Blog

Here is yesterday’s first entry in the subscriber blog:

You win some (timing a buy on MAIFF/MAI.V) and lose some (my hedges, which have gone from solid paper profits to small paper losses).

MAI was luck. The hedges are what they are. You’ve got to time them right to reap profit or they live up to their name. I still hold them tentatively, and am using them to continue nibbling (increased silver prospect ABBRF/ABRA.TO, for example).

HUI is breaking through key resistance (828.50) after not correcting to the degree anticipated. If it keeps going, it’s got places to go and people to see (i.e. correction over). But I’m hanging in with the hedges for a bit but also looking to buy or add to a couple more items.

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On September 9th Bessent begins his bond market rig job on the long end (to try to repress yields). Warsh began his his psy-op to boost yields on the short end at Jackson Hole last week. The stock market is celebrating falling yields. Complete with joyous floor traders, no less.

But the story is going to be about more than yields falling or rising. It’s also going to be about the yield curve being contained (or not). Thus far, it retains its steepening posture from June.

Bessent is on deck to begin Operation Mid-Terms Pump Job and that is expected to be stock market-bullish. It could also be gold/gold stocks-bullish. But in my opinion, for that to be the case it would be best if Warsh was just playing hawk at Jackson Hole but goes back to STFU’ing from here on.

Again, the theoretical implication of long-term yields being pressured downward and short-term yields being talked up is a flattening yield curve, AKA Goldilocks, AKA not a good environment for gold. But if Warsh goes back into hiding and Bessent carries the day on the long end, it’s likely gold and gold stock-bullish. Especially if the yield curve avoids a new flattener.

Bottom Line

Long story (you know I can go on about this stuff) short, gold broke below and is bouncing back above initial support level at 4372, silver broke below support at 67.60 and is bouncing and testing it as resistance. HUI is above the key 828.50 level and needs to hold it and remain firm to end the correction.

Meanwhile, we’ve got policy interference in the markets. If we get the Bessent end of the bond market manipulation but Warsh and Fed mic eaters keep their traps (mostly) shut, we could get a pervasive rally phase into November, as anticipated before the Jackson Hole speech.

But if Bessent/Warsh mean business and really do intend to rig a curve flattener, I’d favor the broader stock market, and especially items like Tech, Biotech, Growth, and other areas that don’t mind a stronger US dollar.

Leaning toward the former; a more widespread rally. But on guard for the latter.