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SD Friday Wrap: Monday we said every inch on the chart would be hard fought, and was it ever, but gold & silver eked out tiny gains. Here’s the details…
Rant on –
Look, I get it. Everybody’s sentiment is down in the gutter, so there we are down in the gutter making friends with that clown who is down there too, and It’s feeding off our fears of this continuing, agonizing sideways drift. This is extremely painful in light of all the reasons we should all be bullish on gold & silver right now. But this week, we can barely even call this progress baby steps.
– Rant off
These days are blurring together with the price action and it is beginning to tell one from the other. That said, one day this week I said somewhere that the gold to silver ratio could very well make a run to 85.
At above 83 man-oh-man did we come close:
Let this sink in for a moment:
The gold to silver ratio as it comes out of the ground is 9 or 10 to 1
The historical ratio is somewhere between 15 or 25 to 1 depending on time period and country (15:1 in the U.S.)
The average over the last century and especially the last several decades is somewhere between 40 and 50 to 1
Yet this week, it took over 83 ounces of silver to buy one single ounce of gold.
No wonder – Open interest on the COMEX has never, ever been higher than it is right now!
What is it that governments and central banks and the global elite fear more than any single thing in the entire world?
Darned right it’s silver, or else they would not be lashing out in sheer desperation.
But that’s the thing – Truth prevails. Good prevails. Honest money prevails. It is a losing battle, and they know it. Perhaps the prolonged agony is to allow the global elite to shift funds to physical gold & silver while they still can, and geez do they have a ton of paper wealth to burn though, but they can’t do it quickly or else supply would seize up and gold & silver would go into hiding.
I do understand that is what is coming. It’s in hiding right now. All of the stackers from all of these years are holding on, with strong hands, and we’re not willing to let it go until the price is much, much higher.
So it’s like a race against time, but one that can’t go to fast because the global elite, the cartel, governments and the central banks already know the jig is up.
They’re just not telling anybody. They wouldn’t. Who would admit they are destroying the monetary system?
But i digress.
I’ve put silver’s tight range back on the cart again today:
We’re stuck on the lower end of the range right now, as we have been for the last several days.
There’s two ranges we’re watching. The broader range is $16.20 to $16.80, and the tighter range is $16.40 to $16.60.
The cartel is absolutely stuck right now.
All those spec shorts need to cover. If price drops below the range, which even my dog can see, then that would unleash an epic short-squeeze and who knows how high price would shoot up?
I mean, what, is the cartel really just going to do nothing other than feed paper into the short squeeze with open interest already at record highs?
On the other hand, if price breaks out of the trading range, then that will also unleash an epic short squeeze because traders will be covering as quickly as they can to cut their losses wherever they can.
So what is one to do?
Keep silver in a range as tight as possible. It’s really starting to look like the freakin’ VIX throughout all of last year, but what happened when it just wouldn’t stay under 10 any longer?
That’s right – traders blew up, certain ETFs blew up, even entire hedge funds blew up.
That’s what I’m talking about here folks. I can’t tell you when it’s going to happen, but I do know it will happen. It’s only a matter of time, of which I think there’s very little time left.
On the weekly, we can see just how small of a gain silver eked out:
We are talking 1/2 a penny, as in $16.34 last week vs $16.345 this week.
Let the absurdity of that sink in: Half of one penny.
We can basically call it “unch”, which in trader talk is short for “unchanged”.
Gold has been performing better, and is even positive on the year. It just goes to show you that no matter how hard the cartel tries, they just can’t keep the truth from coming out.
So on the weekly, we see gold’s trend is pretty clear:
If we rally from here, then we have continuation of the series of higher-lows and higher-highs, on a long term cart. We could even take it back all the way to the rally coming out of the December 2015 bottom if we wanted too. I left the bottom on the chart just to let it sink in where we’ve been, and also where we’re going.
Even on the daily we see gold hanging in there:
Gold is back above its 50-day moving average, and although it has been ugly, gold is riding the average now and looks poised to rally.
Things will really start to get interesting once silver turns the corner and begins to lead gold in terms of performance.
It’s like they say: There’s no fever like gold fever.
Looking at the other precious metals, its’ been downright nasty.
Platinum’s chart looks terrible:
If platinum keeps falling its 50-day moving average is going to catch up to the 200-day in a hurry.
