SD Friday Wrap: Monday we said every inch on the chart would be hard fought, and was it ever, but gold & silver eked out tiny gains. Here’s the details…
Rant on –
Look, I get it. Everybody’s sentiment is down in the gutter, so there we are down in the gutter making friends with that clown who is down there too, and It’s feeding off our fears of this continuing, agonizing sideways drift. This is extremely painful in light of all the reasons we should all be bullish on gold & silver right now. But this week, we can barely even call this progress baby steps.
– Rant off
These days are blurring together with the price action and it is beginning to tell one from the other. That said, one day this week I said somewhere that the gold to silver ratio could very well make a run to 85.
At above 83 man-oh-man did we come close:
Let this sink in for a moment:
The gold to silver ratio as it comes out of the ground is 9 or 10 to 1
The historical ratio is somewhere between 15 or 25 to 1 depending on time period and country (15:1 in the U.S.)
The average over the last century and especially the last several decades is somewhere between 40 and 50 to 1
Yet this week, it took over 83 ounces of silver to buy one single ounce of gold.
No wonder – Open interest on the COMEX has never, ever been higher than it is right now!
What is it that governments and central banks and the global elite fear more than any single thing in the entire world?
Darned right it’s silver, or else they would not be lashing out in sheer desperation.
But that’s the thing – Truth prevails. Good prevails. Honest money prevails. It is a losing battle, and they know it. Perhaps the prolonged agony is to allow the global elite to shift funds to physical gold & silver while they still can, and geez do they have a ton of paper wealth to burn though, but they can’t do it quickly or else supply would seize up and gold & silver would go into hiding.
I do understand that is what is coming. It’s in hiding right now. All of the stackers from all of these years are holding on, with strong hands, and we’re not willing to let it go until the price is much, much higher.
So it’s like a race against time, but one that can’t go to fast because the global elite, the cartel, governments and the central banks already know the jig is up.
They’re just not telling anybody. They wouldn’t. Who would admit they are destroying the monetary system?
But i digress.
I’ve put silver’s tight range back on the cart again today:
We’re stuck on the lower end of the range right now, as we have been for the last several days.
There’s two ranges we’re watching. The broader range is $16.20 to $16.80, and the tighter range is $16.40 to $16.60.
The cartel is absolutely stuck right now.
All those spec shorts need to cover. If price drops below the range, which even my dog can see, then that would unleash an epic short-squeeze and who knows how high price would shoot up?
I mean, what, is the cartel really just going to do nothing other than feed paper into the short squeeze with open interest already at record highs?
On the other hand, if price breaks out of the trading range, then that will also unleash an epic short squeeze because traders will be covering as quickly as they can to cut their losses wherever they can.
So what is one to do?
Keep silver in a range as tight as possible. It’s really starting to look like the freakin’ VIX throughout all of last year, but what happened when it just wouldn’t stay under 10 any longer?
That’s right – traders blew up, certain ETFs blew up, even entire hedge funds blew up.
That’s what I’m talking about here folks. I can’t tell you when it’s going to happen, but I do know it will happen. It’s only a matter of time, of which I think there’s very little time left.
On the weekly, we can see just how small of a gain silver eked out:
We are talking 1/2 a penny, as in $16.34 last week vs $16.345 this week.
Let the absurdity of that sink in: Half of one penny.
We can basically call it “unch”, which in trader talk is short for “unchanged”.
Gold has been performing better, and is even positive on the year. It just goes to show you that no matter how hard the cartel tries, they just can’t keep the truth from coming out.
So on the weekly, we see gold’s trend is pretty clear:
If we rally from here, then we have continuation of the series of higher-lows and higher-highs, on a long term cart. We could even take it back all the way to the rally coming out of the December 2015 bottom if we wanted too. I left the bottom on the chart just to let it sink in where we’ve been, and also where we’re going.
Even on the daily we see gold hanging in there:
Gold is back above its 50-day moving average, and although it has been ugly, gold is riding the average now and looks poised to rally.
Things will really start to get interesting once silver turns the corner and begins to lead gold in terms of performance.
It’s like they say: There’s no fever like gold fever.
Looking at the other precious metals, its’ been downright nasty.
Platinum’s chart looks terrible:
If platinum keeps falling its 50-day moving average is going to catch up to the 200-day in a hurry.
