By: Adam Hamilton, CPA, Zeal Research - 21 February, 2020
The bottom line is gold’s surge this year has been very peculiar. It mostly hasn’t been driven by gold’s usual dominant primary drivers of gold-futures buying and investment capital inflows. The gold-futures specs have been largely fully deployed continuously, their buying firepower tapped out. And investors haven’t been materially buying either per their leading daily proxy. GLD’s holdings only rose modestly.
While $1600+ gold is certainly exciting, gold needs sizable sustained capital inflows to keep powering higher in major uplegs. If that can’t come from exhausted gold-futures traders, and isn’t coming from normal gold-investment channels, gold’s staying power up here is questionable. Asian gold investment demand on coronavirus fears is likely what has forced gold higher, but it is unclear how long that will persist. Full Story
Just a quick update on the Yen / PM combo we’ve been following. Today the yen is moving lower in its new impulse move to the downside doing away with the positive correlation it used to have with the PM complex. While the yen is moving lower more PM stock indexes are breaking out to the upside. I just wanted to post this combo chart early so you can follow the breaking out and the backtesting process in real time. Full Story
By: Steve St. Angelo, SRSrocco Report - 20 February, 2020
Unfortunately, I believe the world is seriously underestimating the situation that is unfolding in China and soon the rest of the world as it pertains to the Global Supply Chain. Watch over the next 2-4 weeks to see if the Global Supply Chain comes under more stress. If the situation continues to worsen, this will cause more stress in the financial markets and economy, forcing more investors into owning physical precious metals. Full Story
One needs to keep on booking profit as long as gold does not break $1633.80 and silver does not break $1882.90. There is a big technical resistance between $1633.80-$1648.50 and $1663.30. For gold to rise to $1900-$2000 for the rest of the year, it has to break and trade over $1633.80-$1648.50-$1663.30 zone. Why am writing this? This is always a slip between the cup and the lip. The Lip here is the long term key resistance. The Slip here is the chances of sharp correction in case gold and silver do not break past key long term resistances. Momentum and trend is all very bullish for gold and silver. But still some prudence is needed to prevent biases. Full Story
The Russian government is looking at giving $1 billion in funding from the National Well-Being Fund to help develop the Arctic Palladium project in Siberia, reports Interfax. The project is a joint venture of Norilsk Nickel and Russia Platinum. This is part of Russia’s plan to be the world’s top platinum metals producer, reports Bloomberg. Russia’s biggest gold miner, Polyus PJSC, is focusing on smaller projects and cutting its debt ratio before starting work on Siberia’s Sukhoi Log deposit, which accounts for more than a quarter of Russian gold reserves. Full Story
By: Keith Weiner, Monetary Metals - 19 February, 2020
What does this mean? Well, trading is more expensive for anyone looking to get into and out of silver metal. And the proximate cause is that the market makers have pulled back. We do not say “pull their bids” like the conspiracy theorists. It is not the job of the market makers to support a falling market. We say pull back, meaning both their bid and their offer are less aggressive (i.e. lower bid and higher offer prices).
We would expect widening spreads to cause / be caused by lower volumes. Whether we get rising prices or falling prices, as a result of this, remains to be seen. Full Story
Over the last few weeks or so I’ve been writing a lot on the critical inflection point the PM complex was showing us. Today’s price action is an important step in confirming the potential bullish outcome. There is still more work to be done from a longer term perspective but its one step at a time until total confirmation is attained.
Lets start with the daily line combo chart we’ve been following very closely which shows many of the smaller blue trading ranges that are breaking out today. As you know I’ve been looking for one more decline back toward the bottom of the August 2019 trading range to complete a possible 4th reversal point. You can use the HUI as a proxy for the rest of the PM stock indexes which shows where the possible 4th reversal point would be... Full Story
Gold broke past $1600 after World Health Organization had cautioned there was not yet enough data to know if the epidemic had slowed. World Health Organization (WHO) Director-General said Chinese data “appears to show a decline in new cases” but any apparent trend “must be interpreted very cautiously.” Russia said it will suspend entry of many Chinese citizens.
Corporate profitability will be affected. Apple is just the beginning.. Full Story
Nothing seems to be getting in the way of the melt-up. Not even coronavirus now COVID-19 has knocked it off its upward climb except for a few brief days. Maybe this time it is different. Well at least that is what they always say. Except it isn’t.
The same themes present themselves over and over again. The central banks are going to save the world. And we can grow debt, debt, debt and there are seemingly are no consequences. That is until there is. Now we discover in our “Chart of the Week” that Greek bonds yield less than U.S. bonds. What you say?
Our recession watch spread remains positive. No signal of recession but we can’t help but note that parts of the EU are falling into recession. So is Hong Kong and who knows what happens with China and the COVID-19. Full Story
In this update we are going to review a small but important range of commodities / lead indicators which strongly suggest that the seemingly endless bullmarket in US equities is living on borrowed time and will end sooner rather than later, and given how long it has lasted and how extremely overvalued it has become, the downturn will likely start with a crash phase.
Regardless of what the eventual impact of the Coronavirus epidemic is, US stockmarkets in particular seem to be in a state of denial about the actual real-world consequences of the Chinese shutdown and impact on the global supply chain and corporate profitability everywhere, and some elements even seem to be gloating about China’s misfortune and predicament, completely oblivious to the fact that this is going to have a negative impact on almost everyone. Full Story
And, should we see the market blow through the 156 region, the 154 level will become our next higher support level. However, if we cannot blow through that region in the coming months, then we may be in for more bearish action in the metals in 2020. So, as you can see, that region will represent a very important next test for the bull market off the late 2015 and early 2016 lows in the complex. Full Story
By: Rick Ackerman, Rick's Picks - 18 February, 2020
Ordinarily the arse bandits who work the night shift tend to let stocks fall hard on Sunday night when there has been disquieting news over the weekend. Their strategy is to take prices down low enough to dry up sellers, making it easier to run stocks back up the old wazoo after the bombed-out opening bar. This can be a tricky engineering feat, but it invariably succeeds when DaBoyz flip the switch to send short-covering bears into a full-blown panic. In this case, though, at the opening bell, the pros will be hard-pressed to predict the exact extent of the FAANG selloff about to unfold. But once it begins they’ll need to let it run its course and bring the broad averages down even lower in sympathy. Full Story
Ability/inability of spot gold to trade over $1600 will decide the trend for gold for the next three week’s. Right now the trend is bullish. Silver will break free from $1740-$1810 trading range and form a new range. Copper, crude oil and nickel, boom or bust two days ahead. Right now trend is bullish for copper and nickel. Full Story
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