SD Friday Wrap: The fog is clearing, and now we can see what silver’s been up to, and more importantly, preparing for…
This week had a little bit of it all when it came to the negative outlook for silver.
The anti-gold propaganda came as expected:
Here’s a Bloomberg anti-gold headline for the HFT algos:
You see, if the debt-based fiat currency Japanese yen is more attractive than gold, well now, it’s really more attractive than silver.
Yet silver shrugged it off.
The bearish sentiment is gaining traction.
Gold & silver analysts and experts are preparing for a move lower in silver, with the latest posted right here on Silver Doctors:
And that’s just one of plenty examples.
Yet silver shrugged it off.
America continues to have a booming economy.
Today included, the White House is pumping the economy and the US dollar again:
BREAKING: Kudlow tells CNBC: ‘We have ruled out any currency intervention’ pic.twitter.com/IO4hj3FuiA
— CNBC Now (@CNBCnow) July 26, 2019
Kudlow had nothing but praise for the US economy, and, more importantly, the strong US dollar.
Yet silver shrugged it off.
So what is going on with silver?
It is surprisingly simple: Silver is consolidating over time, and I think that time is almost over.
And I get it: It’s a paper sham on the COMEX, and they can move price wherever they want to.
They can, however, only as long as the physical silver supplies flow like the wine in France or like the Diet Coca-Cola in McDonalds.
However, I think the flow is losing pressure, and I think it’s losing pressure pretty quickly.
It looks to me like silver is building a base right here around $16.50.
A launch pad, if I may.
Because I think silver has much, much more work to do to the upside.
Here’s a look at silver’s base-building:
Notice how healthy that golden cross is, and notice just how obvious the break-out on the daily chart has become.
Can anybody really argue the bear case for silver right now, especially if you want to call silver’s price action a bull-pennant in the making?
Maybe in the near-term, with a test of support at $16 coming up, but I think any test would be short-term, and I don’t think anybody can argue the bear case for silver when arguing about the long-term.
Unsurprisingly, something equally impressive to silver’s break-out is the plunge in the gold-to-silver ratio:
That’s a greater than 10% move from peak to trough, and the move is really only getting started.
Gold is building a solid base of its own between $1400 and $1425:
If we do go down to re-test $1350, I think it would be early next week, into the Fed’s FOMC Meeting which culminates on Wednesday afternoon, but what if we only come down to test, say, $1385?
Palladium has bounced nicely off of whole number support:
It looks like we are about to bounce off of it again.
Platinum is showing signs that it’s getting ready to make a quick run to $900:
It might not feel like it, but year-to-date, the platinum price is up more than 8.35%.
Copper is down four out of five days this week:
Sitting right on its 50-day moving average, the outlook is kind of scary, but in my opinion, all we are really talking about is some more bottom-bouncing, and in understanding the underlying fundamentals, the outlook for copper is very bullish right now.
Crude oil looks to be set to put in a short-term double-bottom:
I think it will be a bear trap, however.
The stock market is in a holding pattern, and it will likely continue through next week’s FOMC:
Even with a rate cut, I think we could possibly see a “sell the news” sell-off next week, but then again, there are very few people who are privy to the plan.
And everybody knows ‘Ol Half Dollar ain’t one of ’em!
Or course, to maintain the stock market in a holding pattern, the VIX will probably need to get to an 11-handle:
Notice the 50-day diverging even further from the 200-day.
How can that be?
I do not think that yield on the 10-Year Note is bottoming:
There is a long way to go down in yield, and the downward pressure will remain until the bond market blows-up.
I have been wrong in my short-term call on the dollar:
With all of the “booming economy” talk and “strong dollar” rhetoric, I am now thinking we will get a melt-up in the dollar next week going into the FOMC, which will look awkward to say the least as the dollar will be strengthening into a Fed that is, loosening?
It’s all by design, however, and so far, everything up to this point’s been working as designed.
What’s the bottom line as we find ourselves on this beautiful Friday at the end of July?
Everything seems to be so normal right now with very little to fear or to worry about.
And there is very little to fear or worry about for physical gold & silver investors.
Because we’ve front-loaded our fear, ever since 2011, so we’ve been there.
Those who have their wealth tied to debt-based fiat currency have not.
Their fear and worry will be reactive, and it will be way too late.
We will soon see what this next “fear trade” looks like.
I think we will see it going into the 2020 election.
It’ll manifest in its digital form on Wall Street.
And also on the streets of Main Street.
Fire in the markets and the cities.
Because it won’t stop at fear.
It’s the death of the dollar.
It may just die quietly.
But the people?
– 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.