Below is the first segment of this week's edition of Notes From the Rabbit Hole, NFTRH 393: The Fed has been trying to promote inflation. That is not the guy…
With reference to the previous posts about about weak economic data, the fundamentals for gold are getting a boost in this data. Durable Goods, Machine Tools and Consumer Confidence have all decelerated. The risk of the Fed being sensitive to inflation may have been reduced here in favor of not wanting to tank the markets.
We talk a lot about FOMC stuff, inflation stuff and silver stuff. At 40 easy to read pages (w/ lots of graphical data backing up the themes) NFTRH 392, the…
On March 4 we reviewed the technical reasons why the gold sector was launching as opposed to blowing off. This, after articles began appearing calling the rise to that point…
Very simply, the weekly moving average that contained silver through its bear market has been broken to the upside. That is another booster of our assertion from earlier in the…
A new subscriber had a question as to the point of yesterday’s update about the Silver-Gold ratio and so I want to try to be clearer for other newer subscribers. The statement in question was “But until the Silver-Gold ratio breaks out, it has not broken out.”
I like a party as much as the next guy, but here is a turd in the punch bowl just to make sure we are balanced and partying within bounds. The top panel is the Silver-Gold ratio (SLV-GLD) and the lower is the Commodity sector ETF.
In US pre-market silver is +2.47% and gold is +.72% at 7:00 Eastern. The silver-gold ratio closed like this yesterday, still above the daily SMA 200.
This week we abbreviated to a review of limit and/or trend change points in several markets, further discussion of inflation and what needs to be in place to call an…
Note: A reminder that I will mostly be away from the markets on Thursday and Friday. This update is an extensive review of where markets stand now. We will update the situation on Sunday with an abbreviated NFTRH 391.
Precious Metals
HUI made it to the resistance line and the projected zone of 202 to 211 off the consolidation triangle (ref. daily chart reviewed in this update last week). From the ‘bottom line’ of that update: “Watch the gold miners. A breakout (on a weekly close) here would signal a new leg to an initial target of 211.”
The Silver-Gold ratio (SGR) has been a primary indicator we have awaited for a confirmation that a phase of overt inflationary effects may get under way. This would have implications for everything from commodities to resource based economies (like many emerging markets). It is one of the ‘market-based’ inflation indicators we have discussed; a metallic “credit spread” as Bob Hoye calls it. When silver leads, price increases across many other asset classes are more likely.
On April 7 in pre-market we had an extensive update on gold, silver and especially, the miners. This update is now public for your review. If you check it out…
We do in depth analysis on a weekly basis (and every day in-week) because there is no substitute for working to be right with the market’s evolving situation as opposed to making bias or ego stoked calls in hopes of being right.
The current situation has seen some calling ‘bullish’ on the stock market despite a still intact bear trend (noted repeatedly in NFTRH), people going bullish on commodities despite their “bounce only” (also noted repeatedly) status in the absence of real, market-based inflation signals (which I do think are coming soon) and global markets bouncing within bear trends of varying degrees.
But the good feelings of the last 1.5 months have been indicated as a counter-trend bounce to reset the unsustainable bearishness of January and February’s downside, although the bounce has come very close to the point where it could negate the bear trend. As yet, it has not.
In the weekend report we used weekly charts to show that gold has taken a good chunk of its apparent price risk out as key support was not too far away beginning in the 1180’s. Silver had lost the breakout above the would-be supportive EMA 55 and HUI was well above key support, now 140 (lateral support at October highs) to 148 (gently rising EMA 55). We have also been noting 211 as the point that greatly improves the prospects of a bull market, technically (I think the probabilities are that one is in progress, but the technicals are what they are).