Is Silver Ready For Prime Time?

Rocktober 20, 2021

* Currencies & metals gain VS the dollar On Tuesday

* Russia to continue to eliminate their use of the dollar… 

Good day… And a Wonderful Wednesday to you! Well, how about that comeback for the Dodgers yesterday? I, like many Dodger fans that left early, thought that the game was over, but it wasn’t! I don’t have a dog in the hunt here, and actually would prefer the Braves won the series, because the Dodgers won it last year, so I’m not rooting for any team to speak of… Just thought that the 8th inning rally was a good one… Still haven’t been able to enjoy the nice weather here during the day, as the workers are still at it in my backyard… I did get to talk to some neighbors, Gary and Barb, Monday evening, and that was cool since I hadn’t seen them in a while…  And… I have 3 new books to read! There’s a new CB Strike book out, but it costs $100… I’m not a miser, but I am a spendthrift… I’ll ask for it for Christmas… The Jefferson Starship greet me this morning with their song: With Your Love…

Well, our lofty levels for the currencies and metals yesterday morning, were subjected to some price manipulation, but…. They did retain some of their earnings… For instance, the BBDXY ended the day on Monday at 1,159.98, and began the day down to 1,155.52, only to gain back some ground during the day to close at 1,156.49… Still down on the day, just not AS down… The same thing was going on with Gold & Silver… Gold began the day up $16.80, but closed the day up only $4.60, and Silver also saw their early gains reduced… Silver started the day up 61-cents, but ended the day up only 46-cents…  I had wondered out loud in the Pfennig yesterday if the non-dollar assets would be able to hold or add to their early gains… Apparently, the price manipulators weren’t going to have anything like that going on…

In the overnight markets last night… there’s been little to no movement in the currencies, as the foreign markets weren’t taking any flyers on the dollar, not with the way it was treated the night before… The BBDXY starts the day at 1,156.73, so, as you can see, it hasn’t moved much.. Gold, once again was bought in the early trading to the tune of up $15… But once again that profit is held cautiously with the boys in the band ready to pounce when they get the wink and nod from the Government. 

The price of Oil slipped a bit yesterday and trades this morning with a $82 handle… I still think that the price of Oil is going to keep rising… And Bonds got sold yesterday… The Ten year Treasury saw its yield rise from 1.59% to 1.63% yesterday… Again, I see the yield on the 10-year rising through the end of the year.. .Then we can take a rest to view where we are with inflation, and decide which way the yield goes from there…  You may recall me saying that I thought by the time I was sitting in my seats at Roger Dean Stadium watching my beloved Cardinals that the yield on the 10-year would be 2%?   Well… I said that, and I’m sticking to it! 

I just remembered to include the closing prices for Gold & Silver yesterday… Gold closed at $1,769.10, and Silver closed at $23.73..  It’s a real shame that these metals and that includes Copper, haven’t been able to move higher the way they should with inflation kicking tail and taking names later… But they will eventually play catch up… At least that’s how I see it playing out, but then I could be wrong… 

The other day I called the A$ on the carpet, and wondered why their association with their kissin cousin across the Tasman was giving them so much room to rise… And then I read a piece on that talked about how China is buying tons of coal, and while the relationship between China and Australia, is on tenterhooks, it’s not affecting the demand for Australian Coal, and for that reason the A$ has really caught a flyer to higher ground VS the dollar.

So.. did you hear the news that Russia is attempting to boost the activity in the physical Gold Market?   Here’s the skinny courtesy of the good folks at GATA: “The Moscow Exchange plans to further boost gold trading in the worlds No. 2 miner after creating closer ties to the key London market.

The bourse in September started a link so users can trade spot gold at London prices using its own clearing system and with international banks including JPMorgan Chase & Co. and Credit Suisse Group AG providing liquidity. The aim is to make trading easier for participants from miners to retail investors, and the exchange is working on a similar link with Shanghai, possibly for next year.”

OK, onto other things on my mind this morning…  While I’m here though, here’s another ditty from the good folks at GATA: “Copper and silver, the TF Metals Report’s Craig Hemke writes today at Sprott Money, are late to the blastoff of commodity prices, but the big banks trading them are getting long, so silver’s day is coming soon.”

Chuck again… I sure hope he’s right on that one, because with Silver having the most short positions on the books it’s going to take a HUGE rally in the physical metal to get those shorts wiped out… As of Saturday, it would take 130 days of production to equal the ounces sold short… But, and here’s a key that I didn’t see until I looked at Ed Steer’s graph he prints every Saturday… The number of days of production used to be 180-185… So that’s a huge step down in the short positions in Silver, already, so we may be onto to something Big here, folks… I’m just saying…

Ed Steer highlighted a piece by Silver Guru, Ted Butler (no relation that I know of) in his letter yesterday, and I always think it’s worth one’s time to hear what Ted Butler has to say, so here we go… “Silver prices have fallen more than gold prices, yet silver is more tightly held than gold. I’m very bullish on the prospects for much higher gold prices based upon the COMEX market structure (including uncovering the presence of a new gold whale in COMEX futures), but it is downright shocking how much stronger are investor holdings of silver. Silver bullion is the tightest and strongest-held of all commodities and investment assets, but that’s just for openers. It gets a lot better for those expecting sharply higher silver prices. That silver is so tightly-held is bullish enough, but now comes the really bullish part…” – Ted Butler

Chuck again.. Ted’s correct at least as far as I’m concerned… I’ve got Silver that I bought in the 70’s… How’s that for a long term holding? 

