The Basement Arcade is closing, and the metals are about to come upstairs. Be ready or you may just miss them…
Last week was bullish for the metals, even if it was the threat of “thermo-nuclear war”, which, oddly, is barely in the headlines today. Granted, the senseless violence in Virginia last week is a tragedy for friends, family, and the nation as a whole, but if the nation was wiped off the face of the map?
As such, we knew the metals would come under pressure. Come under pressure they did on Tuesday with a nice smack-downs of silver and gold to begin the week. It has been hard for us to express excitement, because we have been let down so many times this year. The way the cartel attempts to paint the chart doesn’t help with this sentiment either. But, maybe now is the time we throw in the towel after so much negativity and turn bullish? And stay bullish.
Check out gold:
Since mid July, we have had eight days when gold made a $10 move higher. We are within $10 of $1300, and things sure do look good for follow-through momentum. We are certainly within striking distance now, and we could even sneak in a weekly close above $1300, but you can bet your bottoming-out dollar that the powers that be will pull out all the stops to make sure that doesn’t happen. Even so, gold is right there, right now, staring down $1300 and not wanting to take another punch in the face.
And silver? Silver had a great day, but look at the moves. Silver had an awesome catch-up to gold move at the release of the minutes. Even so, it missed out on another good thrust late in the day, so silver needs a good little run like earlier to catch-up once more, and it didn’t come.
Here’s the performance, with the dollar thrown in for poor measure. Which make us wonder, are they less about keeping the metals down and more about keeping the dollar up at this point? If so, that would explain this chart action:
Silver needs some thrust behind it. It has been hit hard as often as possible. But something interesting is happening. Silver has been having wild swings of late, and these are the signs that silver is not happy at the price level it is at. Recall that there has been very little consolidation all year with silver, and this game of pinball confirms that.
Silver is so pent up with energy, there is no natural state of rest in it. They either have to push down on the spring, but the harder they push down, the more pent up energy it gathers. When that energy is released, to which the Fed is trying their best to absorb, it will look like a 10-shot Roman Candle on the Fourth of July.
You will know the first ball is going to fly, you just don’t know exactly when or how far it will launch, and behind that ball is 9 more, and they are just as full of energy. That is exactly what we hope to see in silver price action:
Silver has closed above the 200-day moving average, and considering the strength in copper, and the strength in gold, we very well may be waking up to $17.25 or $17.50 silver. If you were timing your purchase looking for $16.25, that train may have left the station on us.
Bottom line: There is serious strength in the metals right now. We know the market manipulators are doing everything in their power to keep that strength from showing, because every time we find a reason to get bullish or optimistic, BAM! They knock us back. Over last week and this week however, yes, we have taken the hits, but guess what? BAM! Right back at them.
Finally, as shown in the copper post just a couple hours ago, we highlighted copper’s strong showing today with a fresh new high on the year:
Silver doesn’t just have to catch up to gold, but also to copper, as shown in the chart above. Once silver get’s going, everything will soon find itself catching up to silver, and before you know it, we will be kicking ourselves for not buying yesterday or today, and the naysayers will be saying something other than nay.