SD Friday Wrap: It’s been an ugly day for gold & silver, an ugly week, and an ugly month. Yak Woman at the state fair just got some competition…
Editor’s Note: There will not be a market outlook posted on Monday. Also, if you have not done so, please carve out some time to read this robust argument on why the US and Mexico are preparing for hyperinflation in Mexico.
There’s really no other way to explain it, and since nobody wants to be around ugly, this market recap will be short.
No sense in sugar coating it either.
People say if you don’t have anything nice to say, they don’t say anything at all.
Good thing I don’t listen to the people who say that, or this week’s SD Wrap wouldn’t have any words.
Not that words are needed this week.
The charts really speak for themselves.
So let’s dive right in to some pretty ugly charts, and since it’s all ugly this week, that pun was not intended.
The gold to silver ratio reflects the ugliness:
When we had gold & silver coins, you know, Constitutionally, it only took 16 ounces of silver to buy 1 ounce of gold.
Today, it takes over 80.
It seems we have a new Sideways Channel of Pure Agony in silver:
I drew the channel between $14.50 and $15, but really I could have dropped the overhead resistance because it is nowhere near $15. We can’t even stay above $14.80 for any length of time.
So much for that short squeeze in silver.
So much for the margin calls.
So much for the forced liquidations.
It’s just been one of those weeks when there is so much going in silver’s favor yet the white metal can’t even get back above $14.60.
Silver is down for 11 of the last 12 weeks:
It’s easy to see how silver investors are frustrated on the weekly chart because those eleven weeks are after the breakdown. In other words, after spending nearly the entire year so far going sideways, we have done nothing but go lower for 11 of the last 12 weeks.
It get’s worse:
Silver is now decisively below a very long term moving average, the 200-month moving average.
Moving on to gold, we see that the yellow metal isn’t much better.
Gold tried to get through $1220 earlier in the week, but failed, and hasn’t even come back to retest it:
That’s not good.
Recall I discussed how there is usually a test of resistance first, and then a few attempts to either punch through the resistance or fail. Well, the yellow metal couldn’t even make one attempt to punch through resistance.
After putting in a respectable candle last week, gold show no signs of the turn on the weekly:
There is zero indication of a new uptrend on the weekly, so we can only assume that, for the time being, gold is resuming its fall in search of a bottom.
Gold is down for a fifth month in a row:
Gold is also below a major moving average, the 50-month moving average.
Palladium has found some make-up and is trying to look pretty:
But keeping true to my general feeling of pessimism and negativity, I will say that palladium needs a pullback here, because, in general, the metals have not started to rally, and palladium will be out of gas in no time if they do start to rally.
Platinum can’t stay above $800 for the life of it:
Since Monday, it’s been a total stalemate in the trenches.
Copper finished the week down for the last three days:
The technicals even look like they are breaking down again.
Crude oil is above its 50-day moving average:
But notice the low volume and the and the unimpressive candles.
Here’s an ugly that will surely get to jump to the front of the plastic surgeon’s line:
Because all of the other major indexes have hit fresh all-time highs, but not the Dow.
I still think it will hit fresh all-time highs.
If you see the Dow hit 26669.11 next week, don’t say I didn’t warn you of what that means.
Shifting tone, we can now move on from “ugly” to “meh”.
The VIX doesn’t have a care in the world right now:
Complacency in the US reigns supreme.
The dollar looks like it wants to spend some time range-bound between 94 and 95:
Aside from the pop in mid-August, in a sideways channel is exactly where the dollar has been.
Yield on the 10-year note is in it’s own sideways channel:
After the initial run in the first part of the year, we’re basically right where we were when that run ended.
In other news, the markets are closed on Monday for Labor Day.
I’ll sum up my feelings right now in one word, and then I’ll move on.
Since there will be no SD Outlook on Monday, let me say something short and to the point about the upcoming week and month –
Next week we could see some smashing in gold & silver.
The cartel loves holiday shortened weeks.
At the end of the month, we have the September FOMC.
A September rate hike is pretty much baked in the cake, so I don’t think there will be much movement around this one, unless, for some reason that the Fed doesn’t hike, or if Powell sticks his foot in his mouth at the presser.
So I’ll cut my recap of this week’s market action right there.
Writing my argument to why I think the hyperinflation in Mexico has begun has zapped my energy. I had been thinking, researching and losing sleep over it for days, and like I said in the comments of that post: I really do think it is the most important thing I have written in some time. My argument is long, but to say that Mexico is in the early stages of hyperinflation, that is not something somebody can just say without providing a compelling argument.
I think the argument is very compelling.
Carve out some time this weekend to read it.
I’m not even going to end this post with any optimism.
To the month of August, 2018, good riddance!
– 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.