SD Friday Wrap: Gold & silver finish the week strong. We may soon find out that it’s not even a cartel stronghold, but a cartel weakhold. Here’s a recap…
On Monday my theme for the week was “the window of opportunity for dirt cheap gold and silver is closing”.
Silver opened the week in the $14.30s, and gold opened the week in the $1220s.
Sure, we didn’t get a $1.00 surge in the price of silver, nor did we get a $100 jump in the price of gold, but we got something that any gold bug or silver bug should want: Progress.
As such, with the progress made this week, the window of opportunity is indeed closing. How people still think we are going to revisit the December, 2015 lows is beyond me. With silver, we basically did, and with gold, well, gold has held it’s “safe haven” bid and didn’t get quite retest the lows.
So let’s start with gold.
Who can say gold hasn’t bottomed yet?
I mean, that’s a round bottom any bull would want to see on the daily chart:
Since mid-August, a clear uptrend has been established.
Just today, gold has done something it hasn’t done since mid-July:
And that is to trade above $1250 on the futures market.
Then, just look at this big, fat, beautiful candle on the weekly:
There is reason to be bullish here. Gold punched through its 200-week moving average with authority. That’s a major moving average, too.
Those who think gold is going to fall to $1,000, and those who think silver is going to $12 are just making noise. Understand those who say that are most likely disappointed that their dollar cost average to stack is higher than yours, so they must vent their frustrations.
I get it.
There are a lot of people who bought gold or silver in 2011, and not only that, but then went all in right then and there. On top of that, they may have sold in 2014, 2015, or 2016.
So they are bitter.
But to anybody reading this who is bitter, think about it this way: The cartel has given you a second chance.
Life doesn’t come with many second chances, especially with cartels.
The gold to silver ratio is still telling me to buy silver over gold:
I mean, it is amazing that here in the final month of 2018, it takes over 85 ounces of silver to buy just one single ounce of gold.
It just shows the pure hatred the cartel has for silver.
But it is beyond hatred.
It is pure, unfiltered and unadulterated fear.
Silver is the power of the people.
Always has been.
Always will be.
So I’ll take this slight progress as shown on silver’s daily chart:
It has taken longer to establish an uptrend than gold, but remember, gold moves first, then silver follows. Furthermore, silver has punched through its 50-day moving average.
And, like gold, check out this big, fat, beautiful candle on silver’s weekly chart:
Sure, we’ve got a lot more progress to make, but that is a solid base that is being build.
Bit by bit.
I’ll take silver’s move this week.
Palladium had a lot of chatter this week:
Some people say palladium is screaming, “overbought”, but I don’t see that.
I see some profit taking when reaching parity with gold (depending on where you looked at price).
Who wouldn’t take some profits?
That’s the point, right?
I mean, precious metals are lots of things – “savings”, “financial assets”, “hedges” against inflation and uncertainty, and they are “investments”.
People invest to make a profit.
So why not take some profits?
Now platinum looks like it wants to double-bottom here:
However, if gold, silver, and palladium are turning the corner, I think platinum will turn the corner too.
Crude oil looks like it could be forming a “bear flag”:
And that would mean another leg down.
That said, I do think the downside is limited, especially if we’ve seen the top in the dollar.
More on that later.
I’m getting tired of watching polka:
For now, however, copper just seems content dancing around its 50-day moving average.
OK, onto the dollar.
If I were a dollar bull, I’d be pretty nervous right about now:
Good thing I’m not a dollar bull.
Why should the bulls be nervous?
Well, this week we had another horrible reporting of the trade deficit:
That’s not good.
On top of that, today we have this:
China talks are going very well!
— Donald J. Trump (@realDonaldTrump) December 7, 2018
But think of the implications.
If the trade deficit is getting worse, and if talks with China are going well, which we can only assume, even though I have caught the President in numerous economic lies, but for now, let’s take it at face value – we can only assume the talks are going well.
So here’s a question: Do you think those talks might include a strengthening yuan, a weakening dollar, or both?
I do, in part because the currencies are one way to make progress on those US trade deficits.
So, yeah, I’d be nervous if I was a dollar bull right now.
Yield on the 10-Year Note keeps on plummeting:
Not only are we under 3.0%, but now we’re under 2.9%.
Then there’s that whole “yield curve inversion” thingy we have to deal with.
I wrote a primer on that this week, so check it out if you either haven’t, or if you want to maybe learn something you possibly didn’t know about bonds/interest rates/economics.
We’ve seen the death cross on the Russell 2000 for some time.
I have been showing the clearly visible death cross on the Nasdaq lately.
But now, check out the S&P 500:
I would also be very nervous right now if I was a stock market bull.
Why anybody trusts the system, however, is beyond me?
Most people have to learn the hard way I guess.
Volatility has risen somewhat:
But in my opinion, not enough as it should be rising.
Which is another way of saying the cartel is doing its best to maintain the illusion that all is well.
All is not well, however.
In the markets.
In the economy.
And it’s looking more and more like 2018 will go out with a bang.
Yet not only are gold & silver hanging-on here, but they’re even making progress.
We may find out the cartel’s stronghold isn’t built out of bricks.
The weakhold could be built out of straw.
With just a brick veneer.
– 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.