Gold: Counter-cylical Amigo
Silver: Counter & Cyclical transvestite Amigo
Copper: Cyclical Amigo
Using daily and monthly charts we catch up with the 3 Amigos to see what they indicate.
The daily chart of the gold price (futures) has a not very attractive pattern formed off of a negative RSI divergence. Still, at 1635 an ounce and above both up trending moving averages, it’s bullish until proven otherwise.
The monthly chart is what it is. A cyclical bull market with resistance over head. The bull is in play above the mid-upper 1300s and major support. Gold has out performed just as it should during the deflation scare. Gold is also the tour guide to a new inflationary cycle.
The daily chart of the silver price futures is holding the 14 level that we have noted to be crucial.
The monthly chart shows why we told silver to close March above 14 or else. It did and now it needs to keep doing it. The interplay between Amigos 1 & 2 is absolutely at the core of the future macro view. If you’re not watching stuff like this I have no clue why not, unless of course you are not interested in the markets. A failure of 14, which became a less probable prospect with the March close, would bring on 8.38 amid a deflationary shit storm. So far the March breakdown is indicated as false with the quick reversal (i.e. whipsaw).
And finally, the cyclical Amigo who would follow the above noted metallic interplay. Doctor Copper is right where he belongs, sucked down there in the air gap as the thundering herds flee deflation.
Doc will await signals for when it’s safe to come out and start writing inflationary prescriptions for the global economy. Sometime after that the whole raft of inflationary refugees and their massive promotions to suck in the herds again will be in play. And the world turns… I hope someday when the promoters are aggressively working you over about protecting yourself from inflation you will recall the little story of the 3 Amigos that was told while said promoters were still in hiding.
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