Did the bleeding stop today?
Hopefully it did.
Palladium, on the other hand, well, palladium is not doing well.
Palladium, recall, was the MVM in 2017. That is to say, Palladium was the “Most Valuable Metal”, think a sport’s MVP, and it really showed upside potential.
But palladium has fallen every single day this week:
Palladium can’t catch a break for the life of it.
We knew sentiment would get crushed if palladium lost the support of the 200-day, but I don’t think anybody imagined it would get this bad.
In fact, don’t shoot the messenger, but palladium is now officially in a bear market, meaning from the top at $1133 to today’s close around $896, palladium is down more than 20%.
And that’s all happened since mid-January.
Moving on to the commodities, there is a lot of positioning and re-positioning going on, and as such, the markets are having a hard time of making sensed of things.
Copper is riding the 200-day moving average:
Although that is looking like a long, drawn out topping process, so we’ll be watching copper closely.
Crude is holding up better but is also riding a moving average:
Interestingly, if crude rallies from here, we would have solid confirmation of a bullish trend with a series of three higher-lows and three higher-highs.
Left on the chart is the lows from last summer to remind everybody just how far crude has come. If this protracted consolidation, just like most everything else we’re following, is preparing for the next leg up in the case in crude, does that mean that we’ll be floating between $80 – $85 per barrel?
It would not surprise me one bit. In fact, I’m expecting it.
Looking at the dollar, we can see we’ve got a sideways channel and range developing in the greenback too:
Let’s call it a sideways channel between 89.50 and 90.50.
But the range is where the similarities end, however, because unlike gold & silver’s next leg, the next leg in the dollar looks to be down.
Not only that, but the dollar is now at the top resistance of the channel. Will a trip back down to the low end of the range fall through the support and usher in the start of the next down-leg?
We could know as early as next week the answer to that question.
Speaking of ranges, an interesting thing has developed in the bond market:
Bonds have rallied, meaning the prices of bonds have gone up, and the interest rates paid on bonds, such as the interest rate on the 10-year Note shown above, have gone down.
We fell through the 2.8% to 2.9% range yet again today. In fact, looking at the yield on the 10-Year, it appears yield is rolling over.
Hmmm. We’ll have to keep our eyes on the bond market too then because if the bond market is rolling over and rates start heading lower again, that would be good for gold. As said earlier, right now everything is good for gold (and silver), but in the most mainstream of senses, falling yield is good for gold. That said, we need to be on the look-out for gold hit pieces from the mainstream financial propagandist press if yield falls even further next week.
The stock market as shown by the S&P 500 looks downright sickly:
Losing the support of the 200-day moving average would be very bearish.
And the Dow Jones Industrial Average looks sickly as well:
But here’s the thing – We don’t know what the ESF and the Fed, taking their marching orders from the global elite, and being the same cartel we talk about day in and day out – we don’t know what they have in store for us.
Something about a big club that we’re not in?
So we can only assume:
They want the market to fall and are attempting to do it “orderly”
They want the market to rise and will step in and support it as such by selling volatility, buying the indexes, and naked shorting gold & silver
There are two or more camps duking it out to control the narrative – one which wants the markets to rise and one which wants the markets to fall
Just like with the predicament of a break-out or break-down in the range of silver, the cartel is really in a box here with the stock market.
This leads me to understand that there’s no pleasant scenarios that could unfold in the broader stock market and the economy in general.
Speaking of volatility, I’ve been saying that 20 is the new 10 for a while now:
And the VIX is straddling either side of 20 in its own sideways channel.
One thing that is not in a sideways channel, however, is Bitcoin:
That’s another leg lower just today, and the price for a piece of code on the distributed ledger is now well below $7,000, so there’s no reason to expect a trip down to the $5,000’s very soon.
I won’t get into all the flaws, frauds and falsities of that which is Bitcoin here, just check out our Bitcoin bubble tag for all of that.
No sense in bringing my keyboard that much closer to the end of its average keystroke count over a digital nothing.
I’d rather use those strokes to put in another order for some shiny phyzz, and as has been the case all year, it would be for the white metal, not that I got something against the yellow, but because I understand the GSR is extreme and unsustainable.
– Half Dollar
Jan. 11 saw Stack’s Bowers offer the first tranche of the remarkable Eldorado Collection of the Paper Money of Colombia.
