This morning I made the mistake of venturing out to the gold websites, where I found Mr. Clive – Man Who Stared at Charts in November and reversed a wildly bullish gold stance in favor of copper – Maund writing the most tin foil hat wearing piece I’ve ever read. Dude, you are one of…
…at best, immersing yourself in the ‘global elites vs. the rest of us’ narrative is distracting to your job, is it not? The first tenet of a chart watcher, not to mention a market watcher in general, is to remain free of bias. But now you have installed a lot of shit into my psyche that will take a few hours to process right back out. Do I believe everything I am told about the Corona effing virus or a multitude of disasters that came before it? No. Do I take seriously information (I am not linking it, you are welcome to go find it if you want) produced by a gold nut* with a long history of shall we say dynamic writing? That would also be a no. At best that stuff interferes with the job at hand, which is market management.
Moving on, it is my sole job to interpret the markets and get them right, either in foresight or in unbiased adjustment. So with that, we check in with the lovable and wacky Amigos (daily charts) to see what they have for us this morning.
The counter-cyclical Amigo is where we left him yesterday. At support, targeting 1940 as long as support holds. The message here is and has been that the acute economic contraction and monetary debasement in process have kept the gold price firm but more importantly, have launched the gold price in relation to everything else.
Here for example is Gold vs. Copper (better luck next time Clive). This is a pure picture of economic contraction and deflation. Gold/Copper is merely consolidating during the stock market relief bounce.
Silver is of course the economic/monetary cross-dresser. He of the many industrial uses and above-ground supply, much of which is a byproduct of base metals mining. Silver has been kept in lock down by its overlord and master (I told you it will take a few hours for me to process the Clive stuff), the SMA 50.
The case against silver is swallowed hook, line and sinker by small speculators, who hate the stuff right now (relative to their usual enthusiasm). And with this chart, who can blame them? But still, it’s the small specs and that in a vacuum is a positive. That said, the silver CoT, while better than gold’s CoT, can improve further if the price declines.
Here is this morning’s live Silver/Gold ratio (SGR) attempting to negate the baby bear flag breakdown. It is still not looking good for the cyclical/inflationary macro view, but it’s better than it was on Monday and Tuesday. The bounce – in SGR and the macro – limps on.
Finally, the cyclical and inflationary Amigo, himself having broken a rising wedge bear flag, failed a baby bear flag of its own but hanging tough in bounce mode at the SMA 50. Make no mistake, bounce or no bounce we don’t even start a bullish conversation about copper unless it takes out resistance at 2.50. But there it is anyway, limping along its bounce on declining volume.
* I sometimes publicly describe myself as a gold lunatic, so when the shoe also fits people putting out incredible examples of the condition, the shoe fits. That’s all. Goldus Nutus Extremus.
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