SD Friday Wrap: Silver’s outlook just turned wildly bullish, and for a reason that most people missed…
Editor’s Note: The charts in this article were set-up around 11:30 a.m. EST on Friday and do not include price action after that time unless specified.
This has certainly been one wild week even if it’s not reflected in metals’ price action.
Check out silver wanting to finish out the week right smack dab in the middle of last Friday’s range:
Apart from being slightly up on the week, is it just me, or are we consolidating over time here?
Things, which in this case means silver, consolidate over time, price, or both, and since silver’s “price” consolidation is all over the board since early September, I think the “time” is ripe for the next rally.
The craziness of the week started off in the oil markets when trading opened on Sunday.
There sure has been some tense geo-political uncertainties lately, including the prospect of war with Iran.
The insanity wasn’t confined to politics, however.
On Monday, it was also becoming clear that the Fed “needed” to provide some emergency liquidity into the financial system by means of their intervention in the repo market, and that is exactly what the Fed has been doing, daily.
Oh yeah, and there was also that Fed rate cut thingy too.
Fundamentally speaking, this week has been super bullish for gold & silver, in part for the reasons I just mentioned, and I’ve been looking for the metals to rally, but they have not, and since the metals did not rally, the next rally is really going to be eye-popping!
Speaking of the fundamentals, we got some wildly bullish fundamental news for silver this week on top of all the other silver bullish news, and with so much focus on the Saudi attack, the JP Morgan gold & silver manipulation case, and the Fed, the fundamental news I’m about to share totally flew under most investors’ radar.
But it is no secret!
What was that wildly bullish fundamental news?
See for yourself, from Freighwaves:
One hundred thousand electric vehicles?
This global push to produce EVs, which apparently has now come crashing down on the United States like a tidal wave, is going to require a crap-ton of silver.
Simon Popple and I discussed the industrial use of silver just yesterday, and at the time of our recording, the Amazon news hadn’t even been reported:
OK, “Hey Half Dollar, this is a nothing-burger, and you’re making a big deal out of it!”.
Is it a nothing-burger?
Or could it be that physical silver demand at the margin is about to blow-up the cartel?
We know that the cartel will lose complete control, and while they may not have lost complete control just yet, they are certainly in the process of losing it.
And this isn’t something many years out, because in reading the article from Freightwaves, we learn these EVs will be operating on US roads beginning in 2021.
Take that into consideration, and then, for what it’s worth, consider what the LBMA’s Alchemist newsletter said about the use of silver in EVs in July, 2018 (bold added for emphasis):
The emphasis on these two dates is because they are among the keystones of government targets in a number of nations for the elimination of ICE. They do look somewhat optimistic, although the ground-breaking work at Volvo, targeting 2019 as the year in which all the vehicles rolling off its production line will be partially or completely battery powered, is a sign of things to come. Potentially more significant are VW’s far-reaching plans which will involve much greater volumes, although over a longer time horizon for implementation.
Why did I highlight this little snippet from the LBMA?
Because a 100,000 van order is no small potatoes, and the company, Rivian, which makes the delivery vans Amazon is buying, wasn’t even on the LBMA’s radar!
There is a point here: If physical silver supplies tighten, and if we continue to see implied increases in physical demand at the margins, then we could really see natural market forces imposing their will on the cartel much sooner than people are thinking.
For now, however, the pressure has been applied again this week, so I’d call that a great buying opportunity thanks to the cartel’s evil desire to manipulate markets 24/7, a manipulation which includes the constant price suppression of gold & silver.
The gold-to-silver ratio is still telling arbitrage investors to keep on buying silver over gold:
I think we’re ready to roll over here, for the reason that gold will be going up in price while silver goes up in price even faster.
It looks like someone gave this silver daily chart a wedgy:
Eyeballing the lines looks like we could be ready for the break-out if it is indeed a bull wedge with the up-slope beginning in late May and the down-slope beginning from the high.
Gold’s consolidation is super strong at $1500:
I’m sure the gold bull technical analysts are all kinds of nervous about gold’s 50-day moving average, however.
Palladium hit another record high today:
It would have been nice to see a stronger surge in price, however, because I’m not liking the unimpressive trading volume.
So far $940 is holding as support for platinum:
It looks like we’re going to avoid the nasty fall from the air-pocket down to $880.
I think crude oil’s chart looks bullish right now:
We’ve filled in gap, and we’ve consolidated for a third day, north of $58.
Copper, on the other hand, has fallen every day this week:
I don’t think we fall much further because I think the cartel needs a high copper price to bring more physical silver to market.
The stock market is just hanging around at the top:
I really need to get some more popcorn, and maybe one of those healthier air-poppers, because the show is about to start!
Apparently, investors think the Fed can just keep the stock market going higher and the VIX going lower, forever:
We were on the brink of war with Iran all week, and nary a concern in the stock market!
Yield on the 10-Year Note looks like it’s ready to start falling again:
With everything that’s happened this week, from the Fed’s interest rate cut to their daily market interventions, we might be in for some more wild swings.
I don’t see a break-out coming in the US dollar index:
People like to talk about a “US dollar shortage”, but the Fed has unofficially just launched QE4 to the tune of 10’s of billions of dollars, per day, and since the Fed has nothing but high praise for the US economy, all-the-while pumping $50 or $80 billion of fiat into the financial system, daily, does anybody really think they’re not going to print the US dollar into oblivion?
US Dollar shortage?
Besides, how do we know the Fed is not pumping even more money into the system unofficially, via dark pools and other various off-books accounts?
US Dollar shortage?
What’s the bottom line as we find ourselves here this beautiful Friday in late September?
The US markets and economy are literally in crisis mode, and they’re in it right now.
The fundamentals are exerting themselves onto the gold & silver “markets”.
Bullish fundamentals just keep on piling up, especially for silver.
So go ahead and use the analogy of straw &
We know what happens to the camel, but the straw?
Which straw will break the back of the cartel?
It will be hard to know which straw it is.
But the straws just keep piling up.
Amazon’s being the latest.
Demand at the margin.
We will know.
– 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.