached to the downside, however, if crude-oil is going to keep climbing and if the dollar is going to resume its fall again, both things which I think are the case, then gold should start moving higher again.

And that is not even considering the significance of the COT Report for now.

Silver, on the other hand, doesn’t look so hot when we zoom-out:

I will say this about silver: While it looks like a re-test of the December 2015 lows in silver could be at hand, if gold has indeed turned, along with the dollar and crude oil, all three things which I think are what is happening, then silver is in the process of turning (which it is) and will start moving higher, faster than gold.

So while platinum has overshot and put in a new, multi-year lower-low, silver may be about as low as it is going to get.

What to expect this week?

I’m expecting momentum carry-through in the metals. My call was spot on last week when I said “unch to slightly higher”, and we ended up slightly higher.

This week, I would drop the “unch”, and the case is strong to finish the week higher in price.

Lot’s of potential catalysts and landmines all around.

Personally, I made my purchase on the bottom of a couple of weeks ago, so for now, I’m all “wait-n-see”.

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.