- Currencies and metals rally on Monday
- Metals get sold early on Tuesday
Good Day… And a Tom Terrific Tuesday to you! Well, I’m back in my winter home after spending 4 days at home after my infusion… It was too darn cold there for me! I was so happy to be back where it is warm! Son Andrew visited Saturday night with his two kids (Braden and Evie) and Kathy ordered Raisin’ Canes’ chicken… And I couldn’t eat! What an awful thing to do to me! I absolutely adore fried Chicken! Paul McCartney greets me this morning with his song: Every night…
Well, the dollar hasn’t moved much while I was away… The BBDXY last Tuesday was 1,300 and yesterday it closed at 1,303… So, up 3 index points in the BBDXY in a week… Not even the woeful print in the Jobs Jamboree last Friday, could sink the dollar… But, over the weekend, President Trump announced new tariffs, and the whole hand wringing started again… We’ll have to wait-n-see where the new tariff talks take the dollar, eh? Gold on the other hand has continued its assault on higher pricing, with only one down day in the last 4 trading days. Gold rallied strongly on Friday, after only 143,000 jobs were created in January… Gold finished the week at $2,860, and Silver finished the week at $31.78…
Yesterday, Gold moved past $2,900 and Silver past $32 on their way to $3,000 and who knows where with Silver? Gold closed yesterday @ $2,908, and Silver closed yesterday @ $32.10… I found this on Kitco.com last night: “In his latest note, famed investor Dennis Gartman, creator of The Gartman Letter, said that the gold trade is looking a little stretched.
“I remain long-term bullish on gold, but the trade is becoming a bit crowded,” he said.
Chuck again… Dennis goes on to say that we could see a correction in Gold before it starts its move higher again….
I would use any correction in Gold as a buying opportunity…. Seriously, folks, there might not be another dip in the prices, and that’s only IF we do see a dip in the price of Gold…
The price of Oil ended yesterday trading with a $72 handle, while the 10-year Treasury’s yield closed at 4.50%, At what point does someone with real journalist guts look under the hood and call out the Fed’s for keeping a lid on the 10-year’ yield?
In the overnight markets last night…. The dollar took on some water, not much, but some as the BBDXY gave back 1 index point overnight. Well, I guess the dollar bugs aren’t as convinced about the dollar’s ability to rally with tariffs as they were previously, but of course, that can all change in a NY Minute. I still expect the dollar to gain some with all the talk of tariffs… But for now, it’s just wallowing in the mud… Gold is giving back some of its $42 gain yesterday as Gold sees some selling that has taken it down $8.. And Silver is getting whacked again! Silver is down 43-cents to start the day today… Short paper traders? Probably… They sure do seem to have an axe to grind whenever Silver starts to rally. And in the latest report on Ed Steer’s weekend letter, there are now 182 days of production in Silver to equal the ounces of Silver the short trades represent. It’s amazing to me how Silver can ever mount a strong, long-term rally with all those shorts not standing for delivery…
The price of Oil has bumped higher to trade with a $73 handle this morning, and the 10-year Treasury’s yield is rising this morning and trades with a 4.53% yield…
I want to take a moment here to talk about Copper… I don’t know if you follow it or not, but Copper has really been on a tear lately… Once it moved back above $4 at the start of January, this year… And after seeing some selling yesterday by $2.55, Copper has reached $4.68… Not that many people are invested in Copper, but the key here is that Copper’s rally may unleash Silver.. The two are related, there are technical reasons too, too deep to dive into now… But the EVs, the wiring needs etc. has been behind Copper’s rally…
Did you hear that the POTUS wants to eliminate pennies? Right now, and for the last couple of decades, minting pennies is a losing deal for the Gov’t. It actually costs 2-cents to make 1 penny… Over time all the existing pennies will have been taken out of the system, so… Does that make you want to save your pennies in a mason jar now?
Th Bank of England (BOE ) cut rates last week 25 Basis Points (1/4%) to 4.50%… The BOE thinks that they have defeated inflation…. How’d they do that? Cut deficit spending? No… Have rates that were much greater than the rate of inflation? No…Reduce Money Supply? I doubt it….
Well, the BLS, which many of you have sent me notes through the years and have dropped the L to just BS… Had to under the cover of darkness make an adjustment and take back 105,000 jobs to the surveys for last month, that they had, in previous months added out of thin air…. So, now that there’s a new POTUS, so no reason to make the jobs creation look good? Don’t get me started on how these agencies are not political…. Oh! I almost forgot to mention that the BLS announced that they had to revise the number of jobs (that were reported ) downward for 2024… And still no one from that organization gets fired…
I had a dear reader send me a note the other day asking me what changed, in that years ago, I spent the majority of my letter talking about currencies and didn’t allocate much space to Gold… But all that changed about 6 year ago… why?
