Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Who is Spreading the Virus? UK Coronavirus 2nd Wave Analysis - 30th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part II - 30th Sep 20
The Only Thing Systematic Is The Destruction Of America - 29th Sep 20
Fractional-Reserve Banking Is The Elephant In The Room - 29th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part I - 29th Sep 20
Stock Market Short-term Reversal - 29th Sep 20
How Trump co-opted the religious right and stacked the courts with conservatives - 29th Sep 20
Which RTX 3080 GPU to BUY and AVOID! Nvidia, Asus, MSI , Palit, Gigabyte, Zotac, MLCC vs POSCAPS - 29th Sep 20
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Silver Trading in Tight $1 Range As Pressure Builds For A Breakout

Commodities / Gold and Silver 2018 May 29, 2018 - 09:52 AM GMT

By: GoldCore

Commodities

- Trump Cancels Historic Summit with North Korea
– US 10-Year Falls Below 3%, Gold Jumps Back Above $1300
– “Inflation Overshoot Could Be Helpful” – Latest FOMC Minutes
– Gold Demand in Turkey as Lira falls sharply, true inflation near 40%
– EU Crisis Looming as Italy Plan Outright ‘Money Printing’ with ‘Mini-Bots’
– Silver Trading in Tight $1 range, Pressure Building for a Breakout (see chart)


Weekly Report by Daniel March
Editor Mark O’Byrne

Gold and silver both ended the week up 0.93% and 0.61%, as many stock indices falling and ‘risk off’ sentiment returning.

Table courtesy of finviz.com

Trump surprised markets by cancelled the upcoming meeting with North Korea on Thursday, citing the recent ‘anger and hostilities’ in recent statements as the reason for the withdrawal. US Yields tumbled on the news (back below 3%) with the precious metals complex benefiting from the safe-haven buying, and gold jumping back above $1300.

In EUR gold ended up 1.9% at €1,117.73, and in GBP up 2.15% at £978.90, quickly closing in on the £1,000 per ounce level (see below).

With the data clearly pointing to a slowing economy, it was interesting to note the latest FOMC Minutes.

In the statement released on Wednesday, the Fed noted a ‘modest inflation overshoot could be helpful’, and more importantly that ‘it may soon to change forward guidance’.Given these admissions, is the Fed giving the best hint yet that they are willing to stoke inflation in an attempt to revive a faltering economy?

On economic data, New and Existing Home Sales for April came in less than expected, with New Sales reporting 662k vs 680k, and Retail Sales reporting 546k vs 556k. Perhaps the weaker data is a sign higher rates in the US are starting to deter buyers. Jobless claims in the US rose for the 2nd straight week, with 14,000 more people filling for unemployment insurance. The only data point to buck the trend was the Core Durable Orders rising 0.9% vs 0.5%. However, when you strip out military spending, capital orders actually fell last month.

As we have reported before (see link) with a relatively high US 10-Year Yield (when compared to other G10 countries) and a strong US dollar, at some point the divergence will become too great. The Fed will likely be forced to realign to a more accommodative global policy.

In other markets this week, crude Oil was one of the worst performers, ending down almost 5% on reports from Opec of plans to boost production. While the industrial metals of platinum, palladium and copper all ended higher (around 1-2%), which was strange given the stronger Dollar Index (up 0.6%), and the weaker than expected economic data. Such a move in the industrial complex questions whether we are heading into a late cycle growth period, similar to the late 1970’s, where commodities move higher, despite the data, stocking inflation along the way.

While its too early to say for sure, the evidence is clearly pointing to a stagflationary outlook. And following on this trend, it was interesting to hear the latest view from JP Morgan, where their head of emerging markets, Luis Oganes, would “Not surprised if gold surpasses the $1,700/oz target set for next year.” and “Bullishness is related to the fact that US’ expansionary phase is in the late cycle where gold has historically rallied even after business cycle starts to turn.

“Expensive” not to own gold in Turkey in recent months, years & throughout history

In emerging markets, as we covered yesterday, Turkey continued to spiral out of control this week, with the Lira making new lows against the dollar. Possibly the most worrying development this week has been the speed of the Lira’s decline, with analysts estimating every 1% fall in the currency adds a further $1 billion to their debt.

Investors now receive almost 5 Lira for a single US dollar, which is an almost 80% decline in the value of the currency since late January. As a result inflation is soaring, with true inflation well above the official 10.9% being reported. Real or implied inflation is running closer to 40%.

In an interview last month the president of Turkey had the following to say on the situation:

I made a suggestion at a G20 meeting, why do we make all loans in dollars? With the dollar the World is always under exchange rate pressure. We should save states and nations from this exchange rate pressure. What I’m saying is that these debts should be in Gold. Because at this point the karat of gold is unlike anything else.

These comments come at a time when Turkey have just repatriated 220 tonnes of gold from the NY Fed. This move from Turkey, echoes the recent trend of global repatriation with Germany, Netherlands, Belgium and Austria, all opting to bring their back into home soil, in a clear sign of distrust for the current system (link).

