- currencies are getting taken to the woodshed daily
- The metals are picking up the pieces…
Good Day… And a Tom Terrific Tuesday to you! Oh me, oh my… What the hell happened last Friday to Gold & Silver? At 10:05 CT Gold was up $55, and had gone over $2,400… and Silver was up $1.00, and then the bottom fell out of the two, and Gold ended the day down $29, and Silver down 44-cents… I would have to say that that was the largest one-day engineered takedown of Gold that I remember seeing… I know that I usually don’t start the letter with bad news like that, but it was too large of a takedown to ignore… Radiohead greets me this morning with their song: Karma Police…
I think that the short paper traders just shot their wads, so to speak, on taking down Gold & Silver, last Friday… I’ve got something on that later in the letter today… And the PPT was also in the markets buying dollars, with the BBDXY up 8 points… And you know what I found on Bloomberg about this selloff of Gold? That the rally was seen as overstretched… That’s it, that’s their only excuse for this selloff…
What the hell has happened to investigative journalism? Oh, well, yesterday, Gold tried to pick up the pieces of Friday’s takedown Yesterday, and Gold rallied strongly along with Silver at the overnight opening Sunday night for us. But… the short paper traders made another attempt to take Gold down again, but this time they must have run out of ammo, because then Gold came back again in the Monday trading session and gained $39.10, to close at $2,382.10… Silver closed up 97-cents and a price of $28.80
So, yesterday, while I was getting stuck my two different needles, the dollar continued to rally gaining 2 index points in the BBDXY moving it to 1,261… Crazy, I know what you’re thinking, but once the PPT came in last week, there’s not a currency trader out there that’s going to go against their treasure chest of funds to defend the dollar… Gold was up $9 yesterday, and Silver was up 7-cents to $28.98… I’ve got an interest take on Gold’s surge in price in the FWIW section today, and from the Financial Times no least!
The price of Oil has weakened a bit, and traded just below the $86 handle at closing yesterday, The 10-year has climbed to 4.61% yield… I said last week that I truly believed that it would breach 5% once again, and hoped that I hadn’t jinxed the rise in yield, but so far so good…
Someone asked me why I concentrated on the 10-year Treasury… Well, the 10-year is what they call the bellwether bond of Treasuries, everything from Mortgages to refi’ loans are price off the 10-year, so there, now you know !
In the overnight markets last night… Well, overnight Gold got sold again, this time by $12, and Silver is seeing some selling overnight too to the tune of 60-cents… Now those are normal figures to be seen in trading don’t you think? The dollar was bought some more overnight, and is up 2 index points this morning, while Oil is getting sold, and has fallen further in the $85 handle… and the 10-year added some more yield overnight, and trades this morning with 4.65% yield.
Well, have you heard the latest on Russia’s $300 Billion that was frozen by the U.S. when Russia invaded Ukraine? Well, sit down because this is going to be a long story… (not really, just making it sound like you really need to read this!) The European Commission is calling on the U.S. to take the $300 Billion and pay Ukraine, or not pay the principal but to pay the interest… Unfortunately, there’s been no interest earned on the money, so if the U.S. and Europe want to pay interest to Ukraine, it will be with newly minted dollars, more debt in other words…
E.J. Antoni and Ed St. Onge were the writers that broke this story at the Heritage.com this past weekend… The full article can be found here: Is the Biden Administration Trying To Destroy the Dollar? | The Heritage Foundation
But I can tell you without it being a spoiler alert, because the link above does that… That these deep thinkers think that this would be a death knell for the dollar and the euro, because all countries that hold reserves with these countries would be removing them quickly, and converting those funds to Gold… And I agree!
You may recall the goal of freezing these funds was to instigate panic in Russian markets, culminating in bank runs and general unrest, perhaps even leading to the ouster of President Vladimir Putin himself.
I guess the propeller heads that thought of that, need to go back the drawing board, because Russia’s economy outdid the U.S. percentage wise last year!
This seems as though its a metals only letter today, but that’s not true, it’s just that metals are the hot topic right now, and so they garner all the press! I received this from the good folks at GATA” commenting to Eric King at King World News, GoldMoney founder James Turk says silver’s sharp fall on Friday began when the London physical market closed and the New York paper market took over. But Turk thinks it unlikely that there will be too many more paper slams of silver because some metal is needed to support such slams and the shorts just don’t have enough.”
