SD Midweek Update: After heavy pressure on Monday and into Tuesday, gold & silver are recovering, but is the worst really behind us?
Well, we’re halfway through the beatings!
The question is, do the beatings get worse from here?
For the answer to that question, we can look for clues in the economic events calendar for the rest of the week:
Wow, that sure is a lot of Fed Heads yappin’ about how they can just never seem to get close to their 2.0% inflation objective!
The Fed speeches aren’t the only thing we have to worry about for the rest of the week, however, because we get trade data on Friday, and, more importantly, the Jobs Report for September, 2019.
Of course, this is in addition to the Chinese markets still closed for Golden Week.
Interestingly, JC Parets said yesterday that the fundamentals should factor zero into a person’s trading, and I have conveniently started the video below to the time-stamp when we begin discussing the fundamentals:
Side Note: Join us for Silver Doctors Live today at 12:00 p.m. EST over on our YouTube channel.
Are there other clues that suggest more smashes are coming
Why yes, there are:
The cartel has taken a liking to the Friday Smash, and they have plenty of cover to smash this friday with the trade data, the Jobs Report, the Powell speech and more.
OK, “Hey Half Dollar, everybody knows past performance is not indicative of future results!”.
Good point, but with a well established trend and plenty of cover, would they really let a good opportunity go to waste?
I don’t think they would, so I think it could go down like this: We drift higher over today (Wednesday) and tomorrow, and just as everyone thinks, “oh, I’m glad that’s over”, BAM!
Friday morning smash!
And by mid-morning on Friday, just as everyone thinks, “oh, I’m glad that’s over”, BAM!
Friday afternoon smash!
So we’ll just have to see.
Of course, if this is not the case, then I would argue that the Fundamentals are more of a factor on these markets than the technicals right now, because the cartel has the technicals on its side, along with the inside information, but if for whatever reason, with unlimited paper contracts to short gold, with unlimited money which can be printed-up, and with time on their side, there really isn’t much of a reason for the cartel not to smash.
Furthermore, the Shanghai Gold Exchange, as active policy during Golden Week, 2019, will allow the gold price to open with the limit of an 8% maximum move in price when the SGE re-opens.
In other words, and generously oversimplifying this example, if the gold price closed at $1500, then the maximum gold price it can re-open, assuming price moves down, would be $1380.
On Wednesday morning, pre-opening bell, the gold price is back above $1485, so the cartel has plenty of flexibility in price along with a few days left to play around with their market rigging.
There is a bigger point here, however, and I’ll ask it as a question: Is China putting a floor under the prices of gold & silver as evidenced by the opening price change percentage limits policy in effect for Golden Week, 2019?
Since I don’t think the worst is behind us, I still think the GSR gets above 90 before the week is over:
Since the ratio is moving up for the right reasons for stackers, because of price weakness, stackers can buy silver right now at a cartel induced discount, and that means stackers can get even more free gold at the end of the cycle.
If we do fall below $1400, then $1400 to $1450 will be some pretty nasty resistance:
If the fundamentals do matter, however, we should be able to blow right through that resistance to the upside.
Silver has been briefly losing whole number support at $17:
My downside price target for silver has been $16.25, but since the SGE is allowing silver’s price to re-open at a maximum change of 10%, we could fall even further, but I think if the cartel takes the white metal all the way down to the allowable 10% drop, then there become concerns of deep-pocketed investors backing-up the truck.
Why would they not?
Silver, with very little premium, for under $16, in 2019?
Silver’s current price is not silver’s overall value.
Silver is way undervalued, and one day soon silver’s price will reflect this.
Palladium looks to be starting a nice, healthy pullback:
If the technicals matter, I’d like palladium to cleanly bounce off of whole number support at $1600.
Platinum, on the other hand, has really been driving the cartel mad:
From now until the cartel loses control, in my opinion, the cartel will treat platinum in the same way they treat gold & silver.
Check out how many of the last several days crude oil has been falling:
Any day now, I’m looking for articles talking about “short crude” being the most overcrowded trade.
Copper is in the process of double-bottoming:
I currently do not think we fall much lower than $2.50, and as soon a crude oil turns around, I think copper turns around too.
The stock market just can’t seem to stay above 27,000:
From a technical standpoint, it looks like a trip down to the 200-day moving average is coming.
The VIX is starting to perk-up:
We’re still not above 20, however, but that is an interesting gap-up.
Yield on the 10-Year Note Looks like it is resuming its fall:
People can currently lend to the government, for 10 years, at a rate that does not even keep up with inflation.
That’s what we call “negative real rates”.
You see, the actual interest rate doesn’t have to go negative if the rate of inflation is higher than the yields in the bond market.
In other words, we already have negative interest rates.
Finally, behold King Dollar:
The dollar bulls are pumping their chests right now about how super-duper strong the US dollar is, but is the dollar really that strong?
To me, the dollar has been held in an allowable range, and with some people making the leap that the US banks’ funding shortage of late equals a US dollar shortage, the dollar has been slightly bid-up at the margin.
The bottom line as we find ourselves here this beautiful first Wednesday in early October?
Gold & silver have recovered somewhat from last Friday’s and this Monday’s smash.
I don’t think the worst is behind us, however, ’cause there’s so much dang cover.
Why would the cartel let good gold & silver smashing cover go to waste?
I don’t think they’d let the cover go to waste, especially not right now.
‘Cause gold is at multi-year highs & silver’s price nearly hit $20.
Wouldn’t the cartel take advantage of any and all smashes?
So I’m also looking for the GSR to rise above 90 again.
To the stackers out there, this is a great time to buy.
Amazon has its own Prime Day for its members.
The gold cartel gives us a full week of sales!
That said, everybody’s short-term bearish.
So it will in fact turn around very soon.
I think it reverses sooner than later.
Still, silver for under 18, or 17?
That is one heck of a deal.
Fed wants 2% inflation.
They’ll get way more.
Which means gold.
Can protect us.
So can silver.
– 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.