Turkey, like other European Central Banks, understand the importance of holding gold in their own possession, and more importantly the role it could play in settling future global trade.

There are signs that the crisis in the EU could be about to come roaring back.

In Italy, the Anti Establishment ‘5 Star’ and far right ‘Lega’ look set to take power. The market continues to be unimpressed with the prospect of an Anti Establishment party ruling over one of the Euro’s founding members, with the yield on the Italian 10-Year continuing to push higher.

The European marketplace seems to be particularly concerned with the coalition’s plans to boost spending through issuing ‘Mini-Bots’. A funky name, but a ‘Mini-Bot’, is just an Italian Treasury Bill, with the name a play on the word ‘Buoni Ordinari del Tesoro’.

What is interesting about this form of funding, is unlike traditional Treasury bills, that are simply an electronic book keeping entry, the Mini Bot, will be physically printed by state lottery presses – so Italy will be quite literally ‘printing money’.

The Mini Bot will be smaller in denomination, compared to traditional Treasury operations, ranging from €1-€500. In addition, the notes will have no interest coupon, nor maturity date, meaning they can circulate with the Italian economy as essentially a parallel currency.

The concern for Europe is the potential for these notes to function in the wider economy, with holders bartering their Mini Bots at a discount against the face value for a wider range of goods and services – a potential scenario that would threaten the stability of the European Union.

Given this daunting prospect for citizens holding Euros, perhaps now is a good time to protect their future purchasing power, and take some of their wealth offline (link).

History has shown, time and again, the best form of protection when governments seek such fiat expansionary measures, is in the form of physical gold and silver.

From a technical perspective, gold is recovering strongly after dipping below the 200 dma, a trend noted in last week’s article (link). The key test will be see whether it can hold above $1300, and settle back above the 200 dma (currently at $1308, see below)  in the run up to the June FOMC meeting, especially given gold’s tendency to sell off in the weeks leading up to the announcement.

In silver the situation is even more interesting with both the 50 and 200 week moving averages now at the same level of $16.74. This alignment of the moving averages is further evidence of building energy in the silver market, that when it breaks will likely bring a sizeable move.

For investors sitting on the side lines, sure silver may drift 2 or 3 % lower to the bottom of the range from here, but given the upside potential of when is does finally break, do you really want to take the chance of waiting?

Silver is trading in perhaps one of the tightest ranges in history, essentially a $1 range from $15.80-$16.80 (see above chart). And while no-one knows for sure the exact timing of a silver breakout, one thing is for sure, the above pattern cannot last for too much longer.

For investors not already positioned, now is a good time to be accumulating physical silver, especially given the low premiums over spot. And for those investors still waiting, just remember that while silver volatility has been low recently, when silver does finally breakout it usually happens very quickly leaving many people behind.

As many readers will already know the commercials (traditionally the smart money) have been positioning for a breakout in silver for last 7 years (see link).

Looking ahead the main market moving event on the short term will likely be the ongoing developments between the US and North Korea, with changes from either side driving the popular risk on or risk off sentiment on the marketplace.

Also in addition to the on going uncertainty in Italy, Spain have become the latest Eurozone country to be placed ‘under the spot light’, with odds of an early election increasing after a vote of no confidence in the ruling government. Spanish 10-Year yields have jumped sharply this week, with the main concern Spain, could follow Italy in electing an anti-establishment party

There is plenty of economic data next week, so investors should brace for volatility. China report Manufacturing PMI on Wednesday, Europe give the latest inflation readings with CPI data Thursday, and the US provides the latest employment figures with the Non-Farm payrolls.

These geopolitical events, and economic data points will provide the near term direction for stocks, bonds, and most importantly the next direction in gold and silver.

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

25 May: USD 1,303.95, GBP 976.53 & EUR 1,113.70 per ounce
24 May: USD 1,296.35, GBP 967.73 & EUR 1,104.88 per ounce
23 May: USD 1,294.00, GBP 967.91 & EUR 1,102.88 per ounce
22 May: USD 1,293.90, GBP 961.24 & EUR 1,095.29 per ounce
21 May: USD 1,285.85, GBP 959.24 & EUR 1,095.67 per ounce
18 May: USD 1,287.20, GBP 954.20 & EUR 1,091.16 per ounce
17 May: USD 1,288.85, GBP 952.07 & EUR 1,090.50 per ounce

Silver Prices (LBMA)

25 May: USD 16.67, GBP 12.49 & EUR 14.24 per ounce
24 May: USD 16.51, GBP 12.32 & EUR 14.09 per ounce
23 May: USD 16.53, GBP 12.38 & EUR 14.11 per ounce
22 May: USD 16.58, GBP 12.32 & EUR 14.04 per ounce
21 May: USD 16.34, GBP 12.19 & EUR 13.91 per ounce
18 May: USD 16.39, GBP 12.16 & EUR 13.92 per ounce
17 May: USD 16.39, GBP 12.14 & EUR 13.90 per ounce

Mark O'Byrne

Executive Director

This update can be found on the GoldCore blog here.

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W http://www.goldcore.com/uk/

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information containd in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules