- Currencies & metals rally on Tues, but get sold overnight…
- Gold / Oil ratio spreads out, what’s that mean?
Good Day.. And a Wonderful Wednesday to you! I have to say that i was really impressed by the Cardinals young pitcher last night, as he outdueled the superstar pitcher for the Pirates… I was down and out yesterday and slept most of the day. You may recall me telling you that I woke up with my stomach upside down, but it was setting down… Well, that “settling down” didn’t last, and I had to take some nausea medicine, then fell asleep only to wake up at 2 PM, had some chicken noodle soup, and fell back asleep… UGH Buddy Miles greets me this morning with his song: Them Changes…
And Them Changes brought about some major dollar selling yesterday, as the BBDXY lost 8 index points on the day, and finished yesterday at 1,216… Gold continued to rebound from last week’s selling, and gained $96 on the day to close at $3,431… And Silver gained 25-cents to close at $33.29… Well, I guess the Chinese have proven that the Gold price needs them badly… Last week the Chinese were on their Labor Day holiday that lasted 5 days, and Gold sunk… Upon the return of the Chinese Gold has gained $220! And Silver has gained too, but lags Gold, with the Gold/ Silver ratio remains at 102…
I talked yesterday about how there are reports of a Silver short squeeze… And while I can’t seem to find any hard evidence of a short squeeze, I do now that there is a silver shortage, and experts predict that the deficit will continue in 2025. I would think that the additional usage of physical Silver is increasing with the implementation of Silver in Solar panels, and other industrial uses… So… If you’re looking for a bargain metal to buy… Wink, wink…
The price of Oil bumped higher again yesterday and ended the day trading with a $59 handle… Again, I’m not seeing the justification of bumping the price of Oil higher, given the OPEC folks are talking about swamping the glove with a slew of Oil… I’m just saying…
And The 10-year Treasury bond was stuck in the mud yesterday, as the bond boys decided to wait-n-see what the FOMC does this afternoon before making a decision as to where bond yields will go…
In the overnight markets last night… The dollar started the overnight session getting bought, but that didn’t last too long as the selling of the dollar persisted, and in the end, we start today with the BBDXY down 1 index point to 1,218… Well, Gold’s two days of being up over $90 had ended today… I know, I know, the day has just started there’s time to come back, but… Gold is seeing short paper trading enter the markets again, and some profit taking thrown in to start our day down $44… And Silver is not cooking with gas this morning either as Silver is down 30-cents to start the day…
I figure the metals had gone too far too fast and this selling is just reminding everyone that the wolf is always at the door, and that the metals assets are not a ONE-WAY STREET!
The price of Oil remained in the $59 handle overnight, and the 10-year Treasury saw some selling overnight, and its yield rose to 4.33%… Not a huge move upward, but a move nonetheless…
Well, this FOMC meeting this month is a two-day meeting filled with lots of board games being played… In fact, I think you can hear a Fed Heads proclaiming that “you sunk my battleship” HA! That means the 2nd day of the meeting will be chock-full-o-discussion about how to lie to the public about what they plan to do going forward… If the dollar is getting sold like it is before the decision on rates, I don’t see it gaining any ground after the decision on rates, which in my opinion will be no change…
I found this on Kirco.com this morning and is an interesting take on recession indicators, that quite frankly I hadn’t heard of before… here you go: “Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, wrote in a research note Tuesday that the growing discrepancy between oil and gold prices is sending strong signals that economic conditions may continue to deteriorate to historic levels.
“In 100 years of annual performance, 2025’s year-to-date decline of almost 21% in oil prices versus gold’s 26% gain has brought the disparity to nearly 50%—the fourth-largest difference from 1925 to 2025,” he said.
Chuck again… So, see? You can teach an old dog a new trick! What, you don’t think I’m old? Shoot Rudy, when I was born the Dead Seas wasn’t even sick yet! HA! The last time I was in the hospital the nurse said “can you tell me your name and birth date”, to which I replied, “yes I can”… After gasping she said what is your name and birth date… I said Charles Butler, 3/22/55.. I may be 70 and the paper tells you that I’m old but I know I don’t look that old! she laughed out loud… I knew then that I shouldn’t use that line any longer!
