- The dollar rallies like there’s nothing wrong with the U.S. economy
- Is the short selling coming to an end in the metals?
Good Day… And a Marvelous Monday to you! Well, in just 4 days of games the field of 64 is down to the Sweet Sixteen, and neither of the teams that I follow are in that field. UGH! My beloved Cardinals finished Spring Training on Saturday with a win VS the Marlins… They were 13-9 during spring games, which is better than most thought they would be… Now the 162 game schedule come into play… I feel it will be a Long year for my redbirds… Oh well, at least baseball is back! Sly and the Family Stone greet me this morning with their song: If You Want Me To Stay…
Well, what an up and down week it was last week for the dollar… First rallying, then getting sold off for a couple days only to finish the week rallying. The BBDXY ended the week at 1,205, but in the after hours trading the PPT must have entered the markets because the BBDXY rose 5 index points in that time…
I say the PPT must have entered because the dollar was losing ground fast, and had ended the week at 1,205… But then magically it turned around and rallied… It had to be the PPT… I’m just saying…
Gold & Silver saw a week that they’d love to forget… Gold ended the week at $4,492 and Silver at $67.94… The metals, including Platinum, Palladium and Copper saw their levels drop tremendously too… Gold’s weekly loss the greatest it had seen in 6 years!
Inflation seems to be the trigger point here… It seems that Countries all over the world are seeing inflation rise, and the threat of even bigger rises in the coming year are upping the forecasts for interest rate hikes for these countries, including the U.S. and higher interest rates is what is pushing the metals downward…
But if inflation really takes off… and the Central Banks are behind, the currencies of those respective countries including the U.S. will get hammered and the metals can rebound quickly… Think back to the late 70’s the U.S. Fed was falling behind on raising rates, and Gold took off for the moon, until Paul Volcker put an end to being behind…. So, don’t despair this isn’t the end for the metals… In fact, you might want to pick us some more to round out your investment portfolio…
I want to mention that in previous times when it looked as though Gold wasn’t going to ever gain a bid again, that it came back strongly… no, the past does not reflect what will happen in the future, but I just wanted to throw that out there…
The price of Oil rose to end the week trading with a $98 handle, as the Iranians issued a statement that said that the “Strait of Hormuz is closed”
And the 10-year’s yield rose to 4.28% to end the week…
In the overnight markets last night.. More dollar buying was added to the after markets move on Friday, and we start the day/week with the BBDXY at 1,217!!!! The currencies, even the Petrol Currencies, all look as though they had a major disease and were told to go to bed to stay. This dollar buying is getting ridiculous… The dollar is so overbought that its off the charts! From what I can tell it’s all “safe haven” buying”… Safe haven my arse!
Gold and Silver start the day / week seeing more selling, with Gold down $232 and Silver down $4, but what to my wondering eye is appearing? It looks like the selling is coming to and end this morning, but we’ll have to play out the day to see what happens..
One would have thought that the short selling of Gold & Sliver is about to end, as they’ve taken about as much blood from the turnip as possible, but the short seller are squeezing some more out this morning… Along with the short sellers, we probably have some outright sellers to pay off their margin calls… I’ve told you previously that I ran a margin debt at Stifel Nicolaus many moons ago, and there was a time when the margin guys would have to call clients and tell them that they need to deposit more money or sell stocks and if they didn’t, we would sell the stocks for them…. You don’t mess around with a margin call…. I’m just saying…
The price of Oil bumped higher to start the day/ week with a $99 handle… Don’t know what the Oil traders are waiting for, they’ve hemmed and hawed for a long time now holding the price of Oil below $100… Just go ahead and push it over the figure, it’s going to come sooner or later, and might as well get it over sooner…
And the selling of the 10-year has really pushed the yield higher and the 10-year starts the day/ week trading with a 4.40% yield… No Fed Head yield control going on here… not yet anyway! Treasuries have 3 things going against them right now… 1. Inflation fears 2. No more rate cuts 3. The length of the war with Iran… I don’t know or will make a suggestion as to where the yield will go for the 10-year, but it’s in trouble for sure… I wonder about those guys from Deutsche Bank who were shorting the 10-year about a year ago… Did they continue? If so, they are swimming in profits now…
Bloomberg.com has this synopsis of what’s the markets are doing right now… here’s a quick snippet of the article on Treasuries…. “Global yields surged as concerns that oil prices would stoke inflation intensified. The front end of the curve led gains in Treasury yields, with the two-year up 10 basis points to top 4% for the first time since June. Two-year UK gilt rates climbed to the highest since February 2024 after traders priced in four Bank of England interest-rate hikes this year.
“This is not a moment to be optimistic: all the latest developments point to a further deterioration of the situation,” said Christopher Dembik, senior investment adviser at Pictet Asset Management. “Looking back at 2022, the stock market was resilient until it was clear the impact of the war in Ukraine wasn’t transitory. It’s reasonable to assume the same thing.”
