The Dollar Gets Sold Overnight…

May 3, 2022

* Gold & Silver continue to be sold… 

* The Russian ruble extends its gains VS the dollar… 

Good Day… And a Tom Terrific Tuesday to you! Monday was not a fun day for Gold…More on that in a moment. I ask this question every year… If April Showers bring May flowers what do May flowers bring?…. Drum roll please…. ( where’s Gene Krupa when you need him?) the answer…. Pilgrims! Hardy har-Har right?…. Neil Young greets me this morning with his song: out On A Weekend…

Well just when you might have thought that the price manipulators had taken enough of Gold and Silver’s value… they hit the metals again on Monday with both barrels blazin’…..Gold lost $33 on the day, but that was far better than the $46 it was down during the day…

Gold closed the day at $1,8640.30, and Silver was down for the 10th consecutive day by.16-cents to close at $22.69…. The dollar remained a mix bag o nuts, on the day but did manage to gain a bit… The BBDXY closed at 1,247… I had a dear reader send me a note asking me “why on earth do I believe the dollar should be not in favor”… Fair enough…. If you look across the landscape of yhe world, you see all the major countries, sans Russia, and you find countries with debt up to their respective eyeballs. You see them all having the same inflation problems… now here’s where we begin to see a difference… countries like New Zealand, Brazil, and Russia have begun to hike rates long before the U.S. Decided to hike rates 6 weeks ago.

I’m speaking from a fundamentals view point, so this may all sound like I’m old and out of touch… but so be it! If not for interventions and manipulators the counties around the world that sport higher interest rates than the U.S. Should be on the rally tracks. India, Russia, Brazil, New Zealand are a few that spot higher rates than the U.S. With inflation soaring around the world, commodities are in favor with astute investors and the counties that produce commodities should be seeing their currencies rally VS the dollar…

So, in my humble opinion…. The dollar isn’t the only game in town… but I’m just an old country boy looking at this logically….

In the overnight markets last night…. The dollar was getting sold… no a
Wait! Is that right? Yes it is! The BBDXY has given back almost 5 index points overnight…. Gold is getting sold again, along with Silver… Oil is up overnight and bond are getting sold early this morning ….Did the dollar bulls get ahead of the markets, with the FOMC meeting tomorrow? It appears that is the case this morning…

The FOMC will meet tomorrow and the markets all agree that the FOMC will hike rates 50 Basis Points, and then set the stage for additional rate hikes at the future meetings…. This is what has the dollar bulls so ramped up….But as I’ve. Explained previously, I don’t believe that they will get to the rate level that is needed to combat inflation, before reversing their actions….

The Russian ruble sure is on the rally tracks these days, and is performing better than any other currency VS the dollar…  I guess this is what happens when you talk about linking your currency to Gold…  

Well I know this doesn’t provide any solace for the damage to the price of Gold…. But, this is interesting for sure! “investment demand for gold in Q1 returned to levels that were last seen during the early months of the pandemic in 2020, fueled by similar drivers: namely, safe haven flows and high/rising gold prices. Heightened geopolitical risk, caused by the invasion of Ukraine, encouraged investment flows, which fed through to a sharp rise in the gold price. Inflation concerns – already supportive for gold investment – were accelerated by the conflict, with data prints showing prices across the globe rising at a multi-decade, record pace.”

I pulled that from Ed Steer’s Saturday letter….

But you know what I’ve always maintained is that Gold id a store of wealth, and should be held that way… not a commodity that gets bought and sold on price fluctuations….. The East holds Gold as a store of wealth, here in the West we, for the most part, treat Gold as a commodity…. Until that mind set changes here in the West…. We will never see a stable Gold price that moves strictly on fundamentals…..

Good friend, Dennis Miller of sent me a notr yesterday, I think just to get me yelling at the walls…. Here’s Dennis: “Read an article where Biden was quoted……and they anticipated it would hurt him as we get closer to the election. The quote, “I’m not concerned about a recession.” …. Yeah I said to myself,,, that’s because you’ll notvexperience a recession like I will!

Typical Government reaction, eh? In two years no one will remember he uttered those words… No one but me…..

