- the dollar gets sold on Friday and overnight
- Gold & Silver are back on the rally tracks
Good Day… And a Marvelous Monday to you! What a beautiful weekend, weather wise we had down here in the South this past weekend. The Super Bowl was last night… We hosted some friends that are down here over to watch the game, which turned into a game of defense of which Seattle had the better of the two and won the NFL Championship… The Kinks greet me this morning with their great song: All Day And All Night…
Well, the dollar ended last week getting sold, and Gold & Silver ended the week getting bought… It was like old/recent times, eh? The BBDXY saw its previous figure of 1,195 fall to 1,190 as it returned to its underlying weak trend. The euro climbed back above the 1.18 figure, and the rest of the currencies looked a little healthier going into the weekend.
Gold gained $ 189 to close the week at $4,966, while Silver gained $6.68 to close the week at $77.99… I have to say that reading that explanation that I had given you the link to last week, really opened my eye to better understand the market a little better with all their options & puts, and deltas and gammas, etc. The collapse of Silver on 1/30 wasn’t just about the POTUS naming Keven Warsh as his Fed chairman nominee, nor was it about the raising of margin requirements on Silver… You’d have to read the article to find out what was behind the selling that took Silver from $121 to $73 in one trading session..
Well, did anyone take up my invitation to read the article I featured regarding the Silver crash? Yes, it was a very long and detailed article, but… one that really explained the “real reason” Silver crashed on 1/30… Towards the end of the article, the writer, explained that Silver’s level of heavy resistance will be between $85 and $90, as there are a ton of dealers still awaiting on those levels to get out of their losing Silver options… So, don’t expect Silver to have a super ball bounce back to $100 right away… First, it’s going to have to fight through the resistance levels, which means every time Silver rallies close to those levels it will meet with heavy selling… Until…. all the losing positions are taken care of… I know this is not solace to investors that bought Silver above $75 with the idea that it would reach $100 quickly… But, for those of us who bought Silver to hold and keep for a rainy day, Silver in this area of $75 is great, for we bought it long ago!
The Good News? Well, the number of shorts in Silver have been reduced by a large amount after the debacle of 1/30… Ed Steer tells us that the short paper traders have 116 days of Silver production short, which is down significantly from the days when the days to cover were over 180… Those 116 days short in production represent 3.9 Months of production… That’s still gross, in my mind, but it is lower and we can thank the debacle on 1/30 for that!
The price of Oil ended the week trading with a $63 handle… This price has jockeyed back and forth between $63 and $64 for the last two weeks, and usually that signals that an asset is getting ready to go on a rally streak to higher ground…. I’m not saying that the price of Oil is going higher, I’m just pointing out what this usually leads to… It can also lead to traders giving up trying to take it higher and then seeing the price fall… So, we’re at that point where something has to break…
The 10-year Treasury ended the week with a 4.21% yield… There had to be a ton of buying of the bond late last week, as the tried-and-true trading of safe havens came into play… The 10-year lost 4 basis points of yield last week, and that was brought about by the Fed Heads’ yield control, buying of the bond..
All market are manipulated these days folks… I know I’ve pointed that out before, but it bears repeating, as there are no free trading markets out there, which means we will continue to be subjected the sentiment of traders… (and Gov’ts)
In the overnight markets last night… the dollar got sold overnight, and it as it has definitely returned to its underlying weak trend. The BBDXY lost 3 index points overnight, and the currencies all look more representative this morning… The Chinese renminbi was allowed to gain another point VS the dollar and starts today trading with a 6.92 handle… The dollar’s brief rally was all the makings of intervention by the PPT…
We have two Central Bank meeting this week… The Canadian National Bank and the Bank of England will meet to discuss rates… I don’t see any movement here from either of those two, but you never know… eh?
The price of Oil remained trading with a $63 handle overnight, and the 10-year Treasury starts this week trading with a 4.23% yield.
Remember when I had a FWIW article last week about AI taking over all those jobs starting now? Well, this came across the wire on Friday, “global outplacement and executive coaching firm Challenger, Gray & Christmas reported that U.S.-based employers announced 108,435 job cuts in January, an increase of 118% from the 49,795 cuts announced in the same month last year.”
And guess what’s getting the finger of blame pointed at it for these losses? You guessed it… AI!
And signaling the end of the 40-year bond rally, that occurred a couple of years ago. There was more proof of the end in that it was reported that The US Bond Market has now been in a drawdown for 66 months, by far the longest in history. YIKES! You know that long bond yields remain below the inflation rate… (real inflation not the stuff that the Gov’t prints) and as long as that exists, the lack of buyers will continue to mount… Who wants to buy something that is at a loss before you even take possession? I’m just saying..