Ok, sorry for that trip down the rabbit hole… You know me and my fat fingers… They start typing and the next thing we know is I’ve gone on and on about something… Oh, well, it just show to go you that you get what you pay for!
The U.S. Data Cupboard yesterday had the March Trade Deficit, and it was a doozy! I told you it would come in very high, and it did just that, printing at $140.5 Billion… I don’t think that figure made the POTUS a happy camper, and he just needs to be patient, as future trade deficit prints won’t be as nasty, as I’ve pointed out here previously, Companies have been front loading their imports to steer clear of the tariffs…
Today’s Data Cupboard just has the FOMC meeting on the docket. And of course, the press conference after the rate decision is made, to tell us lies… I’m just saying…
To recap, the dollar continued to get sold yesterday with the BBDXY losing 8 index points. Gold gained $96 and has gained $220 since the Chinese came back from their 5-day holiday. Silver lags Gold, and the ratio between the two remains at 102… The FOMC finishes their two-day meeting this afternoon… Chuck has stated and keeps saying that the Fed Heads will keep rates unchanged… If they were to surprise the hell out of the markets, and cut rates, they would be indicating to everyone that there are problems in the economy… The overnight markets brough about some selling of the metals, and we start our day today on a sour note…
For What It’s Worth… Well, anytime Ron Paul writes something, it catches my eye, and this one did just that! This article is about how the DOGE group didn’t fare too well, because they didn’t have the legislative backing, and it can be found here: The Empire Strikes Back – The Daily Reckoning
Or, here’s your snippet: “News this week that Elon Musk will soon be departing his “Department of Government Efficiency” (DOGE) is a grim reminder of what happens when you challenge big spending DC. Unfortunately, the lesson once again is that when you challenge the empire, the empire eventually strikes back.
President Trump rode into office with the help of Elon Musk’s ambitious plan to cut two trillion dollars in spending and slash useless and bloated government bureaucracies. Opinion polls demonstrated the huge popularity of the “Department.” Americans were excited when DOGE came to DC.
The exposure of the real harm being done to the country by agencies like USAID and others reinforced the idea that much of the “Federal bureaucracy” was simply not needed. Although Musk became a figure of hate for the entrenched special interests, to the large chunk of America forced to pay for Washington’s excesses he became a hero.
Many in Congress, seeing its popularity, actively embraced DOGE. Suddenly those who helped us rack up 37 trillion in debt were talking about making huge cuts and posing for photos with Musk.
Unfortunately, after the photos were taken and the hoopla had died down, Congress returned to doing what it usually does: nothing. There is no way for a DOGE to succeed without the Legislative Branch enshrining those cuts in legislation. But when the massive “Big Beautiful” spending bill was introduced, the spending cuts were nowhere to be found.”
Chuck again, the title of his article is: The Empire Strikes Bank” Very appropriate, in my opinion!
Market Prices 5/7/2025: American Style: A$ 64275, kiwi .5989, C$ .7248, euro 1.1364, sterling 1.3348, Swiss $1.2140, European Style: ramd 18.2723, krone 10.2728, SEK 9.5957, forint 355.93, zloty 3.6392, koruna 21.9503, RUB 81.02, yen 142.31, sing 1.2911, HKD 7.7593, INR 84.33, China 7.2254, peso 19.71, BRL 5.7162, BBDXY 1,218, Dollar Index 99.41, Oil $9.60, 10-year 4.33%, Silver $32.93, Platinum $969.00, Palladium $984.00, Copper $4.65, and Gold… $3,386.75
That’s it for today… I’m feeling much better today, you can figure out how unwell i felt yesterday, as I was offered two tickets to today’s day game at Busch stadium… Longtime readers know my affection for day games! To me, there’s nothing like sitting in the warm sun at a ballpark watching a baseball game! That’s why I enjoy Spring Training so much! Mott The Hoople takes us to the finish line today with their song: All The Young Dudes… I hope you have a Wonderful Wednesday today, and will continue to Be Good To Yourself!
Chuck Butler