The sale was part of 10 catalogs of coins and notes offered by the company during NYINC. All told, the 605 lots of paper money took $1,133,766. The average price of $1,874 apiece testified to the outstanding quality of the collection.
Top-selling lot was a low serial number July 20, 1923, gold note series set of four, 1 to 10 pesos (P-361 to -364a). All carried serial number 0000003. All were graded about PMG Choice Uncirculated 63. The auction catalog rightly described the set as a “museum caliber quartet and trophy for low-number note collectors.” The upshot saw the bidding rapidly soar into the stratosphere to realize almost 17 times the upper estimate, or $84,000.
A second set, in this case six 1890s specimens of Reyes Gonzáles & Hermanos 1 to 100 pesos (P-S901s to -906s) made $13,200, or nearly four times the upper estimate. The notes graded PMG-65 EPQ to -66 EPQ.
Other seriously priced lots included an extremely rare Banco de la República Billete Provisional 5 pesos overprinted on Casa de Moneda de Medellín c. 1923 (P-352). In PMG Choice Very Fine 35, it took $33,600 on a $6,000-$9,000 estimate.
A rare and choice issued and uncanceled Banco de Colombia 20 pesos of July 20, 1876, (P-S386) took $19,200 in PMG Very Fine 25, while an 1899 Banco de Barranquilla 20 pesos (P-S235b) made $12,000 in PMG Very Fine 25 Net on a $750-$1,250 estimate.
Remarkably, an official ABNC archival record book of issues of República de la Colombia, 1923-1979, managed just $7,800. It had previously sold as Lot 87 of the 1990 ABN Sale at Christies. It had remained intact.
Full catalog details and prices realized are available at the Stack’s Bowers website, www.stacksbowers.com, including the results of a 98-lot, internet-only sale also from the Eldorado Collection.
“It’s quite shocking to me… It’s very harmful to the shareholders… It is manipulation and it’s used frequently. Yet, the exchanges don’t step in because the exchanges are owned by the banks… the self policing system doesn’t work because no one wants to police themselves because they’re all making too much money.”
A man from the French region of Normandy recently inherited a house from a deceased relative, only to discover his newly acquired home was actually a secret gold depository. Throughout the house, the man found a total of 220 lbs (3208.33 Troy oz.) of gold coins and bars totaling $3.7 million.
The man’s identity has yet to be released, but reports indicate he was in the process of preparing furniture for sale when he stumbled upon part of the horde.
Local auctioneer, Nicolas Fierfort, who had visited the home in order to appraise the furniture confirmed “5,000 gold pieces, two bars of 12 kilos and 37 ingots of 1 kilo” were found in total.
Fierfort also said the golden contents were “extremely well hidden” and scattered throughout the rest of the residence.
The first stash was a tin box of coins, which had been screwed to the underside of a piece of furniture. Like breadcrumbs leading the way home, the man continued finding gold coins in places like boxes to hold whiskey bottles, “under piles of linen, in the bathroom … everywhere,” according to Fierfort. Eventually, the two modern day Conquistadors stumbled upon the mother lode: 2 – 12 kilo gold bars. That’s 386 Troy ounces each.
A little detective work dated the gold’s purchase to sometime in the 1950s and 1960s. After the gold dust settled, the newly minted millionaire was able to locate the certificates of authenticity within the dead relative’s estate papers and eventually sell it to various buyers.
However, this story of good fortune doesn’t end as happily as we would like. Along with death comes taxes. It seems the French government will be hitting the man for a 45% inheritance tax along with charging him 3 years of back taxes because his deceased relative failed to declare the gold.
Story Here: http://schiffgold.com/key-gold-news/man-finds-gold-horde-worth-3-7-million-deceased-relatives-home/
The marketers claim a diamond is forever.
And sure, it’s a hard stone. It lasts a long time.
But what about financially? Is it equally durable? You’ve just sunk a small fortune into those rocks you’re giving on Valentine’s Day. Are they likely to hold or gain value over time?
I decided to investigate. And the results, alas, aren’t sparkling.
Even before looking at all the transaction costs, diamonds have proven an absolutely disastrous investment for decades.
According to the Rapaport Diamond Index, a respected industry benchmark, prices of top-quality stones have collapsed by as much as 80% in real, inflation-adjusted terms over the last 30 years. Even if you set aside the short-lived but massive price bubble back in 1980—around the time of a similar bubble in gold and many other commodities—the results have still been abysmal.
