After being teased and pushed to the ground twice this year, the otherwise mature and conservative Gold is striking back.
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Gold ain’t gonna take it anymore. After three decent runs so far in 2017, including two runs trying to take out the 52-week highs, the price of gold is now standing its ground:
On the 15-minute chart, we can see that gold has been in healthy consolidation over the last week. Gold is either going to break-out or break-down, and a break-out could see the yellow metal surging to new 52-week highs. At the end of January, 2017, after a nice run and small dip, gold surged from $1180 to $1260, and after this consolidation, if there is another surge from the roughly $1275 of today, gold could have its sights aimed at $1355. It is hard to get excited after the repeated beatings, but now that July is behind us and all eyes on the stock market, a move could come from the blindside in a surprise to the upside:
In silver let’s cut right to the chase. Last week, in a somewhat controversial post, we asked if the silver price was headed to $15. The chart was signaling a bullish wedge. Bullish wedges are downward sloping and bearish in the short term. To finish the last week in July 2017 however, we can see that silver has fought hard to punch through the channel and surprise to the upside:
Sure, it has been ugly all year, but we thought there would be no riding of the resistance line, and thankfully, silver seems to have punched through it with authority. That really is a good looking chart, and last night, SD broke the silver pop that could be a taste of things to come. For now, if we zoom in on the daily, there are three areas to focus on:
Lets start with the bad news first. That big, fat, ugly candle at the end, that is a bearish engulfing candle. When a sucker that big drowns out the day before, that’s not a good sign. The good news is that while the last candle is bearish, the other two indicators are bullish, and two out of three ain’t bad. Yesterday we put in a close above the 50-day moving average. That was the second close in a row above the trend-line. In addition, this is why the importance of last night’s pop can’t be underestimated. Last night, as shown on the chart above, silver punched a higher-high right in the face. When silver closes above $16.91, it will be official. A higher-high is desperately needed right now.
Coming in at 3rd so far this week to our community, but first in the eyes of the MSM, is the Dow. Here’s a question: Is the economy so great that President Trump Tweets random good economic news all of the sudden drawing attention to the only thing left standing, or is it so bad, that his advisers tried a push to get the Dow to punch through 22,000, only to fail? Trump Trade looks to be no more. Not to say the march higher in stocks won’t continue, but the man himself who trademarked this year’s performance can no longer perform:
Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!
— Donald J. Trump (@realDonaldTrump) August 1, 2017
In other commodity news, crude oil has been downright ugly, though copper has been consolidating since July 25, and with the commodity swings of the last week, Dr Copper seems to be keeping his cool:
In US dollar price action, we see that the dollar has continued to come under pressure against the major currency pairs, such as the Japanese yen, though the dollar has strengthened lately when compared to commodity-driven EM currencies such as the Mexican peso:
The dollar is coming to a point where, although in light of considerable downside pressure all year long, it appears to be set for another leg down, with perhaps a rebound from the constant bearish trends. Either way, those moves would likely demonstrate short-term price action since there is just no real data supporting anything except a decline in the greenback. It has been over 3 years now since the dollar strengthened in mid-2014, and the bulls are finding it harder and harder to make their case for a strong dollar.
Fundamentally speaking, the outlook is not good. We have been reporting lately on slowing to downright crashing of all major sectors of the economy. From weak precious metals demand for the first half of the year, to slumping home sales and crashing auto sales. Today ADP reported the latest jobs numbers, and if there was hope in the manufacturing sector, the hope has now turned to despair with 4,000 jobs shed.
On Friday we get the July Nonfarm Payrolls employment report, but in the meantime, we still have to make it there. Just in case some good old-fashioned jaw-boning is needed to talk the markets today in an effort to stave off economic woes, the Fed has a one-two punch of speakers hitting the circuit today, with Mester opening the show at 11:00 a.m. EST and Williams headlining at 3:00 p.m. EST. Looks like they have things under control today to their liking. But we would like to remind everybody that complacency can come back to bite. Just ask gold and silver.