I wanted to share a discussion on the metals that I had with GATA’s Bill “Midas” Murphy this morning. I had emailed him to ask him if he knew of any reasons the metals were getting slammed today because the dollar was down a bit, the economic reports were poor and the stock market was selling off – all three occurrences of which are precious metals-friendly.
As Bill suggested, silver is under more pressure today than gold, with JPM going all out to get the speculative traders to sell, which helps JPM push the price down. If you look at short term chart, it would appear that silver is forming a head and shoulders “top” formation, something which JPM is trying achieve, as Bill correctly pointed out.
However, technical formations almost NEVER work in the metals. Typically doing the opposite of the what the formation is indicating works the best over the last 15 years. That would imply a big upleg coming, which supports my view based on the fundamentals, which would support the view of another big move higher on the horizon.
I think JPM is doing whatever it can to minimize the damage from the inevitable. The biggest seasonal physical buying period starts in another couple weeks. Next week is options expiry for Sept silver. They probably want to push silver below $19.50 if they can because the Sept silver put/call structure currently is favorable to the call-writers (i.e. JPM) is silver closes below $19.50 on the 25th. The problem is, the way the economy and the political system is melting down, they can’t control the possibility of a random news event hitting the tape that would send the metals soaring. I believe there’s high probability a news event like that could happen at any time.
Interestingly, the o/i for gold is coming down a bit earlier than usual for the typical contract “roll” period (for Aug) and the Sept silver o/i is coming down. They are covering for a reason, I believe. (click image to enlarge)
Silver is up 42.4 % since Dec 14, 2016. That is a HUGE run. If you look at a 1-yr graph, silver is trending sideways consolidating that gargantuan move it made in just 7 months. JPM and all of the other technical analysis cretins out there want us to believe that silver is forming a head n shoulders top formation. But it’s not. It was in danger of going parabolic, something we DON’T want to have happen. Yes, silver could go parabolic up to $50 and still be insanely undervalued relative to the supporting fundamentals, but the huge hedge fund trading algos would not treat it that way.
Silver looks like it will pullback to its 50 dma, which is around $19.15 right now. As long as it holds that level – and they may crush it below that level with A LOT of paper for a few days, it will be ready for the next upleg. Since mid-Dec, we have been in an uptrend that is bouncing off of the 50 dma and moving higher. The RSI and MACD momentum indicators are signalling the probability that the current move is becoming “exhausted,” with probability weighted toward a move higher soon.
At some point we might see a 200 dma correction. But silver could correct to its “chart” uptrend line around the $17 and still be up 24% since Dec 14. Anyone who would sneer at that ROR belongs in an asylum or is an internet blog terrorist.
Both gold and silver are in the process of making an eventual move that will shock and awe. We’re now aware that some of the biggest, most influential money manipulators in the world are shoveling fiat currency confetti into big positions in gold and silver – including the nefarious Rothschild clan: LINK. These guys are not buying gold for just a double or triple. They’re buying it because they know that the global fiat paper currency experiment is coming to an end. And along with it so is the debt-fueled lifestyle America has enjoyed since 1971…
Federal Reserve has released schizophrenic FOMC meeting minutes today.
It’s time for a BONANZA PARTY in the ASYLUM’S FUNERAL HOME!!!
Can you imagine having to politely sit through a civic club meeting and have to listen to this spin from a Fed official?
“Anyone who would sneer at that ROR belongs in an asylum or is an internet blog terrorist.”
Well then, I am both of those because even thinking that the ‘prices’ we have seen for silver since Jan. 1980 are in any way ‘valid’ is kind of psychotic. Believing any of the prices movements in a market so completely manipulated that nothing about it has any meaning is psychotic. A 42.5% move from a contrived bottom of c. $13.60 which was AT LEAST $7 under ave. mining cost is NOT REAL. The current economic value/price of silver is over $150 because the USD is seriously overvalued in the currency markets. Look at the ridiculous USD/GBP cross for a start. Does anyone really believe a pound is only worth $1.302? Do me a favour!
The real price of silver is dependent only upon the demand/ supply dynamics which are currently dangerously out of balance as witnessed to some degree by a gold/silver ratio of nearly 70:1 (silver oz. to gold oz.) when mining gold and silver puts that ratio at 9 (or less) to one! So, as an exercise in real silver pricing, take the current gold price $1344 and divide it by 9. What do you get? Oh, look, you get a silver price of $149! That’s a bit pricey, isn’t it? I’ll stick to my nice, comfy $19.30 price, please, so that all the silver of the world can be bought up by those naughty bullion banks acting as agents for criminal ‘governments’ and the rest of humanity is left bereft of a valuable PRECIOUS METAL resource ! Yes, silver is a precious metal which has been treated as though it is a base metal for decades? Please get all your heads around that fact. It is a scare (i.e. precious) metal! There isn’t all that much of it left either above ground or being mined and the amounts being mined expressed in oz. per ton of material excavated is dwindling. It isn’t getting more and more plentiful as the current market price suggests, it is getting less plentiful. So, by that simple premise, it should be getting more and more EXPENSIVE… and fast! Just ask Bill Murphy, he understands this!
The whole silver market thing is a chimera and one huge V-sign to humanity so why even talk about ‘their game’? It is a waste of time. Turd Ferguson once said to me that he deals with the markets as they are and not as they should be. That is why they always get away with this criminal behaviour. No one seriously challenges it. However, before that happens we should all agree to one simple fact. The price of silver should currently, i.e. NOW, at the present time, be $150 per troy ounce OR HIGHER! That fact is dictated by the Laws of Nature and not by their manipulated and fraudulent ‘markets’.
Don’t take any of this personally, Dave, but our thinking about the silver (and gold) market has to be radically changed if this whole tired ‘power-trip’ nonsense by a few criminals who buy off millions of gullible and morally weak nincompoops with their ‘funny money’ bribes are ever to be consigned to the dustbin of history.
Honest question – if the ratio of the prices of gold vs. silver is far greater than the historical norm… must it follow that silver is undervalued? Could gold be overvalued?