- The dollar continues to get sold…
- The metals are back on the rally tracks this morning
Good Day… And a Tom Terrific Tuesday to you! Well, that was quite the snowstorm that went through St. Louis Saturday and Sunday, eh? Back home wasn’t the only area that got hammered over the weekend with snow and cold… Be careful out there driving in and shoveling snow… All I can say is that it was sunny and 85 yesterday down here… Not to rub it in, but to illustrate why I have come here every winter since 2016… Of course, later that year, I was told that I needed to retire… That’s a long story that I don’t care to rehash today… But I do remember cleaning out my office on a Sunday, when no one else was around, and then taking all my books, and personal things down to my car and leaving the garage for the last time… I turned up my radio real loud, and sang along with the songs, so it was good thing no one else was there! Poco greets me this morning with their great song: Rose of Cimarron… A great morning song!
Well, Durable Goods printed yesterday, and surprised on the Up side, but the UP was supplied with aircraft sales, and other items that we won’t see on the list for another 3 years… Gold & Sliver didn’t let the strong data get in their way of a strong rally… The only thing that could get in the way were the SPTs… And they made sure that everyone knew that they still existed… Throw in some profit taking from the short-timers and the strong rally in both was watered down greatly… Gold rose $28, but you may recall me telling you yesterday that Gold was up $109 in the morning… Silver saw that kind of trading that Gold saw, gaining $1.25, and this was after being up more than $6 in the morning… Gold ended the day at $5,011, and Silver ended the day at $105.62
Here’s Ed Steer’s take on the trading in metals yesterday, “With another epic margin call for the shorts in the works, ‘da boyz’ did what they had to do — and they didn’t take any prisoners in all four. It certainly looks like they’re trying to turn the precious metals market lower…but I doubt they’ll have any more success than they’ve had recently…which ain’t much.
It should be pointed out that the DXY bottomed out minutes after 11 a.m. — and despite its ensuing rally, the precious metals continued to power higher — and the engineered price declines came two hours after that. It was yet another day where the moves in the DXY were mostly irrelevant, compared to what was unfolding in the precious metals arena in the precious metals arena. Not all of it, mind you…but most of it.” = Ed Steer at edsteer@goldsilver.com
The dollar ended the day with the BBDXY trading at 1,187… That’s down 1 more index point from where it started in the morning, at 1,188… The wildness of the Japanese bond market had really thrown the bond boys for a loop… The Japanese 10-year Gov’t Bond yield had hit a moon shot last Friday, gaining 25 basis points in one day to 2.34%… That’s a crazy move in bonds, folks… I’ve seen months go by before seeing a bond yield gain 25 Basis Points! I would guess all those hedge funds and bond desks that were long Japanese bonds were cussing them on Friday…
I talk about this because this is the culprit that the Gov’t and dollar bugs hung their hats on with regards to why the dollar had fallen so greatly in recent days… I say hogwash! I’ll give them a basis point or two, but 8 index points since last Thursday tells me that the dollar is getting sold on a wide basis… And that tells me that my call for a the beginning of a weak dollar trend is here in earnest… Of course, we could see the PPT step in and attempt to put a floor under the dollar… But how many times can they do that until the markets see the move for what it is, an attempt to save the dollar, before they go hog-wild in selling the dollar?
The price of Oil dipped yesterday and ended the day trading with a $60 handle… And our U.S. treasury 10-year saw some selling and the yield on the bond ended the day with a 4.22% yield.
In the overnight markets last night… Well, the IMF issued a statement yesterday that they were preparing for a deep run of selling the dollar… Well, they are getting their preparations a run for their money… The BBDXY is down 5 index points to start our day, and the “Sell America” feeling is really starting to take hold. The currencies are all looking much better these days, and the Petrol currencies get an extra boost with the price of Oil higher… The euro this morning is 1.1905… It’s been a month of Sundays since the euro was this strong… You’re not too late to diversify your investment portfolio with currencies so that all the dollar denominated investments get some diversity… Again, my friend, and former colleague, Tim Smith runs the currency / metals desk at Battle Bank… And you can send him an email and find out what he has up his sleeve (not like Bullwinkle!) you can find him here: GlobalMarkets@Battlebank.com
Gold & Silver shrugged off the STP’s engineered take down yesterday, and are back on the rally tracks this morning with Gold up $76 and Silver up $8 to start our day…. There’s just no amount of short trading that can keep these two down right now… Platinum and Palladium have really been getting bought too, with Palladium trading over $2,000, and Platinum over $2,600! Copper is attempting to mount a rally, but the SPTs continue to keep a lid on the industrial metal.
The price of Oil remained trading with a $60 handle overnight, and the 10-year Treasury’s yield remained at 4.22% overnight, so no changes here. I can’t blame the bond boys that want to take the 10-year’s yield higher, for every time they do, the Fed Heads come in a do some yield control… Keep at it boys, sooner or later the Fed Heads will give up!
Yesterday, I told you that the FOMC had been in keeping a lid on the 10-year’s yield… Then I talked about how Japanese yen had rallied VS the dollar… Her’s Wolf Street with their take on all that: “On around midday Friday came the latest step, a “rate check,” with which Treasury Secretary Scott Bessent attempted to put a floor under the yen that had plunged against the dollar, and push back down long-term US Treasury yields that had surged, as he saw the turmoil in the Japanese bond market, and the plunge of the yen, bleeding over into the US.
