3 Metallic Amigos and Their Messages

Gold is the star performer these days, as the entire world by now knows. But if the world is knee jerking into gold to any substantial degree because of this (you can click the headline for the story)…

…then the world is going to knee-jerk right back out again to that same degree. Luckily, there are plenty of non-hype (i.e. macro fundamental) reasons for gold to have crossed into bull territory. That crossing took place at 1378, which was the area of several highs over the last few years. Gold has hysterically jumped the creek into a bull market. So again, let’s hope that this Iran noise doesn’t screw it up too badly.

  • Current message: Hysterical, but impulsive and breaking ground to a new cyclical bull.
  • Future message: Counter-cyclical and possibly the earliest mover to a new inflation phase as it was in 2001, 2008 and in microcosm, 2016.

As usual with these larger futures charts, click them for a clearer view.

gold

Silver is much more normal as it lags its old fashioned dad who’s out on a bender. It’s a garden variety hold of support, pop on volume and short-term consolidation. It’s at a minor resistance area but the main one is above at 16.20. Some day I expect this under performer (relative to gold) to give us an inflation signal on the macro. But right now it’s T bonds and gold and a deflationary backdrop.

  • Current message: In failing to lead gold, counter-cyclical and/or deflationary.
  • Future message: If it remains bullish and takes leadership from gold one day it could be the next and most acute spark of a new inflation cycle (following gold’s creek jump), which central banks are trying their best to promote.

silver

Copper is one item that will take its cue from Silver/Gold. A lot of the cyclical stuff has been bouncing as gold ass launches. Thus far, a bounce is all it is. But if copper can take back 2.75/lb. and the 200 day average (orange) I’ll take it more seriously.

  • Current message: Counter-cyclical, inflation lacking.
  • Future message: Would help signal a future inflation-fueled, cyclical macro trade.

copper

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