3 Metallic Amigos

As usual, the counter-cyclical Amigo, the swinger Amigo and the cyclical Amigo tell their macro stories.

Gold (counter-cyclical), which would benefit from a risk ‘off’ lurch by casino patrons, has held the consolidation and taken back the SMA 50. As such, the target of 1940 lives to fight another day. As I’ve mentioned before, the negative RSI divergence can be looked at as just that, negative, or it can be looked at as fuel, as in a formerly overbought metal no longer so and now able to take on the target. If it does pull back gold is bullish even down to the up trending SMA 200 at 1578.

Trends are and have been firmly up, gold is bullish and Powell sure did not hurt its case yesterday.

gold price

Silver (cyclical/counter-cyclical transvestite) pulled back from the resistance area as expected and has so far held support. Silver is working off the overbought reading it registered at resistance. Key supports are 17.45, the SMA 200 around 17 and finally, the SMA 50 at 16.28.

silver price

Silver/Gold Ratio is only doing what it was going to do as the yellow caution box was inserted for subscribers a few weeks ago as the likely target. Not necessarily the termination point, but a decision point and thus a caution point. It has not broken down, but if we get another deflationary squall like the market is hinting at this morning it will drop further. If it remains firm it could be an indicator that a re-run of the March broad global market crash is not in the cards. That bastard at the Fed is inflating to beat the band, after all.

silver gold ratio

Copper (cyclical) is pulling back but so far holding the 2.62 level, which had been our 3rd key resistance on the way up. The good doctor is very overbought by the ebullient herds that started buying the markets way too late, into the high risk zone.

copper price

I got rid of most of the reflation stuff (still holding Palladium, which I’ll watch closely) and that was for a reason. The Silver/Gold ratio and several other indicators we watch have been registering caution. On the other hand, it is possible that amid the renewed deflationary (look at yields tanking again) jitters certain well chosen sectors will work well (joining the gold mining sector).

We’ll have to see how things shake out. But the Amigos have not signaled a compelling move in one direction or the other. I think the message is of the word I’ve been parroting a lot in NFTRH lately, risk, especially with copper having become overbought within its downtrend.