SD Midweek: Overnight Strength in Gold & Silver Has Cartel In BIG TROUBLE

Silver had strength to start the overnight session, and then again throughout the night:

This is pretty much where we would want silver to be. All things considered, the strong-arming of the markets looks to be waning. There is, after all, only so much hurricane. Hurricanes are regional events, and while the costs to rebuild will surely climb, it’s not like hurricanes offer the continued threat of Thermo-nuclear Armageddon, which seems to come front-and-center every few days now. And so silver is looking healthy here for several reasons:

We know that silver is going to have a little trouble at $18.25. Sure enough, the two day tap-and-bounce followed by a dip is very bullish. Everything is set up for the move to the upside. Higher-lows, not screaming “overbought”, and the need for silver to catch-up to gold are all signaling that it is silver in control of the price action and not the central banks. What the silver price really need to accomplish is a commanding break-out above $18.50. Until that happens, the three-way divide between the skeptics, the bears and the bulls will remain as wide as ever. Gold saw the same strength overnight as well:

Looking at the daily, we also see the healthy pullback in the yellow metal. There is also a bonus:

Gold has taken out 52-week highs, both intra-day, and on a closing basis! Gold is also near completion of a healthy pullback, and just like with silver, the cartel will have a hard time here if they are to further suppress price.

Palladium is consolidating between the $925 and $950 price range:

While palladium looks to be set for a dip down to the $925 price level, there could also be a commanding break-out from the sideways channel. The slow grind to the upside is clear, and sooner that consolidation is going to turn into action. The more price consolidates, the more explosive the move can be, and there is nothing bearish about that chart. In fact, it would not be a shocker if price explodes higher to catch up to the trend line. Yes copper has been struggling lately:

The Internet is one massive bail of copper wire, copper is used in power lines, phone lines, and there is countless real-world need for copper right here and right now as rebuilding the hurricane damaged areas of the country begins.  Crude and copper look set to converge on the daily. If this is the case, we would see more downside action in the base metal and higher prices for crude oil.

Fundamentally, these commodities will be important to watch moving forward, and it ties in with other fundamental unforeseen costs. The post-hurricanes rebuilding will depend on several things, including the price paid for raw materials, but that’s not all. Labor, hotels, insurance premiums, and all sorts of other fundamental costs added into the mix could add up to more than initial estimates are guesstimating, and if Irma’s wrongly forecast path is a sign of things to come, the cost to rebuild will be different than expected. Now may be the time to dust off the old cliche that “building always costs more and takes longer than expected”. We shall see.

The dollar has shown strength over the last couple days, but let’s not get it twisted:

There is no meow in that dead cat. The trend in the US dollar/Japanese yen supports this assertion. Looking at the trend since the Trump Trade hype, USD/JPY looks ready to catch down to the dollar, not the other way around. A falling USD/JPY indicates yen strength and dollar weakness. This is further bullishness for the gold & silver prices. If there are any sharp drops, this could indicate price surges in the precious metals. Adding a little confusion to the mix is the yield on the 10-year:

The yield moves over the last two days have been massive. Can bond prices tumble and yield rises as the “risk-on” trade post-TEOTWAWKI? They certainly can, but there are at least two caveats. First, the long-term trend on the daily is lower yields. Secondly, there is an even sharper downtrend line (not shown) since July 7th. So while price can rally and yield can fall, the two trends will be looking to stand in the way of that TNX move. Looking at the stock markets, we really knew this was coming. In fact, just on Monday we alerted the move again:

The VIX looks to be set for a move back down below 10 taking into consideration that short-term, steep trend-line. Of course, one of the easiest things to do to manipulate markets is buy the indexes, sell fear, and naked-short the heck out of gold & silver. It will go on until it can’t.

Just like a juggler cannot keep those balls in the air forever, the Fed, and for that matter the ESF and central banks all around the world, have been juggling these balls for quite some time now. Sure, there is massive air-time, but with it is a massive air-pocket. One miscalculation and they all come down.

We close out the week with a bonus chart to make a point about Wall St VS Main St:

While the release of the iPhone was covered all over the financial press, AAPL closed lower yesterday than on Monday. This will be a test of many firsts. Will consumers shell out $999 starting price for the iPhone X? Is the Apple Watch going to finally get a solid footing? If the release is not what the hype makes it out to be when the phone is finally available, what will justify a share price that is 57% higher than less than one year ago?

Either way, new iPhones means more demand for gold and silver. Just another check in the column for the bulls.

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