The index has been measured since 1978 by Martin Rapaport and his firm, the Rapaport Group, which provides a variety of research and trading services to the gemstone industry. The index looks at prices for top-quality one-carat stones, those with the best color and clarity. While every stone varies, in 1978 a typical such stone, according to the index, cost around $6,100. Today it costs nearly $11,000.
On the surface, that looks like a gain. But investors are frequently fooled by the effects of inflation. Taking that into account, the stone has actually lost about half its value in real purchasing power.
Stone prices peaked in 1980 at about $60,000 in today’s money. Some store of value.
After the crash in the early 1980s, prices bottomed out in 1985 at about $9,600 in today’s money. Since then, in real terms, they’ve barely edged up. They have, at least, kept up with inflation. But that’s ignoring all the related transaction costs, from broker’s fees and commissions and retailer markups on buying and selling to insurance costs.
Never mind that during the same period, anyone investing in a broad-based stock index fund—or even government bonds—made many times that money.
Diamonds are a marketing gimmick as much as anything else. Most men feel they have to give a diamond ring when they propose—even though, as anyone knows after a moment’s thought, the only woman worth buying a ring for is the one who doesn’t care how much you spent on her ring. (In Shakespeare’s “Merchant of Venice,” I might add, the successful suitor is the one who picks lead over silver or gold.)
The biggest winner in the diamond game is the Oppenheimer family, which runs De Beers, the Standard Oil of the diamond world. The company dates back to Cecil Rhodes and the Victorian era, and once controlled nearly 90% of the world’s diamond business. It is still by far the biggest player. (Annual results, out this week, showed sales and profits tumbled across the industry as a result of the recession. But De Beers has merely responded by cutting production and costs. Rising demand from the newly rich in emerging markets means the future looks bright. And the company had no difficulty raising a quick $1 billion from its investors to pay off some debts. Life is good at the top, even when times are tough.)
Nicholas Oppenheimer, the billionaire in charge of the company, admitted this week that most of the sales growth in the U.S. over the past decade has been the result of clever marketing campaigns.
There’s no logical reason why you should have to cut a check to Mr. Oppenheimer’s family, or even to their competitors, in order to ask your girlfriend to marry you on Sunday. But you probably will anyway. Most of us do. Marketing is a powerful thing.
(If you are doing so, Russell Shor, senior industry analyst at the Gemological Institute of America, has some advice. Pear-shaped diamonds can often seem bigger than round ones of the same number of carats, he says. And small differences in clarity are often less visible to the naked eye than differences in color.)
But you’re much better off selling diamonds than buying them. The numbers tell the story. Anyone who invested $1,000 in the Tiffany & Co. IPO in 1987 and just sat back and left their money alone, merely reinvesting the dividends, would have about $26,000 today. Someone who sunk that money into diamonds instead: less than $2,000.
Anglo American, the South African mining company that owns a major stake in De Beers, has been a terrific investment for decades. Investors in the stock more than tripled their money last decade—while diamond prices rose by less than a third.
Has the longer-term picture for diamonds been any better than that of the last 30 years? Reliable data are hard to come by. Mr. Shor says historical studies show modest price gains before the 1970s boom. “Until the 1970s, prices were relatively stable, trending upwards,” he says. “in the mid-1970s, we had a lot of inflation. Diamonds, all of a sudden, soared in value.”
If the past is prologue, which past? If we see soaring inflation and negative real interest rates again, as we did in the 1970s, diamonds and other hard assets might even take off again. But with investments, as with love, there are no guarantees.
Write to Brett Arends at email@example.com
“We are seeing record inflows into gold ETFs. I’ve been saying for over a year that there is very little gold vaulted in London to support that demand, so you are going to see a scramble for physical gold, which is what the ETFs have to have. That, to me, is the big story.
Investors will buy an ETF and then they will see something like the Barclays ETF have a glitch and they will start to ask questions about whether synthetics or surrogates for physical gold are the right thing to own because of the counterparty risks and the type of things we saw with Barclays.
So we will start to see more investors move up the food chain into physical metal, but the metal just isn’t available at this price level. You will then see a serious scramble for physical gold and that will translate in to much, much higher prices than what is being quoted today.”