SD Friday Wrap: It’s been another tough week in gold, and now silver has broken-down below the sideways channel of pure agony. Here’s the details…
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Today we come to the close of the week, the close of the month, and also the close of the quarter.
It’s been ugly to say the least.
I’ll end on silver and then gold this week, but that doesn’t mean to scroll down!
Thanks for staying with me.
Let’s dive in.
I’ve been looking for a drop in the Russell 2000:
I don’t think that’s the last of it either.
I think the drop is only getting started.
Well, the “Heartbeat of America Index” as I like to call it, because it’s made up of small (not mom-n-pop small), American centric businesses, in my analysis, is about to start dropping even more so because come mid-July, 2nd quarter earnings reports will really start hitting the news, and investors will find out that American-centric business aren’t really booming like the Fed and their MSM propagandists are claiming.
For now, however, it’s all MAGA, so even possibly look for a bounce next week.
Well, next week American will be celebrating herself, and on Friday, we will all be celebrating the awesomeness that America has become of late.
You see, next week we get jobs data for June, 2018, and President Trump sure is happy about all these jobs that are being created:
I am in Milwaukee, Wisconsin, for meetings. Soon to leave for a big groundbreaking for Foxconn, which is building a great new electronics plant in Wisconsin. 15,000 Jobs, so great!
— Donald J. Trump (@realDonaldTrump) June 28, 2018
Granted, that’s not a Russell 2000 company, but think about this: President Trump is already touting job creation, this time, one week in advance.
Recall what happened last month just hours before the jobs report came out:
Looking forward to seeing the employment numbers at 8:30 this morning.
— Donald J. Trump (@realDonaldTrump) June 1, 2018
So the picture is already being painted that everything is booming in America.
Don’t believe me?
Well, here’s another Tweet from today:
— Donald J. Trump (@realDonaldTrump) June 29, 2018
See, our economy is BOOMING!
Furthermore, next week is the Fourth of July, the most American of all the holidays.
So, yeah: MAGA.
Which is why I think there will be a quiet bid, possibly by proxy, to make American companies either look good, or not look.
Holding on just another week.
It’s amazing how many weeks then can just keep on doing this.
But I digress.
Additionally, I think the stock market indices will get a little help from the VIX:
And since this is, in my opinion, as good as it gets, the same cartel that smashes gold & silver will be on their P’s and Q’s next week for sure assuring tranquility and complacency and a VIX, gracefully falling back to a 12-handle.
The timing and convergences of things next month is uncanny, isn’t it?
Now, I’m not trying to go all “the world will end on this day” in saying this, but isn’t if weird how just when things are looking best, BAM, two-by-four to the back of the head.
But I digress.
Yields have faded on the 10-year note as I opined they would:
We’re sitting below the 2.9% to 3.0% sideways channel.
What is one way you know the precious metals prices are suppressed?
Look at bond yields.
Then follow this logic:
- People looking for “safe haven” investments buy bonds.
- This makes the price of the bond go up while the yield on the bond goes down.
- People looking for save haven investments also buy gold & silver.
- So with falling yields, logically, gold & silver should be rising in price.
But they are not.
And that’s why we call it “precious metals price suppression”.
That’s just one of many ways to see if a drop in gold and silver prices is related to some natural “market” force, or due to the cartel’s hammer.
Check out this chart of the dollar:
Uh oh dollar bulls, is that a rising wedge I see?
Rising wedges are bearish.
We’ve got several more days to fill in the wedge, with a potential peak in the dollar at 95.5 if it is indeed a rising wedge.
And, since my call, as it has been for weeks now, is that gold & silver begin their rallies on July 9th, the rising wedge makes sense, because around that time we could see the breakdown in the dollar, which we would look to see if the metals are rising.
So we’ll see, but right now the evidence is mounting.
And no, it’s not just confirmation bias.
But I digress.
I hope it doesn’t end up being another day full of digression.
The commodities are a mixed bunch.
Copper is right at support, time now:
Call it support at $2.95.
We’ll see if it holds.
Copper could show continued weakness next week, at which point we would be looking for support at $2.90.
Crude oil surged this week:
We’re not at new multi-year highs just yet, in part because that November, 2014 drop was a big drop.
But look at that candle.
That’s a surge.
Crude oil is now above $74, and just like that.
In fact, the price of crude oil is up over 15% since the 15th of June.
Remember, there is a lot of geo-political turmoil right now with oil producing nations.
I would ask you to think about this, however.
If crude has been rising in spite of a rising dollar, what does that means for the price of crude oil once the dollar starts falling again?
Time to start thinking about all those tips to save on gas:
- Combining trips
- Walking when practical
- Not dogging it in the city
Those are three tips that don’t require $1 to be spent to save a couple bucks here and there on gas.
And while gold and silver are on sale right now, well, every dollar is progress towards stacking those ounces.
Back on track.
Palladium is just kind of hanging out right now:
Palladium is searching for a short-term bottom, but if the metals are going to be pressured next week, which I think they will, then we might not have found that bottom just yet.
Platinum, well, this:
Another fresh low in platinum today.
Again, if the metals come under pressure next week, I think I’ll post the weekly chart and look at platinum in terms of multi-year lows.
Yes, it’s that bad.
The gold to silver ratio has gone sideways for the last several days:
I really don’t think we’re making a trip back up into the mid-80s.
But if we do go there, and if my gold and silver call is correct, a rising GSR will mean that gold and silver will be on an extreme, blue-light special super-clearance door-busting Black Friday sale.
And especially silver, because that means silver will get hit even more so than gold.
I can’t remember when, but I did say to start looking for the keys to back up the truck.
Silver is attempting to get back into the sideways channel of pure agony:
Silver briefly got back into the channel at $16.22 today, but the white metal couldn’t hold on.