And that leads to the idea that I floated a few weeks ago, that I truly believe that we as a country will be forced to buy our own bonds, print the money to buy them, and throw gas on the inflation fire…
And speaking of inflation… last week the PCE (personal consumption expenditures) the Fed Heads’ preferred calc on inflation, printed at 3% YTD… In case you didn’t notice, this is going the wrong way and now is 1 full percentage point away from the Fed’s 2% target rate. I think investors should be asking if the Fed’s rates are really addressing inflation… To me, they are not… But then that’s just me and my jaded way of thinking about the Fed/ Cabal/ Cartel. The Fed Heads are in a pickle, as they can’t raise rates because of the all the new issues would have higher yields, and thus more debt would be printed in the form of bond servicing (interest), and they can’t cut them any further without all the markets going bananas that they are inviting inflation to go higher…
On Thursday last week, the FWIW was a discussion of inflation and hyperinflation… I don’t think that people are concerned enough about the possibilities of hyperinflation… I mean, you should be aware of it, and keep an eye on it, not worry about it just yet, but be aware of the possibility… I’m just saying…
The U.S. Data Cupboard on Friday last week showed that Consumer Sentiment had risen from 55 to 57, why? I have no idea, with all the problems going on, but there were reports that the U.S. and Iran would start talks… That’s a far cry from what was going on the week earlier when it was thought that the U.S. would attack Iran… So, maybe, that’s the reason for the rise in sentiment…
This week will be chock-full-o-data as the delayed report on Retail Sales for Dec. will print along with the delayed report for Jobs for January… There are a lot of other prints coming this week too, but these two are the biggest prints…
We did see the color of the latest Consumer Credit (read debt) report… This was a real doozy folks… And credit cards were the main culprit behind a $22.7 Billion in debt taken on by consumers in December… Apparently it was a very nice Christmas for most as the credit card debt exploded higher at $13.8 Billion! And to top it all off… The latest report on Credit Card interest showed that Banks are charging 22% for Credit Card balances… How does one pay off a huge debt with interest rates like that?
And I came across this tidbit the other day, that I think is important to know… First of all, our stupid GDP, is like 70% consumer spending… well, 50% of the spending is done by 10% of the population… So, it is concentrated among the wealthy 10%… So, there you go Retail Sales!
To recap… The dollar is heading back to its underlying weak trend, and Gold & Silver were back on the rally tracks on Friday. Chuck goes through a long explanation of Silver’s road to recovery… And the Data Cupboard is going to be full of stuff this week. Consumer Debt is exploding higher with Credit Cards leading the way with 22% interest on the debt… And 50% of consumer spending is done by 10% of the population… Important to know when the stupid GDP prints… I’m just saying…
For What It’s Worth… This article was highlighted in Ed Steer’s letter last Thursday, and I saved it for today’s FWIW… This is about Gold price manipulation and it can be found here: Gold bugs were right about the price hitting US$5,000 | Financial Post
Or, here’s your snippet: “Gold bugs spent years predicting bullion would hit its present value of around US$5,000 per ounce, but now that their predictions have borne out, some are airing a long-held grievance that it should be trading even higher, but for unlawful manipulation by big banks and western governments.
Others write this off as a nonsense conspiracy theory. But with gold prices swinging wildly — to their highest ever price in January of US$5,600 per ounce, only to crash 16 per cent in the waning days of the month and then recover back above US$5,000 on Tuesday — the decades-old debate about what makes the yellow metal rise or fall is rearing its head again.
“Here’s what I say,” Eric Sprott, a multibillionaire in Toronto and a longtime gold bug, said. “I’m going to call them ‘The cartel’ — the major American banks and Canadian ones, too, by the way — thought gold was kind of their whipping boy; that they could sell it and knock it down.”
Chuck again… this is a very good article that spells out the manipulation of the price of Gold and its rebuttals… But again, all the “regular responses to the selling” are somewhat right, but the options explosion was the main reason…
Market Prices 2/9/2026: American Style: A$ .7042, kiwi .6027, C$ .7342, euro 1.1876, sterling 1.3588, Swiss $1.2975, European Style: rand 16.0003, krone 9.6336, SEK 8.9806, forint 317.50, zloty 3.5488, koruna 20.3925, RUB 77.42, yen 156.50, sing 1.2685, HKD 7.8152, INR 90.77, China 6.9236, peso 17.23, BRL 5.1991, BBDXY 1,187, Dollar Index 97.23, Oil $63.82, 10-year 4.23%, Silver $80.52, Platinum $2,068.00, Palladium $1.701.00, Copper $5.89, and Gold… $5,013
That’s it for today… Well, that was fun last night with a few folks over, and we ended up with so much food that everyone brought, that I’ll be eating the leftovers all week! Well, things are back to normal now, with regards to the dollar and metals… And that’s a good thing! A normal size Pfennig today, I’m still a little groggy from last night… But ready to take on full sun and 75 today! Now, where are the cookies from last night? HA Football is over and now Baseball takes over, with the Cardinals pitchers and catchers reporting later this week…. YAHOO! Baseball is back!
Chuck Butler