SD Midweek: There is a bright side. Here’s the details…
Believe it or not there is great news:
The cartel is giving us the gift of silver this Christmas!
How nice of them.
The gold-to-silver ratio (GSR) is now about as out of whack as it has been in recent time. This means that silver is exceptionally undervalued not just in general, but also to gold directly.
Extremes like this can’t last long, and as shown in the chart above, they don’t.
Here’s a look at the daily beatings in silver:
I didn’t draw the down arrow on the overnight action, but I just as well should have. Price looks to be rolling over yet again.
The daily shows just how brutal silver has taken it:
We have basically fallen for days on end. Sure, technically speaking, Friday gained a penny, but it’s basically a straight line down. On the left side of the chart is the $15.14 low. Are we going to break through $16 to the downside and trade with a $15 handle? How low can silver go?
If we do break-down below $16, I’m backin’ up the truck, and I’m making this decision based on the GSR, a climbing price of oil, and inflation that we see all around us. I don’t buy for one second this is just where the natural price is for something that is so precious that only a few people can have it.
And that’s where the problem is for the cartel right now. They’re literally in a box. If they are going to flush out the specs, royal flush style, here in late 2017, and knock the price below $16, if there are even a few people who have the same line of thinking as I do, the cartel runs the risk of running through their entire supply of physical silver.
Gold is battling the 200-day moving average yet again:
Although the yellow metal has held up much better than silver over the last couple of months (which is one of the reasons the GSR is so out-of-whack).
Platinum has completely broken down once more:
All of the hanging in there over the last couple of months has been given right back up. To think, just last week we were talking about putting in a close above $953, and platinum, like silver, is now as risk of losing whole number support.
Platinum really does highlight this sheer desperation and ultimate wipe-out of the speculators and anybody but the die-hard stackers who know what this last month of the year means just like it has for several years now.
Even palladium, the precious metal performer of the year, is under pressure:
I wouldn’t go calling for a trend change just yet, however.
Copper, on the other hand, took it hard yesterday:
There is support between $2.90 and $2.93, but are they really going to crush copper outright and run the risk of losing the silver byproduct mining?
Crude looks to be in a flush of it’s own as it breaks down below $57:
But is is still $25 higher than where it was over the summer. Which brings us back to the point with silver. The price of silver has been coming down over the past several months, yet crude has been going up. Either crude is going to come down crashing again or silver is going to have to rise in price because selling under the cost of production can only happen for so long.
The dollar is by no means strengthening during this precious metals royal flush:
For several days now the dollar is range bound between 93 and 94.
Here’s a question: When the dollar breaks out of this range, is it going to get stronger like it has been strong since mid-2014?
I don’t think it’s getting stronger from here, which brings us back to an interesting point about the metals. We are seeing this royal flush in the midst of a dollar that is not even strengthening. In other words, once the dollar continues it’s move to the downside, this will act as a propellant for the gold & silver rocket.
The yield on the 10-year ended right smack in the middle of the range we have been following for months now:
This whole “wait and see” on yield is going to come to an end here very soon. Next week is make it or break it for the Fed, and all eyes are already on them and expecting them to tighten by a whopping 25 basis points.
If past is prologue, that means we should be bottoming out the day after, meaning December 14th, but everybody already knows this.
In other words, the “rate hike” is being priced into gold and silver right now. Thinking that we are going to see considerable downside pressure up until after the 13th FOMC press conference could end up being a timing error.
Besides, this is starting to perk up:
And while “fear” in the market remains a farce, the uptrend over the last couple of weeks is there.
Speaking of farces:
But what should we expect?
Because on Monday President Trump made clear by order of precedence just where his loyalty lies:
With the great vote on Cutting Taxes, this could be a big day for the Stock Market – and YOU!
— Donald J. Trump (@realDonaldTrump) December 4, 2017
It’s not with me or you, but with Wall Street. In other words, greed before making America great. That can’t end well.
Speaking of something that’s not going to end well:
Don’t go tryin’ to catch a falling knife.
Finally, one more thing to keep in mind: Nonfarm payrolls on Friday. Besides FOMC day, the jobs
lie report is the other day the cartel loves to smash.
However, gold and silver are already knocked out, unconscious and on life support. So I suppose they could pull the plug if they want, but that could end up being a grave mistake for their paper precious metals price suppression scheme.
– Half Dollar