Chuck again… Poor bonds… Poor metals… Poor stocks… they are all getting sold,,,
I saw a headline on the NY Times that said: “The U.S. Economy Is Insulated From High Oil Prices. Americans Aren’t.” It was behind a paywall so I couldn’t read anymore of the article, but I’m sure it outlined what I’ve been telling you and that is the U.S. only imports 20% of its Oil from the Gulf states, so it’s shock to the U.S. is null and void for now… But Oil is worldwide commodity, and therefore the price of Oil reflects the effects on the rest of the world… And gas is tied to the Oil price, and that’s where it will hurt the U.S. consumer… And the longer the war goes on, the greater of the fears of a real problem for the U.S. consumer…
Circling the wagons regarding the metals…. I have the thought that the SPTs are behind the selloff.. And from what I read the SPTS have major short positions on their books that will expire in about a week…. Their only goal is to push gold and silver as low as possible so those options expire worthless and they pocket maximum profit. This exact game has run for fifteen years, and I’ve been harping about it for 15 years! The low for Gold & Silver is about to be hit, and then we can concentrate on a recovery..
The U.S. Data Cupboard this week is void of any real economic data… But we will get plenty of Fed Heads our speaking…. What will they be saying? I sure hope they attempt to get the markets to realize that there will be no more rate cuts this year…. There are a couple of housing and other sundried data prints this week, but they are not market moving… period…
To recap… What a week for the metals…. They got sold harshly and couldn’t find a bid anywhere… Gold hadn’t had a bad week like that one last week for 6 years! But just when it looks like no one wants to buy Gold.. It will recover, or it has recovered previously. The Strait of Hormuz is officially closed by the Iranians…. And the price of Oil continues to rise… But so does the price of fertilizer, and LNG, and natural gas… The dollar had a very eventful week, last week… But is rallying since closing in the BBDXY on Friday at 1,205….
For What It’s Worth… I found this article on my watch yesterday… Really… my watch posted a headline that led me to this article… It’s about how the Fed is flashing red flags but the stock jockeys aren’t paying attention and it can be found here: The Federal Reserve Is Raising Red Flags, and the Stock Market Isn’t Listening
Or, here’s your snippet: “As was widely expected, the Federal Reserve’s Open Market Committee (FOMC) held the Fed Funds Rate steady last week at a target of between 3.5% and 3.75%. Although conceding that “economic activity has been expanding at a solid pace,” the FOMC also notes that “inflation remains somewhat elevated.”
It’s not particularly remarkable language. In fact, these exact words appeared — verbatim — with the statement released following January’s assessment.
There are a couple of red flags, however, that aren’t necessarily showing up within the Fed’s most-watched actions, like adjustments to the Fed Funds Rate.
A red flag is waving against a backdrop of blue sky.
Red flags for the economy
One of these newly waving red flags is the fact that, while still contained, the Federal Reserve’s Open Market Committee raised its personal consumption expenditures (PCE) inflation outlook for 2026 from a prior estimate of 2.4% to its current estimate of 2.7%. On a core basis (which excludes food and energy costs), the 2026 personal spending outlook was raised from December’s forecast of 2.5% to 2.7% now.
In this vein, it’s also worth noting that earlier on Wednesday, the Bureau of Labor Statistics reported producers’ overall input costs jumped 3.4% (annualized) in February, reaching its highest level since February of last year. Core producer inflation (which also excludes food and fuel) edged up to an annualized rate of 3.5%. Although both numbers are still within manageable tolerances, each also came in well above expectations.
The Fed still ultimately expects to ratchet interest rates down once this year, by one-quarter of one percent. The margins in which this can comfortably be done, however, have just shrunken.
Then there’s the post-announcement press conference where Fed Chairman Jerome Powell answered questions about the Federal Reserve’s decision. Although none of this commentary is official policy, unofficially, his comment is telling to say the least: “The rate forecast is conditional on the performance of the economy, so if we don’t see that progress, then you won’t see the rate cut.”
And yes, the unpredictable duration and impact of the conflict in the Middle East are key contributors to the underlying uncertainty of the matter.”
Chuck Again… Not exactly something that we didn’t already know, but more or less a confirmation of what I’ve been telling you…
Market Prices 3/23/2026: American Style: A$ .6921, kiwi .5770, C$ .7270, euro 1.1488, sterling 1.3265, Swiss $1.2606, European Style: rand 16.91, krone 9.7404, SEK 9.3987, forint 343.16, zloty 3.7304, koruna 21.3445, RUB 83.34, yen 183.34, sing 1.2664, HKD 7.8298, INR 93.97, China 6.9112, peso 18.08, BRL 5.3161, BBDXY 1,217, Dollar Index 100.88, Oil $99.34, 10-year 4.40%, Silver $63.87, Platinum $1,802.00, Palladium $1,395.00, Copper $5.31, and Gold $4.260
That’s it for today….Well, yesterday was my birthday, and I was treated with biscuits and gravy for breakfast and then my favorite pizza for dinner… And yes, I’ve gained some weight while I’ve been down here this winter, and now I’ve got to get to losing them! And eating biscuits and gravy is not the way to go about losing weight! Our house guest leaves today, so no more going out to eat and so on… Spring is now here and the days are getting warmer again… I’m now 71 years old, and for the last 19 years, I’ve been carrying around cancer and cancer treatments… That makes my age more like 85! We were talking the other day, and I said, “in my youth I did whatever it was we were talking about” That was a very long time ago… The Easybeats take us to the finish line today with their great 60’s song: Friday On My Mind I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler