Precious metals haters and naysayers have just been served with a “Golden Cross”. The window of opportunity to get physical at bargain basement prices is closing, and rest assured that stackers won’t let go of their gold & silver until well after the storm shutters have been pried open and the house has long since been rebuilt…
What a week in the metals. $1362 gold intra-day, and silver fighting it out until the very end.
We hoped to hold at reasonable price levels, and the gold and silver price action this week gave us a whole lot more.
First things first: We have a golden cross!!!
“Golden Crosses” are rare. They are also very, very bullish. Equally rare are “Death Crosses”. They are also very, very bearish.
A golden cross happens with the 50-day moving average intersects on the graph and “crosses” above the 200-day moving average. A death cross happens when the 50-day moving average “crosses” below the 200-day moving average.
A golden cross indicates that the average price over the last 50 days is now higher than the average price over the last 200 days.
Sure, technicals may or may not matter, and sure, the gold and silver markets are more manipulated now than ever, but golden crosses do matter because all they are doing is making a statement.
In the precious metals markets, gold’s even rarer sibling platinum just put in a golden cross on the daily:
Notice how there have been neither a golden cross nor a death cross in platinum all year. When they happen, they are game changers.
Here is a close up of the cross, which happened on Thursday September 7:
Sure, it may be hard to see, but there is no denying the significance. This is further confirmation that the precious metals bull market is on, and now, picking up steam in earnest.
We have, in what seems like forever, been waiting for silver to even approach the 50-day line.
There is good news in silver:
Silver’s 50-day moving average is finally turning up. When the golden cross happens in silver, the fireworks display is going to be bigger than ever! We are not out of the clear just yet, however. We stated on Wednesday that there is resistance at both $18.25 and $18.50.
The good news is that silver has held on to $18 here at the end of the day on Friday. We weren’t asking for much, just to stay above $17.70, so we’ll take it. With some consolidation early in the week and another surge yesterday, it is rewarding to consolidate in price here today. What a strong looking chart that daily is becoming. We are past the June highs, and in striking distance of major resistance.
To show just how strong the golden crosses and death crosses really are, look at the price action in gold:
Last golden cross in gold was on May 19, and price has been rising ever since. Shhh, not to let this cat out of the bag, but in the wee hours this morning gold was even over $1362 for a few minutes! That’s an intra-day high, but let’s not get ahead of ourselves. For now, we’ll take anything above $1350.
To put gold in perspective, we can zoom out a little and look at the weekly chart in gold (each candle representing one week):
Gold has been grinding out higher-lows and higher-highs, and as highlighted earlier, the volume of trading in gold, and we’re talking the heavily manipulated COMEX “paper” gold futures trading, has been increasing over the weeks since the start of the year. Unlike 2016, however, this gold bull is just getting warmed up, and the cartel will have a tough time smashing this one back without having to let it rise significantly. Could this be the run that finally does the cartel in?
Further showing we are not out of the clear is the price action in copper and oil:
Copper had a bad day, down over 3%. Crude was also down over 3%. Crude looks like it is forming a downward sloping bullish wedge on the chart, but crude has been very choppy all year. Copper, however, we need to keep our eyes on. This merits repeating: The entire Internet is one huge spool of copper wire. The high tech world we live in absolutely runs on copper. The world needs tons and tons of copper for our everyday lives. After Hurricane Harvey in Texas and Louisiana, and now Hurricane Irma staring down Miami, with Hurricane Jose in hot pursuit, it is not unreasonable to say there will be absolutely huge demand for copper once this hurricane season is over and the rebuilding begins.
It is also worth noting that the big drop in the price of copper today could very well have slowed the advancement in price of silver. Silver is money. Silver is also an industrial metal, and most of the production in silver comes as a bi-product of copper and other base metal mines. Softening copper prices can soften the silver price in regards to industrial demand on a day like today.
The stock markets are looking very exhausted. Yes we keep saying this over and over, but there is really no other way to put it.
Consolidation in the Dow and S&P continues in a slow drift to the downside:
If this market is going to new all-time highs, it better do it quick, because retailers are absolutely hemorrhaging red ink, and Americans are spending less on both the discretionary and the non-discretionary.
The dollar is in a disaster of it’s own. President Trump wanting to do away with the debt ceiling altogether can’t be good news for the dollar no matter how the MSM tries to spin it. Commodities to rebuild disaster-destroyed parts of the United States will cost more, and everything is going to “trickle down” into higher consumer prices.
In fact, the dollar hit a new low, again:
That nasty green line is the dollar index hitting new lows.
The chart, however, is the US Dollar/ Mexican Peso currency pair (USD/MXN). Today we post this chart to show just how massive the Trump Trade was, as well as the Trump Wall, “Nafter”, and all the other doubleplusgood “America First” strong-dollar memes.
The reality as we shift from summer to fall is quite telling us a different story. Summer is not quite over. The hurricanes tell us that. Autumn is a time of quite volatile change. The stock markets tell us that.
The dollar index is going down. It has been all year, and except for mainstream analysts with hidden agendas and exotic technical analysis, the entire world sees it yet has not come to terms with this reality.
The Dollar is weakening against the Mexican peso as shown in the chart. Remember, Mexico is, year after year, the number one or number two silver exporter in the world. Silver going down from here? I wouldn’t bet my last peso on it.
Next week is a full trading week, and gold and silver are poised to strike at their major resistance points. With a Fed by-week and most likely the cartel “saving ammo” for FOMC day on September 20th, “strike” might not even be the right word…