Up until this week, during our time dealing with the sideways channel of pure agony, if silver dipped below $16.20, it either immediately sprung back up, or silver recovered the very next day.
Not this time.
The cartel finally managed to get silver to crack.
Wanna know another way you can tell that gold and silver are subject to brutal price suppression?
Behold silver’s monthly chart (where each “candle” of the chart represents one full month of trading):
Don’t look at the price. We all know what happened there.
Rather, look at the volume.
Here’s a question: If nobody cares about silver, and if nobody wants silver, then how in the heck can you explain that massive increase in monthly trading volume over the last 20 years?
There’s no explanation for it.
Well, there is.
It’s called price suppression.
You see, the cartel can create unlimited fiat currency and issue as many paper contracts they need to limit price increases in silver.
Well, “Geez, Half Dollar, that means that silver will never rise in price because they can just do that forever”.
Good point, but no it doesn’t.
You see, believe it or not, there is actually some silver that must be delivered into the market.
Only if there was no silver at all could the manipulation go on forever, but it’s like a game of musical chairs.
The game can go on forever, assuming there are always unlimited chairs available, but since there’s not unlimited chairs available, eventually the music stops and there’s only one chair remaining, and the game ends after that.
One day, the music will stop on the COMEX.
Are we close to that day?
We probably won’t know until the day after.
The trading volume is telling us we are close to that day because the amount of paper the cartel must throw at the market to suppress price just gets more and more extreme as the months go on.
On Monday I said that as the week progressed, the death cross in gold would become plain as day for all to see:
Is that the bottom in gold?
Put in on the Thursday evening session?
I don’t think so, and I’ll get there, but first, we need a little more gold perspective.
There’s actually good news.
Let’s look at it on the gold monthly chart:
The trend-line coming off of the 2015 bottom is still in tact.
That’s good news, because we really didn’t want to drop any farther than we did this month.
There’s more good news: If we rewind the clock to 2011, we can see that July, even in the bear market, has treated us well over the last seven years.
There were only two years in which gold didn’t rally over the last seven, and those were the soul searching years of 2014 and 2015.
Do I think gold (and silver) will rally this July?
I still think we have more pain coming next week.
Let me explain my theory.
But before I do, let me say this – I look at the markets with a combination of technical and fundamental factors.
I began as a fundamentalist, learned the technical nature of markets, and I have fused it into what is my ever evolving worldview on the economy and markets.
We are always learning, are we not?
That said, the reason I think we’re going lower next week is fundamental in nature.
I have already talked about the BLS Jobs Report, but let me get more specific.
You see, I think we are at peak MAGA, if you can even call it MAGA.
That said, we will probably have another great jobs report next Friday.
The number of jobs
lied about created as shown in the report is not what matters, what matters is that for about every 9 out of 10 reports, the cartel is able to strong-arm gold & silver and bring on the pain.
With regards to the report, the MSM propagandists will spin the report to fit the narrative.
In other words, the BLS Jobs Report is just another reason for the cartel to smash.
So I do think the cartel will smash next Friday.
But, in reality, they could smash all week long.
You see, we know about the COT report day smashings, Tuesdays, so we could see pressure in the early week, and then Wednesday is July 4th, and markets will be closed.
The prior federal employee in me understands that those well paid individuals with time-off will be taking next Wednesday, Thursday and Friday off, and trading volume is already down as it has been over the last couple of weeks, and if I’m right about next week being party-mode on, the trading volume will really be down next week.
The gold & silver charts already look terrible, but with light volume the cartel doesn’t need to exert as much sheer force to cause the price to drop.
Will we go much lower?
Well, now we’re gettin into the technical, and my thesis is fundamental in nature for why I think the rally won’t begin until July 9th, and I have yet to establish downside price targets since gold blew through my downside target at $1260, and since I got the direction wrong this week on Monday, but I did says I fuse the fundamental with the technical, so let me do so now.
Let’s start with silver.
Silver has more room to run to the downside before screaming “oversold”:
We’re nowhere even close to the oversold levels we were at even last year, and silver was up over 5% on the year.
My point is that silver can be sat on hard here before screaming “oversold”.
The price floor is in part determined by the price of crude oil, but on a very short term basis, like one week, we can throw the “the oil price puts a floor on the metals” out the window because one week of lower silver prices in the wake of rising crude oil prices will not make-or-break the miners.
So as you can see, when we fuse together the technical analysis and the fundamentals, we can get a better picture of what is going on to better understand the markets.
I’m just trying to keep it real.
Gold is more oversold on the daily chart, but:
We got a slight bounce today.
Moreover, we’ve been at these levels before, and we are not even at the uber-extreme oversold level like we were in mid-2015.
So while gold is screaming oversold right now, we must blend in the fundamentals and ask, is this one of the “it can last longer than you can stay solvent” kind of moments?
I think it is.
It is always in the cartel’s interest to smash, and they are going to have one heck of an opportunity next week to do so.
And here’s another fundamental reason why they will smash: Everybody is ready for the bottom.
Look at all the veteran investors and traders all around talking about the “sentiment index”, and “we’ve got a bottom here”, and all that jazz.
I mean, Ol’ Half Dollar said he thought the very smart trader Michael Ballanger was wrong on his call, and he was.
But think about it: Some of those traders and investors likely opened up positions in gold and silver this week.
Especially the dunces who don’t understand that the markets are manipulated.
And just like that, the cartel comes in, and BAM!
Down comes the hammer and into the accounts of the cartel goes some easy profits.
Is there any hope at all?
Why yes, there is.
But if you’re counting on a rally next week, well, I’m saying don’t get your hopes up.
I think the cartel will come in with another week of pain before being forced to retreat somewhat and let the metals rally.
On the bright side, this is great news if you’re a buyer.
– 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.