SD Outlook: Gold “sold-off” overnight to $1385 per ounce, yet silver is holding steady. Can the cartel even smash the paper price right now?
Last week everybody was like, “silver’s not confirming gold’s breakout, it’s a “break-out fake-out”.
But, if I may, could I suggest that perhaps this break-down in gold is a “bear trap”?
Because silver has held steady:
Silver has basically worked its way back to “unch”.
Here’s the thing: This is the most important week for the cartel so far in 2019.
Well there are now three dynamics that play into the cartel’s narrative, which are theoretically “bad for gold”, and if the cartel is able to, the reality is that it will shown with lower gold (and silver) prices.
First, there is the Fed interest rate cuts that everybody is expecting this month.
In and of itself, this is nothing new other than the silly debate about whether it will be a 25 or 50 basis point cut?
What is important about the rate cut dynamic is what happens on Friday.
But first, there’s Thursday.
Let’s get there first.
What is significant about July 4th from a market perspective?
This is a holiday-shortened trading week, and since this holiday is during a time when, theoretically, Americans are taking vacations, there will be less attention payed to what’s going on in the markets and more attention paid to fun-in-the-sun.
That said, this holiday-shortened trading week will likely show a lot less trading volume, and because of the light trading volume, this means that the “market” is less liquid and therefore it will be easy for the cartel to really “blow the stops”.
That means the cartel can sell less paper silver than it would have needed to sell in other, more liquid times, yet the cartel gets the same if not more effect of lower prices from the paper dumps.
On to the third dynamic: The Friday Jobs Report.
The jobs report is theoretically “bad for gold” following the mainstream logic.
Good, bad or indifferent, to the cartel, it’s always a reason to smash.
Well, if the jobs report is strong, as in “JOBS, JOBS, JOBS!”, then America really does have a “booming” economy, so who needs to buy gold with such economic prosperity for all?
If the jobs report is neutral, then it’s a “Goldilocks” economy right now, as in the economy is not too strong, nor is it too weak, but the economy’s just right, and this would be “bad for gold” because if everything is just right, then why would anybody make a move into a safe haven or put on a hedge against uncertainty, both of which would be good for gold?
They wouldn’t make such a move into gold.
In the eyes of the mainstream, a person wouldn’t make either of those two moves in this Goldilocks economy and so it fits the narrative justifying the cartel’s smash.
I don’t think this Friday’s jobs report (July report for the number of jobs created in the month of June, 2019) will fit either the booming economy narrative or the Goldilocks economy narrative.
Well, I think the narrative is being developed to fit with the Fed rate cut expectation.
If the jobs report is weak, which I think it will be, then the Fed, being part of the cartel, has additional ammo for actually cutting interest rates at the end of the month.
You see, right now the narrative is that inflation is still too dang low, which inflation is not, and another part of the narrative in favor of a rate cut, and from Fed officials themselves, is that it’s a type of “just-in-case-insurance-policy” rate cut.
Mix-in a weak jobs report, and imagine that!
I guess the Fed better cut by 50 basis points.
Or maybe even 100.
The bottom line for this week in the metals?
So far in 2019, this week will be the best opportunity for the cartel to really smash price.
And yes, the cartel would rather smash price than have to allow price to rise.
It’s simple: Gold holds the US dollar in check, so why would the cartel want to put a check on the US dollar when the cartel can just print-up and double-click into existence as many dollars as they want, for whatever they want them for?
The cartel would not want to put a check on the dollar.
So they won’t if they don’t have to.
Which means if the cartel can’t smash prices this week, maybe we really are at the end of the line for the precious metals price suppression as we currently know it?
I zoomed out a little on the gold-to-silver ratio to show the incredible opportunity in silver:
Blow-off top anybody?
The cartel would absolutely love to smash silver under $15:
That’s right there at the 200-day moving average, and imagine what that would do for sentiment ending the week with a 14-handle.
If the cartel is unable to smash silver, does that mean physical supply is tight?
I think it does.
They hit gold good, but I don’t think the yellow metal stays under $1400 for long:
Although the gap-down to start the week is impressive.
Platinum has opened the week on a high note:
Platinum has a lot of catching-up to do to gold.
Palladium is still just kind-of hanging out waiting for its siblings:
The longer palladium consolidates above $1500, the stronger the support it becomes.
This will be another interesting week for crude oil:
That sure is one long, drawn-out higher low on the daily chart, and while i’m bullish overall, crude oil is technically putting-in as second lower-high, so the interesting dynamics in crude oil continue again this week.
Copper looks like it could break-out to the upside here:
If the cartel is indeed low on physical silver, I would be expecting copper to rip higher as a way to incentivize the miners to mine more copper, which, by extension, gets more just-in-time physical silver to their fraudulent paper markets via the mining of silver as a bi-product of copper mining.
Of course, this will also be an important week for the US dollar:
Now that the Deep State Globalists of the G20 have all rehearsed their scripts and have their marching orders, I would be expecting some excitement this week in the dollar index.
If yield on the 10-Year Note loses 2.0% early on this week and stays there:
Then I would be expecting my call for a weak jobs report to pan-out as the “markets” further price-in Fed rate cuts.
The Fear index is actually gapping-down a full point to start the week:
On Friday I said this weekend would see more drama than action, and aside from the standard, perma-regional-geo-political tensions in the Middle East, that’s pretty much what we got, and so the VIX had a 13-handle.
The cartel could also ramp the stock market to record highs with minimal effort this week:
The same dynamics that apply to gold this week apply to the US stock market, only in the reverse.
Bottom line as we find ourselves on this beautiful day at the beginning of July?
This week is the cartel’s best opportunity of the year so far to smash price.
I am expecting it, and I’ll skip the dollar cost averaging and stack hard.
Because the thing about “flash” sales is that they don’t last for long.
If the cartel’s truly low on physical silver, which I think is the case.
Then there is not much more downside risk in silver’s price.
Therefore, I think $15 holds, but if price gets to $14.
I think it bounces back within days this time.
The cartel has plenty of cover to smash.
Even more so in gold, given its rise.
This week is very important.
As it may set the tone.
Going into the fall.
A bullish tone?
I think yes.
– 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.