Did the bleeding stop today?
Hopefully it did.
Palladium, on the other hand, well, palladium is not doing well.
Palladium, recall, was the MVM in 2017. That is to say, Palladium was the “Most Valuable Metal”, think a sport’s MVP, and it really showed upside potential.
But palladium has fallen every single day this week:
Palladium can’t catch a break for the life of it.
We knew sentiment would get crushed if palladium lost the support of the 200-day, but I don’t think anybody imagined it would get this bad.
In fact, don’t shoot the messenger, but palladium is now officially in a bear market, meaning from the top at $1133 to today’s close around $896, palladium is down more than 20%.
And that’s all happened since mid-January.
Moving on to the commodities, there is a lot of positioning and re-positioning going on, and as such, the markets are having a hard time of making sensed of things.
Copper is riding the 200-day moving average:
Although that is looking like a long, drawn out topping process, so we’ll be watching copper closely.
Crude is holding up better but is also riding a moving average:
Interestingly, if crude rallies from here, we would have solid confirmation of a bullish trend with a series of three higher-lows and three higher-highs.
Left on the chart is the lows from last summer to remind everybody just how far crude has come. If this protracted consolidation, just like most everything else we’re following, is preparing for the next leg up in the case in crude, does that mean that we’ll be floating between $80 – $85 per barrel?
It would not surprise me one bit. In fact, I’m expecting it.
Looking at the dollar, we can see we’ve got a sideways channel and range developing in the greenback too:
Let’s call it a sideways channel between 89.50 and 90.50.
But the range is where the similarities end, however, because unlike gold & silver’s next leg, the next leg in the dollar looks to be down.
Not only that, but the dollar is now at the top resistance of the channel. Will a trip back down to the low end of the range fall through the support and usher in the start of the next down-leg?
We could know as early as next week the answer to that question.
Speaking of ranges, an interesting thing has developed in the bond market:
Bonds have rallied, meaning the prices of bonds have gone up, and the interest rates paid on bonds, such as the interest rate on the 10-year Note shown above, have gone down.
We fell through the 2.8% to 2.9% range yet again today. In fact, looking at the yield on the 10-Year, it appears yield is rolling over.
Hmmm. We’ll have to keep our eyes on the bond market too then because if the bond market is rolling over and rates start heading lower again, that would be good for gold. As said earlier, right now everything is good for gold (and silver), but in the most mainstream of senses, falling yield is good for gold. That said, we need to be on the look-out for gold hit pieces from the mainstream financial propagandist press if yield falls even further next week.
The stock market as shown by the S&P 500 looks downright sickly:
Losing the support of the 200-day moving average would be very bearish.
And the Dow Jones Industrial Average looks sickly as well:
But here’s the thing – We don’t know what the ESF and the Fed, taking their marching orders from the global elite, and being the same cartel we talk about day in and day out – we don’t know what they have in store for us.
Something about a big club that we’re not in?
So we can only assume:
They want the market to fall and are attempting to do it “orderly”
They want the market to rise and will step in and support it as such by selling volatility, buying the indexes, and naked shorting gold & silver
There are two or more camps duking it out to control the narrative – one which wants the markets to rise and one which wants the markets to fall
Just like with the predicament of a break-out or break-down in the range of silver, the cartel is really in a box here with the stock market.
This leads me to understand that there’s no pleasant scenarios that could unfold in the broader stock market and the economy in general.
Speaking of volatility, I’ve been saying that 20 is the new 10 for a while now:
And the VIX is straddling either side of 20 in its own sideways channel.
One thing that is not in a sideways channel, however, is Bitcoin:
That’s another leg lower just today, and the price for a piece of code on the distributed ledger is now well below $7,000, so there’s no reason to expect a trip down to the $5,000’s very soon.
I won’t get into all the flaws, frauds and falsities of that which is Bitcoin here, just check out our Bitcoin bubble tag for all of that.
No sense in bringing my keyboard that much closer to the end of its average keystroke count over a digital nothing.
I’d rather use those strokes to put in another order for some shiny phyzz, and as has been the case all year, it would be for the white metal, not that I got something against the yellow, but because I understand the GSR is extreme and unsustainable.
– Half Dollar