Well… There just wasn’t enough going on in the currencies at that time, but there had been quite a bit of interest and news regarding the precious metals, so I announced here in the Pfennig at that time that the format of the letter would be changing….
But, as you will see in a few minutes when you get to the FWIW article today, that currency trading is making a comeback…. So, you won’t want to have missed that!
And then one more piece about Gold… This time it’s from Bill Bonner from his Monday letter: “In the autumn of 1999, US stocks had never been more expensive. It was time to get up from the table…time to walk away from equities…and put our wealth back into real money, gold.
We weren’t trying to fructify it. We weren’t looking for capital gains or for dividends. We didn’t want a good return on our money; we just wanted a return OF our money.
That’s what real money is supposed to do. Not go up. Not go down. Just not go away.”
Chuck again… Back in 2000 Bill announced that his sell the DOW buy Gold was his trade of the decade… Well, it’s been going a lot longer than that as Gold has been the better of the two for over 2 decades…. And still, call your stock jockey on the phone as ask him or her to buy you some Gold… And you’ll hear crickets….
The Data Cupboard this week starts off slow with nothing but a slew of Fed Head speakers out on the road, spreading their lies… This is the week each year when the Fed Chairman goes to Capitol Hill and speaks on the economy to first the Senat on one day, and then the House on the second day… I have this feeling that Fed Chairman Powell, will be treated rather rudely… I don’t know why, it’s just my spider sense tingling…
To recap… The dollar basically drifted in the last 4 trading days, gaining only 3 index points in the BBDXY. But, the POTUS is banging on the tariff drums once again, and judging from the last time we went through this, the markets see to like the tariffs, so the dollar could be in for another rally. Gold has traded to new heights, and is looking at what’s beyond $2,900, and the BOE cut rates last week.. Chuck wonders why?
For What It’s Worth… Well, I teased a bit about this article above, and it’s how currency trading may be making a comeback and it can be found here: Hedge Funds, Banks Boost Currency Trading as Trump Tariffs Revive Volatility – Bloomberg
Or, here’s your snippet: “In the decade Tim Brooks has been buying and selling currencies, he’s grown used to feeling that the action is usually elsewhere. He and his team at Optiver Holding BV, a top trading firm in London, rely on volatility to generate quick profits from sudden moves in exchange rates. But dramatic swings largely evaporated after the global financial crisis of 2008, when the biggest central banks began cutting and then raising interest rates more or less synchronously. Occasional bursts of excitement notwithstanding—such as last year’s surge in the Japanese yen following a surprise interest-rate hike—currency trading ceded the spotlight to the stock and bond desks
With his firm’s average daily foreign exchange volumes doubling from 2024 levels, Brooks has found himself at the beating heart of the trading floor. A few months ago Optiver switched to round-the-clock operations to meet rising demand. One trader was relocated to Singapore to launch currency trading there, and another was moved from the commodities desk to Brooks’ foreign exchange team. “During most of my career, FX has been the asset class with the lowest volatility and the least interest from investors,” says Brooks, who joined Optiver as a trainee and today oversees foreign exchange options trading. “Now there’s more potential for price movement—and a lot more interest coming in.”
Chuck again… Well, there’s chance… Because a Joaquin Andujar used to say: ‘Cause you never know!
Market Prices 2/11/2025: American Style: A$ .6273, kiwi .5640, C$ .6720, euro 1.0323, sterling 1.2364, Swiss $1.0893, European Style: rand 18.4636, krone 11.2147, SEK 10.9048, forint 390.70, zloty 4.0433, koruna 24.2960, RUB 96.75, yen 152.30, sing 1.3660, HKD 7.7931, INR 86.83, China 7.3071, peso 20.61, BRL 5.7914, BBDXY 1,303, Dollar Index 108.23, Oil $73.38, 10-year 4.53%, Silver $31.67, Platinum $983.00, Palladium $974.00, Copper $4.68, and Gold… $2,900.26
That’s if for today… Congrats to the Philadelphia Eagles and their fans, in what turned out to be a very boring game, they won the Super Bowl… I even switched to the menu to try and find something else to watch, but there was nothing that floated my boat, so I went back to the game… Yesterday was absolutely beautiful weather-wise here in S. Florida, after taking care of a lot of personal stuff, I went outside for the last couple of hours of sun on the deck. I’m reading a book now titled “The Things Our Fathers saw” it’s about the accounts of quite a few living service men that fought in the Pacific region in WWII… Our country suffered a lot of lives lost in the region. And only going by what was taught in school, they the U.S. won the war, I am being educated by these living warriors… I have a treat for all the older folks today, Ray Charles takes us to the finish line today with his song: You Don’t Know Me… I hope you have a Tom terrific Tuesday today, and please Be Good To Yourself….
Chuck Butler