Yesterday untold you that the ISM manufacturing index would print and show more slippage, and that’s what it did… The index dropped from 57.1 to 55.4, a significant drop and confirmation of a downward trend…

Today’s U.S. data Cupboard has Factory Orders for March… Doesn’t March seem like a long time ago? Oh well nice of the bean counters to get around to letting us know about this data, eh? we’ll also see the color of the number of Job Openings and as important, Job Quits….

To recap… the dollar was a mixed bag o nuts yesterday, but Gold got whacked good tonthe tune of $33! We learned about fundamentals and why Chuck doesn’t believe that the dollar is the end all… we also learned that the POTUS isn’t concerned about a recession… in the overnight markets… the dollar got sold!

For What it’s Worth….The good folks at GATA sent me this link yesterday to an article on USA GOLD’s site and makes a few god points about Gold that everyone should be aware of and it can be found here

Or, here’s your snippet: ” Inflation, it has been said, comes as a thief in the night, and that it has. The famed British economist John Maynard Keynes warned of the dangers impressed upon an economy by inflation in his 1919 classic, The Economic Consequences of Peace. “Lenin was certainly right,” he wrote. “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Now we are suddenly faced with what could very well go down in history as the great financial shock of 2022 – an inflation rate approaching double digits in just a few short months and a steady stream of headlines that serve as a constant reminder of why we own gold.

“The nature of inflation is widely misunderstood and misinterpreted,” writes former Wall Streeter Dave Kranzler in an analysis posted at “‘Inflation’ and ‘currency devaluation’ are tautological — they are two phrases that mean the same thing.…Dollar devaluation has been occurring since the early 1970s. The value of the dollar relative to gold (real money) has declined 98%. In 1971, $40,000 would buy a 4,000-square-foot home in a good suburb. Now it takes $700,000 on average to buy that same home. Price inflation is evidence of currency devaluation.”

Though the dollar has been in an uptrend against other currencies of late (recently hitting a twenty-year high and pushing the gold price sharply lower), its purchasing power in terms of goods and services is in sharp decline – and that, in the end, is the real reason why gold is now in such high demand. Kranzler says that the inflation wildfires are just getting started and to “hold onto gold and silver.” Similarly, veteran market analyst James Turk recently made some insightful comments during an Epoch Times interview on why gold has long served as a hedge against currency debasement.

“[Gold] does not suffer from entropy,” he said, “It cannot be destroyed. All the gold mined throughout history still exists in its aboveground stock, which if formed in a cube could slide under the arches of the Eiffel Tower.…A gram of gold buys essentially the same amount of crude oil as it did in 1950. This result occurs because the aboveground stock of gold grows by approximately the same rate as world population, causing the supply and demand for gold to remain in balance with the supply and demand of the goods and services humanity needs. Nature provides*

Chuck again… these are words that everyone should memorize and repeat daily…

Market prices 5/3/2022: American Style: A$ .7112, kiwi .6458, C$ .7964,
euro 1.0566, sterling 1.2557, Swiss 1.0279, European Style: Rand 15.8766, krone 9.3002, SEK 9.8356, forint 361.41, zloty 4.4431, koruna 23.3529,
RUB 67.85, yen 129.88, sing 1.3828, HKD 7.8471, INR 76.38, China 6.6085,
Peso 20.35, BRL 5.0359, BBDXY 1,244.74, Dollar Index 103.06, Oil $104.11,
10-year 2.95%, Silver $22.52, Platinum $962.00, Palladium $2,270.00,
Copper $4.42, and Gold $1,867.26

That’s it for today… Our Blues came out strong last night, killed penalties and scored 4 goals to win 4-0! A great start in the playoffs, but it’s only one game….My beloved Cardinals won their makeup game VS KC… they had moved the game start time up so they could get the game in before the rain… And that worked… The rain did come down last night in buckets! Well, this coming Sunday is Mother’s Day…. I know I always carry on about how I missed my mom, and how she was my best friend…so won’t go there again, just saying I miss you mom… Counting Crows take us to the finish line today with their song: Mr. Jones….gee I used to play that song on my guitar! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler