SD Outlook: Looks like many riders will get thrown off the bull, but stackers & other smart investors know what this means…
I have been warning about this week for some time.
Other outlets finally began their coverage over the weekend:
you’re chart for Golden Week 2019 is wrong in this article:https://t.co/JBCktTadGJ
The pink shaded area of the chart begins next week when the markets are actually closed…
— SilverDoctors.com (@SilverDoctors) September 29, 2019
Although I would consider that an epic fail.
Regardless, the markets in China are closed this week for Golden Week, beginning tomorrow and continuing to next Tuesday.
That’s not all, however:
That’s right, margin hike!
Notice the other little quirk in there: When trading resumes next week, the opening price will have a limit of 8% for gold and 10% for silver (from the closing price today).
Question: Does anybody really think it would be higher prices which cause the limit to be reached next week?
Overall, Golden Week is bearish for gold & silver.
Again, at a very fundamental level, since the Chinese markets, including the Shanghai Gold Exchange, are closed this week, the cartel has one less gold & silver market to worry about, and one of the most important gold & silver markets in the world for that matter.
I have been saying for months now that the fundamentals matter, and I’ve been saying the fundamentals have been moving the gold & silver markets more than the technicals lately, and this week the cartel has the fundamental advantage.
Add in the margin hike on the Shanghai Gold Exchange, and we have a bearish outlook for gold & silver in the short term.
A margin hike can be thought of like this: Having to go back and give a bigger down payment on a car, or, if using leverage, having the minimum monthly payment on a credit-card increased after you’ve already paid it, so now you have to go back and pay even more.
Side note: Has anybody checked to see if there have been changes to margin requirements from the CME Group?
This week, in my opinion, will be a 3-pronged attack, so on to the other two.
On Friday, we get the Employment Situation Report (Jobs Report) for September, 2019, but that’s not all we get:
We get trade data.
The cartel always likes to use the cover of important data reports to smash gold & silver prices, and two of the reports “hit the tape” at 8:30 a.m. EST on Friday.
But wait, there’s more!
That’s not the only thing on Friday, so on to the 3rd prong!
That’s right, Powell takes center stage on Friday:
The Fed listens!
Only, they’re not listening to you, or me, or Main Street.
Nonetheless, this is a Friday afternoon event, so not only is it a 3-pronged attack this week, but it culminates with a double-header on Friday in the Jobs Report and the Powell event.
I think many riders will get thrown off this bull this week, but if you’re a willing an able buyer of physical here, this should be one sweet week!
One look at gold’s daily chart shows why I say to get ready for $1380:
Not only is $1380 an 8% move from where price is now, which is where the limit in Shanghai will be set when the markets re-open next week, but there’s also a bunch of support at $1385, so the chart huggers will get all giddy when in reality, the charts, at this point, are nothing more than cheap Dollar Tree paint-by-numbers.
One look at silver’s chart shows why I say silver could go to $16.25:
Although I have to admit that because of the gap between $15.50 and $16, I’m being conservative with my estimate.
Well, a 10% move from $17.50 would put the silver price at $15.75 when market re-opens in China next week, but I’m not sure if the cartel can smash the silver price that low.
OK, “Hey Half Dollar, didn’t you just say last week that gold didn’t have much more downside below $1500 or silver much more downside below $17?”.
Yes, I did.
Thanks for pointing that out.
Since this weekend, I have changed my thinking, in part because I did not know about the Powell afternoon event on Friday, and in part because I did not catch the margin hike until just now.
In other words, I was looking for general weakness this week, but now, it does look like the cartel will engage in a full-on price assault.
OK, “Hey Half Dollar, does the cartel have other ammo they can fire this week?”.
Yes, they do.
If, for example, there is “progress” in the trade war, as in “optimism” for the best deal, ever, then the sheeple will buy into the line that progress towards ending (and winning) the trade war is “good for stocks” and “bad for gold”.
Additionally, if there is relative peace in the world this week, not by accident of course, the peace, love & happiness will appear on the surface to dampen the fear trade dynamic, a dynamic which has been a fundamental force in the gold & silver markets lately.
The cartel has been having a very hard time getting the fear trade under cartel control.
The cartel is, after all, attempting to contain natural market forces.
Since China is telling us gold can go down 8% and silver can go down 10%, get ready for the GSR to go up:
It is generally known, and, more importantly, shown in practice, that “when gold moves down, on a percentage basis, silver moves down even more”, but this week, it would not just be natural for silver to outperform gold to the downside, but rather, it will be a matter of active public policy as evidenced by the SGE price limit of 8% for gold but 10% for silver.
Check out palladium:
Platinum is about to start puking its guts out:
I do think the cartel is now treating platinum less like palladium and more like gold & silver.
Somebody really loves a $55 crude oil price:
So much for that “fear premium” of drone attacks on Saudi oil facilities and imminent war with Iran.
Side Note: I think the geo-political focus of the Deep State Globalists in Washington and elsewhere is about to turn back to Venezuela, so tune-in to our live-stream today at 12:00 p.m. EST to find find out why.
It will be interesting to see if copper holds $2.60:
People talk about the “lower bound”, and in the case of copper, I do think it’s somewhere around $2.50, because, believe it or not, mining metal and bringing it to the market has a cost.
Everybody and their brother are looking for a stock market crash this October:
The longer the delay in crashing the stock market, the more painful it will be for regular investors, but for reasons you will read about in a moment, I suspect we could see a record high stock market this week.
Barring some sort of surprise, I would expect the VIX to get walked back down:
At the same time, however, if there is an October surprise of some sort, a quick run to 27 or even 28 would not be a good sign for the stock market bulls.
I just don’t think there would be an October surprise this week, however, in part because I think the focus will be to get gold & silver prices as low as possible before the next rally.
To help shape the narrative, if gold & silver are getting the hammer, we’ll likely see some “selling” in bonds (which means higher yields):
Selling the 10-Year Note means, in the mainstream, that investors are moving from safe haven assets such as bonds (hence the shaping of the narrative) and moving into risk assets such as stocks, so while we know the stock market crash is coming, if we have one more move higher in yield before it all comes down, then we could see a record high stock market this week.
The dollar has been stable throughout all of this, but now the dollar appears to be strengthening:
I’ve been lookin’ for the DXY to pop above 100, and that would add to the heat on gold & silver.
The bottom line as we find ourselves here this beautiful Monday at the end of September?
The cartel has absolutely everything on its side to smash gold & silver prices this week.
They always make more money suppressing price than they do by letting price rise.
Since we allow it to happen, and since people willingly go to the rigged casino?
The smashes this week could be particularly brutal, more than in prior years.
The reason’s because gold is at multi-year highs, and in other currencies?
Gold is at record highs in other currencies, so yeah, cartel’s not happy.
What does all of this mean to stackers and other smart investors?
It means to raise some money, because we’ve got a nice sale!
What does this mean to traders looking for a quick buck?
Things could happen quick, but not just price declines.
We could see some real volatility here, intra-day.
If you are not a corrupt insider, can you win?
If you’re lucky, sure, casinos are like that.
But it’s rigged luck in a rigged casino.
Which means there’s no long-term.
Physical is where it’s really at.
Want to see free markets?
Don’t play in the casino.
Just buy some phyzz.
And forget about it.
That’s all it takes.
Then we’d see.
– 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.