The New York Fed, at the request of the Treasury Department and acting as fiscal agent for the Treasury Department, asked its primary dealers what exchange rate they would get if the NY Fed started buying yen through them. This “rate check” was a signal that the US government is ready to intervene in the currency market to support the yen against the USD.”
Chuck Again… Well, even if the Treasury didn’t actually intervene in the currency market, they did … When the rest of the world knows that the U.S. is looking to sell dollars and buy yen… They say, “we’ll sell dollars too, and buy Gold”…
I found this on FXSTREET.COM… These are the nice people that repost the Pfennig each day that I write it… I have no idea how many people read it there, but it helps get the word out! Any old way here is the article: “The US Dollar (USD) ended the week near a four-month low of around 97.80, maintaining a weak tone amid risk aversion in financial markets. Concerns escalated after US President Donald Trump threatened to impose 10% tariffs on eight European countries, which would increase over time unless Denmark agrees to sell Greenland to the US. Tensions remained high until Trump, along with NATO Secretary General Mark Rutte, announced a framework for a future deal regarding Greenland on Wednesday.”
Chuck again… The FXSTREET.com has been a source of information for me for a very long time. So, they reiterated what I had chronicled as to the reasons for the dollar’s weakness, but like I always say, it’s sometimes good to hear another voice singing from the same song sheet!
Stop me if you’ve hears this before, but Germany is telling the U.S. that they want their physical Gold… Here’s the good folks at GATA with their post: “Germany has been urged to withdraw gold worth more than L100 billion from American vaults because Donald Trump’s unpredictability has made keeping it there too “risky.”
The country stores 1,236 tons of gold, roughly the same weight as three Air Force 1 jets, at the U.S. Federal Reserve in New York, worth around E164 billion (E122 billion).”
Chuck again… Good luck with that request… Do you recall all the hullabaloo that went on the last time Germany asked for some of their Gold to be returned? This has got to be coming about because of all the problems the U.S. returning that bit of Gold to Germany… Their claim that “Trump’s too unpredictable” is hogwash and window dressing for the real problem…
The U.S. Data Cupboard yesterday had the beefed-up Durable Goods Orders I talked about at the start today… I still say that going from negative 1.2% the previous month, to a 5.34%, isn’t for real… and I stand by that!
Today’s Cupboard has the STUPID Consumer Confidence for this month (real live data, YAHOO!) and the Case/Shiller Home Price Index for Nov… I would think that this data would still show home prices increasing… But maybe not… I guess we’ll see, eh?
For What It’s Worth…. This article comes to me via The Guardian, and it’s about how he POTUS turmoil has really propelled Gold higher and it can be found here: Gold price jumps above $5,000 an ounce for first time amid Trump turmoil | Gold | The Guardian
Or, here’s your snippet: “The price of gold has jumped above $5,000 an ounce for the first time as Donald Trump’s chaotic policies and proclamations drive more investors to seek safe harbour in the precious metal.
Gold reached a record high of $5,100 (£3,723) on Monday morning, before easing back to settle up 2.2% at $5,091.
The moment came after Trump threatened Canada with 100% tariffs if Ottawa made “a deal with China”, and after the US president’s showdown with Europe over the future of Greenland.
With global financial markets already jittery, there are also rising fears of another US shutdown after Democrats threatened funding for the Department of Homeland Security after federal immigration agents killed a man in Minneapolis on Saturday.
Monday’s milestone is the latest in an extraordinary and historic run for gold, the price of which has jump by almost 90% since Trump’s second inauguration a little over a year ago.”
Chuck again… Well, Gold was in need badly of a another type of fuel to get it going again, and it’s found it according to the Guardian…
Market prices 1/27/2006: American Style: A$ .6944, kiwi .5991, C$ .7303, euro 1.1905, sterling 1.3727, Swiss $1.2953, European Style: rand 16.0082, krone 9.7278, SEK 8.8959, forint 319.90, koruna 20.3845, RUB 76.41, yen 153.88, sing 1.2859, HKD 7.80003, INR 91.72, China 6.9547, peso 17.31, BRL 5.2681, BBDXY 1,184, Dollar Index 96.67, Oil $60.50, 10-year 4.22%, Silver $111.38, Platinum $2,698.00, Palladium $2.050.00, Copper $5.87, and Gold… $5,087.90
That’s it for today… Well, back home they won’t see temps above the freezing level until next week… Did someone say something about global warming? Our StL U. Billikens (#21 in the rankings) play tonight, as does my beloved Mizzou Tigers… The Tigers beat OU last Saturday with 2 buzzer beaters in the same game! I’ll have one game on the TV and the other on my laptop or phone… They seem to be playing games on the same days, UGH! The teams are set for the Super Bowl in the NFL… The Seahawks and the Patriots… The two combatants played in the Super Bowl against each other a few years ago… So, this is the rematch… I still don’t know why Seattle opted to pass on the goal line instead of handing the ball off to the beast (Marshawn Lynch) and win the game… Woody Hayes used to say that two out of three things with a pass are bad outcomes… And he was right! In this case that is… The great Nina Simone takes us to the finish line today with her song: Feeling Good… I hope you have a Tom Terrific Tuesday today and Please Be Good To Yourself!
Chuck Butler