SD Outlook: Has gold & silver’s rally been put on hold with new found world peace? Here’s what gold & silver need to do to show the rally is real…
The war cycle is in line with the news cycle, and it’s even in line with the market cycle.
You see, when market negative news hits the tape, it could wreak serious havoc on the markets, and as such, it’s always best to have market devastating news, like, oh a war, happen on a Friday, wrapped up by Saturday morning, so that by the time markets open Sunday evening it was as if nothing had happened.
On Saturday I warned that gold and silver would be sold coming off of the “mission accomplished” news.
That’s exactly what happened.
They might even succeed in smashing silver back down below the 50-day moving average:
In fact, I’m expecting it.
Perhaps my negativity today is just what we need to get these metals turned around?
Now I’m not capitulating by any stretch of the matter, I’m just tired of people talking about all the great things President Trump has done, how by spending billions of dollars the U.S. doesn’t have by launching 103 missiles into a country Trump said was not our business to be in, and after everybody thinks President Trump has made American Great Again, just have faith in the plan, etc.
What I see are President Trump supporters getting sold down the river.
And I voted for him. I believed what he said because he actually said some truth bombs during his campaign. And he knows gold, and actually said good things about gold as he was a candidate.
I see Trumps supporters disillusioned as they’re getting sold down the river. You see, half the country was sold down the river on the Obama Hopium, and now it’s time for the other half.
But I digress, this is not political commentary but market commentary.
But it does have a point: What has been solved geo-politically?
Gold & silver feed off of geo-political tensions, yet we can go from launching air strikes on a Friday to selling gold & silver on a Sunday night because everything is all good now?
Even gold sold off last night:
The over all rally remains in place, however, and as weak as it may be.
I’m beginning to think we’re not going to see the metals rally until we get to multi-year highs.
It’s funny to think of 2016 as multi-year, but it is.
So in that regard, gold really needs to close above $1377:
Call it $1380 before the really really gets going.
Check out the volume on Wednesday. There were not many days with heavier volume. Also notice the increasing volume. It just goes to show how much paper they have to throw at gold to keep the price in check.
Anybody who doesn’t understand that these markets are manipulated, as in the price is suppressed, I recommend going to the U.S. Treasury Department website and reading for yourself the stated as a matter of fact public policy of intervening in foreign currency and gold markets, among other shady interventions they do not have to disclose.
I’m not convinced silver needs to break $20 for the rally to begin in earnest, however:
You see, gold has put in several 52-week highs over the last year, but silver, well, we know the pain of the sideways channel.
I think that once silver gets above $18, then the rally can begin in earnest.
It might begin if we can get above $17.50, but last April 17th we peaked out at $18.65 intra day.
For now, the extremely painful $16.20 to $16.80 range, and we’re right smack dab in the middle of it. So we’ll see.
Before we get on to the other markets let’s pause to look at some fundamental factors affecting markets this week.
First we know Trump is all about the fact that he already made America Great Again, even if I don’t see any real positive changes.
Our President is quick to point out that he’s doing great things:
Just hit 50% in the Rasmussen Poll, much higher than President Obama at same point. With all of the phony stories and Fake News, it’s hard to believe! Thank you America, we are doing Great Things.
— Donald J. Trump (@realDonaldTrump) April 15, 2018
Even if he is re-Tweeting Deep State Praise of him:
— Nikki Haley (@nikkihaley) April 14, 2018
But back on point.
There’s two parts to the collusion. One part is the government, and the other is the central banks.
So on the fundamental front, what to see?
Let’s count the first few days of the week:
I come up with seven.
And on Thursday/Friday:
There’s three more.
That’s an average of two Regional Fed Head speeches per day.
There’s a term called “Jawboning”, which means the Fed is on their “talking points” getting messages across to the makets in an attempt to move them and prep them in certain ways.
So fundamentally, between President Trump and the Fed, we have plenty of market moving rhetoric, as in stock market supportive rhetoric.
Back on track.
The gold to silver ratio is still stubbornly high:
It does look like a top is forming, and if the roll-over continues, than slowly but surely we’ll see the ratio come back down. For now, the arbitrage play is on.
Palladium looks promising:
A close above the 50-day moving average would actually be a decent way to start out the week.
Although platinum put in a “bearish engulfing” candle overnight and into this morning:
So what we are seeing is mixed signals in the precious metals.
Interestingly, as gold & silver were lower overnight, so was the dollar:
If gold & silver are the inverse of the U.S. dollar, one of them is wrong. We’ll see, but if the dollar is right, then that means lower gold & silver prices are wrong, which means we should see the metals starting to turn up.
If investors are all the sudden “risk on” this should start tuning up too:
That’s the yield on the 10-year and it goes like this: As investors see uncertainty and turmoil in the world, investors buy bonds, which bids up the price of the bond (and lowers the yield), but if investors no longer see any need in a “flight to safety”, then they would sell bonds which would bid down the price of the bond and bid up interest rates.
And if interest rates rise, that could wreak all kinds of havoc on the stock market, because the yield on the bond becomes more of a “risk-free” reward than the risk trade of investing in equities.
So we’ll see. We still haven’t seen the all-important, psychological level of 3.0% yet.
But for now the stock market is just trying to get up to its 50-day moving average:
I still wouldn’t want to be long this market, because it is still overvalued.
Interestingly, with all that has happened in the world, volatility of coming down:
However, if 20 is the new 10 like I think it is, we should start seeing volatility rise once again, and when it does, things could get interesting.
Finally ending with the commodities we see the outlook is mixed.
Copper has risen overnight and into the morning:
Although we’re still not out of the clear of copper’s roll-over.
But crude has faded overnight and into the morning:
Many are saying crude is fading because the fears of a large scale war are alleviated, but I would suggest that crude has been on the rise ever since last summer.
We put in a new high on Friday.
And that was before missiles started flying around, when our President even planted the seed of doubt that they would be flying around:
Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?”
— Donald J. Trump (@realDonaldTrump) April 12, 2018
Which serves as evidence to the fact that rising oil prices and inflation is a thing, and not a symptom of Syria, which started and ended all within the course of a week (from “chemical attack” to “mission accomplished”).
I guess what I can’t grasp is, and what somebody can hopefully get me to understand in the comments below, is that President Trump understands the concept of false flags.
So even if he was bombing Syria to appease the Deep State, why can’t he call it out for what it was?
I ask it in this context: What would be best for the country?
Bombing based on lies or facing the Deep State head on?
But I digress, It’s not my place to know politics, but rather, to know that politics has an effect on markets, and because we knew they would hit the metals on Sunday, so it’s like getting ready for a punch to the face. You know it’s gonna suck, but you still have to brace for impact.
Well see how this week goes.
If I’m right, we need about $30 in gold and $1.50 in silver so that the mainstream will understand that this rally is for real. If the mainstream finally understands the rally is real, it could start off the epic short squeeze of the silver specs everybody is looking for.
The question is how much paper will the cartel just feed into the rally?
If last Wednesday is any indicator, it will be a crap-ton.
– 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.