“The Whole System Can Blow!” BIG Moves Ahead For Gold & Silver?

Play

dynamite“The Whole System Can Blow!” 
In This Week’s Metals and Markets, Doc & Dubin Break Down the Golden Sombrero, & The Mechanics of a Major Gold and Silver Price Raid-
Is the Trading Action Signalling a Small Correction Followed By Another BIG MOVE Higher, Or Are We Witnessing the Early Stages of a MASSIVE Raid That is Just Getting Underway?

 

Buy Silver Coins and rounds at SD Bullion

 

There’s never a dull moment in the precious metals market.  After last week’s show, we saw a flash raid on Monday, with silver taking the brunt of the assault, by design.  But the snap-back that followed was truly impressive, and a continuation of this same, ongoing pattern of both paper and physical buyers remaining in an accumulation mode, buying the dips.  Meanwhile, take a look at what oil and the S&P 500 were doing over the course of this past trading week:

SPX

 

wtic
wtic
The cartel loves to play with silver:

gold

 

 

Silver

While it’s not wise to draw too fine a point here based on just a single week of trading data, it is nevertheless interesting to point out that when silver led precious metals down on Monday with help from our friends, oil and the S&P 500, US benchmark for large capitalization equities, were both pushed higher in an attempt to recapture their respective 50 day moving averages and stem the previous week’s blood letting.  By Tuesday, it was back to the bleeding, and precious metals responded accordingly. 

Doc mentioned the correlation we have seen with the Japanese yen and gold (hat tip to Craig Hemke at the TFMetalsReport.com for doing more than anyone to unearth this relationship).  Well, this week, for whatever it’s worth, oil and the S&P 500 were moving in converse fashion to precious metals, and that is partly a reflection of both the deflationary forces coming out of financial markets and the responses that policy makers are launching to manage markets. 

I can’t prove that assertion (yet), but that appears to be part of what was going on this week, and the pattern visible early in the week carried throughout the rest of the trading week.  Oil trading was particularly suspect, with outsized moves to the upside, attributed to a weaker than expected US inventory build.  Tune into the show for more about this and the global macro context.

Next Week and Beyond

Doc and I started recording before the Friday market close.  As I write, we are deep into the after-hours session and we see a predominately sideways pattern in gold and silver.  That’s respectable, but nothing to get too excited about.  Cartel bastards are going to make an appearance early next week and attempt to capitalize on the modest fade in momentum. 

Despite that irritating nonsense, there is something to be said for silver having been able to muster flat trading after the attack, and gold having managed to turn in a tiny uptrend too for at least part of the post-attack trading day.  There even was accumulation still going on in Jr. miners as can be seen between the 12:30pm – 4:45pm EST time window. 

But of course — no surprise — the last fifteen minutes of trading has a higher concentration of institutional players executing trades, and it looks like some of the paper boys that were riding the momentum as a short-term trade cashed out some positions ahead of the weekend, and given an interpretation that the cartel is about to attack or, simply, that they also see momentum fading a little, the failure to see gold do anything to the upside after breaching $1250, etc, motivated some selling.  That they are exiting “hot” mining share positions is a good thing as it diminishes frothy sentiment and sets-up the next move higher.

gdxj-feb-26-2016

Given these trends and other factors, we are very likely going to see further pressure next week.  But the same snap back pattern we’ve seen play out many times in the past five weeks should manifest once again.  It will just take a little bit more time to assert itself given the ferocity of the precious metals take-down during the latter part of this past trading week.

On a totally different note, we should also start to see the zombified mainstream media forced to start covering news indicating that the Syrian “peace agreement” is nothing of the sort.  It might take longer than next week for that understanding to start to sink into the minds of the conventional financial trading world, but it will happen because American foreign policy is anything but what American officials claim it is – at least, those officials that are at the top and actually calling the shots.  At some point in the next two months, we’re going to start to see turmoil in the Middle East elevate in importance as far as direct impacts to the financial markets are concerned.  More on that during future podcasts.

Weekend Links

Enjoy the weekend!  — Eric Dubin, independent financial and geopolitical/global macro analyst.

Buy Silver Eagles SD Bullion