Russia continues to eliminate the dollar from use in their country… This from the… “According to the minister, all transactions processed via the US financial system can be blocked by Washington at its discretion, while the threat of anti-Russian sanctions is still relevant.

“Thus, there is no doubt about the expediency of continuing to work on further reducing the share of the dollar in national and international reserves, as well as its use in settlements with foreign partners,” he said, as quoted by Interfax.”

I do believe that Russia is on to something here, folks… It’s a good thing for the dollar, in that if things were still the same as they were when the USSR existed, this eliminating the dollar would go for all of the nation, that got chopped up when the USSR collapsed… All the “stans”, and other countries that now exist, don’t have to follow Russia’s lead any longer… They may choose to do so, but only by their own choice…

The U.S. Data Cupboard yesterday showed that the housing numbers were softer in September than August, but they really had no bearing on the markets per se… Today’s Data Cupboard has the Fed/ Cabal / Cartel’s Beige Book will print… For those of you new to class, the Beige Book is a compilation of each region’s viewpoints on how the economy is performing in their respective region…  It used to be a keenly watched report, but is no longer… 

To recap… Well, we had it all going in the right direction yesterday didn’t we? But then the rug was pulled from under the currencies, & metals once again. They did show gains VS the dollar, but the gains had been watered down… The U.S. Data didn’t help to sell dollars yesterday, and in the overnight markets, there’s been little to no movement in the currencies, while Gold is up $15 in the early trading today. 

For What It’s Worth…  Well, I caught up on my reading newsletters yesterday, and in Ed Steer’s Saturday letter, he highlighted this article that talks about the next shortage for the markets to digest, and it can be found here: Aluminum Shortages Next As “Magnesium Supply Dries Up” | ZeroHedge

Or, here’s your snippet: “This week, the largest US producer of aluminum billet used to make automobiles and building supplies told customers and business associates that output capacity might be curtailed in 2022 due to a lack of magnesium supply.

“In the last several weeks, magnesium availability has dried up, and we have not been able to purchase our required magnesium units for all of 2022,” Matalco Inc. President Tom Horter said in the letter obtained by S&P Global Platts.

Difficult-to-source supplies of raw materials and soaring energy prices are adding to the headwinds, Horter said in the letter.

“The purpose of this note is to provide this advanced warning that, if the scarcity continues, and especially if it becomes worse, Matalco may need to curtail production in 2022, resulting in allocations to our customers,” he said.

Horter said his company will source as much magnesium as possible and other raw materials, such as silicon, to maintain its planned production output for 2022. The warning comes as he told customers they should have contingency plans if supplies tighten.

Aluminum billet cannot be produced without magnesium, which is a strengthening agent and allows it to be strong enough to be used in structural applications, such as automobile frames, engine blocks, and body panels”

Chuck again… Oh boy, just what we need another thing that will affect the economy, thru inflation, coming our way!  UGH!   There’s a good article out there on the International Man site, that I’m going to highlight tomorrow, and it plays into this article about the short in Aluminum…

Market prices 10/20/2021: American Style: A$ .7487,  kiwi .7170, C$ .8101, euro 1.1622, sterling 1.3749, Swiss $1.0826, European Style: rand 14.4848, krone 8.3812, SEK 8.6166,  forint 311.12,  zloty 3.9435,  koruna 21.9497, RUB 70.93, yen 114.22, sing 1.3448, HKD 7.7757, INR 74.84, China 6.3941, peso 20.20, BRL 5.5406,  BBDXY 1,156.73, Dollar Index 93.86,  Oil $82.20, 10-year 1.63%, Silver $24.15, Platinum $1,052.00, Palladium $2,166.00, Copper $4.67, and Gold… $1,785.90

That’s it for today… I’m heading to the hospital after sending out the letter this morning, to see my heart doctor… no problems, just a regular 6-month visit… He’s a Cub fan, and we always have a quick chat about baseball… He’ll be happy to see me at a much lower weight, I’m sure!  The Braves can’t win in Los Angeles, is what appears to be the case… They’ll get two more chances to change that!  Yesterday, I told you about how I had to back off from going to New Orleans for the New Orleans Investment Conference, the granddaddy of them all!  It got me thinking of the last time I attended the Conference… I checked in late to my hotel, and they informed me that the only room they had left was s suite with a balcony… Done! I said!  I was all by myself, and had enough room to invite 6 more people to stay with me!  I was one of the last speakers at the event… I started the presentation by saying, “hey, I may be number 10 on the roster, but I’m number 1 in the hearts of the fans!   The J. Geils Band takes us to the finish line today with their song: Must Have Got Lost…   OK… I hope you have a Wonderful Wednesday, and please Be Good To Yourself…

Chuck Butler