Chuck again… now wouldn’t that special, in my best church lady voice, made popular by Dana Carvey…
Well… April has not been a good month for the currencies… The euro has fallen to trade in the 1.06 handle, Aussie $’s are trading with a 64-fent handle… and the rest of the currencies are looking any better… They really got taken to the woodshed late last week, and there’s been on sign of recovery since… Time to batten down the hatches, and I’ll ask the good witch Glinda to let us know when it’s sage to come out again…
The U.S. Data Cupboard last week saw PPI (wholesale inflation) and it had increased in March from Feb from 1.9 to 2.8%, so another nail in the rate cut folk’s coffin… And get this! Consumer Confidence fell 2 points from 79 to 77! Holy Cow, how did that happen, it’s obvious that someone added the points wrong!
The Data Cupboard start this week today, with March Retail Sales… The BHI indicates to me that this will be better than the average bear, and that is because March was Easter month, and the buying for Easter will be included in the March numbers…
To recap… Gold & Silver got the snot knocked out of them on Friday last week… It was ugly, because the short paper traders waitied until Gold reached a gain of $55 on the day and traded over $2400 before the short paper traders took it down. Silver was also soaring before being taken down… The PPT was in to support the dollar and the dollar is the strongest it’s been in a month of Sundays now… And there’s no currency traders out there that are willing to step in front of this speeding bus… and take on the PPT!
For What It’s Worth… This article came to me via the good folks at GATA, who were quite surprised by the Financial Times admittance that Gold is surging… This article can be found here: Gold is back — and it has a message for us (ft.com)
Or, here’s your snippet: It’s easy to mock gold bugs, but their moment may finally have come. The precious metal has been breaking out recently amid higher than expected inflation in the US, and general anxiety over everything from geopolitics to the November presidential elections to where monetary policy and markets go from here.
All these things are predictable reasons for gold to surge. But there are deeper, longer-term messages in this rise that investors should pay very close attention to.
Let’s start with inflation. Whatever happens over the next few quarters, I’ve long thought that we were in for a period of “higher for longer” inflation. Aside from the possibility of a technology-driven productivity miracle, it’s hard to think of a macro-trend at the moment that isn’t inflationary.
The economy is running hot — from fiscal stimulus in the US to more supply chain redundancy as countries de-risk, to all the capital investment required for the clean energy transition and re-industrialisation in rich countries. Even ageing US baby boomers are likely to be an inflationary force, since they have health, time and plenty of money to spend.
Gold is historically an inflation hedge. But it’s also something investors turn to when they are worried about the stability of the status quo. It will languish for decades, then break out when the world is at a major pivot point, as it is now.
It’s no secret that the Washington consensus — which expected emerging nations to fall in line with free-market rules written by the west — and the postwar Pax Americana are over. Trade tensions between the west and China are growing. Meanwhile, the weaponisation of the dollar following the outbreak of war in Ukraine has quickened moves in many countries, most importantly China, to sell Treasury bills and buy gold as a hedge against America’s financial might. It is easy to imagine this weekend’s escalation in Middle East tension boosting gold further.”
Chuck again… The writer goes on to say that she believes there will be a devaluation of the dollar in the new Presidential term, and any rumors of that happening would certainly help Gold soar more…
Market Prices 4/16/2024: American Style: A$/6428, kiwi .5892, C$ .7235, euro 1.0639, sterling 1.2451, Swiss $1.0954, European Style: rand 18.9734, krone 10.9692, SEK 10.9205, forint 370.80, zloty 4.2775, koruna 23.3167, RUB 94.10, yen 144.02, sing 1.3538, HKD 7.8316, INR 83.53, China 7.2386, peso 16.80, BRL 5.1555, BBDXY 1,263.67, Dollar Index 106.25, Oil $85.03, 10-year 4.65%, Silver $28.42, Platinum $977.00, Palladium $1,042.00, Copper $4.31, and Gold…. $2,376.88
That’s it for today… Bah Humbug… My beloved Cardinals just aren’t hitting the ball in clutch times, like when runners are on base! They’ve stumbled out of the gate, and the rest of the pack (other teams) haven’t… UGH! Well, I saw my oncologist yesterday, and my bloodwork was fine, no change in the size of the tumor in my jaw, and so we’re going in a different direction, more to come when that happens… Well, spring was over last weekend… As summer temps were here! I don’t like opening out pool in April, too much cr$%$ to pull out of the water, but if these temps remain, we may as well open it! Went to City Park for the City Soccer Game with good friend, Rick, on Sunday, it was a beautiful day and the City team won! YAHOO! Junior Walker and the All-Stars take us to the finish line today with their song: Shotgun… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler