Precious Metals … Silver & Gold

The ‘Non-Confirmation’

Something’s not right in the precious metals sector.

Gold’s just off -8%, from its highs while other monetary metals (Palladium, Platinum, Silver) are far below their highs; silver’s off a whopping -51.75%, from its 2011, highs.

In addition, as we’ll see below, silver (SLV) is just now contacting the right side of a trend line and potential downward channel structure that goes all the way back to the lows of 2015.

The ‘Squeeze’ of 2021

Below on the weekly chart of SLV, is a point labeled “1”.

That’s the location of what turned out to be a right-side trend line contact. Back then, an update on the ‘squeeze’ was posted, linked here.

Taken from that update was the following (emphasis added):

Those attempting garner forces (the little guy) to move the markets, such as silver, will find out soon enough who’s in control … and it’s not them.

It’s unlikely silver is going higher any time soon. There could be some upward spasms as the crowded trade exhausts itself; it’s likely we’ve seen the SLV highs for quite some time.

So, here we are nearly two years later; SLV never posted higher than the February 2nd, squeeze of 2021.

So, what’s next? Is there something else going on?

We’ll look at that question after the charts.

Silver SLV, Weekly

First, is the un-marked chart.

Next, we see a pattern that’s not so clear without mark-up.

For SLV, to break out, there needs to be an absence of motivated sellers (prices drift higher) or sufficient buying demand to overcome the downward trend.

Inflection Point

For an idea of what’s likely to happen next, we’re going to go to an unlikely source; Daniela Cambone and Gregory Mannarino.

It’s not about ‘controlling’ inflation and it never was, going all the way back to 1913. It’s about the ‘end game’, as discussed by Mannarino.

“Eliminate The Middle Class” (time stamp 11:40)

The sticky wicket is the ‘debt bubble’ and the ‘elephant’.

The Elephant Grows

The chart of silver (and other precious metals) and its non-confirmation with gold, could be an indicator of debt collapse and demand collapse first, before hyperinflation.

Multiple times a day now we have reports like the following flooding into the marketplace:

COVID Vaccines Are “Obviously Dangerous” And Should Be Halted Immediately, Say Senior Swedish Doctors

‘Normalization’ Of Emergency Use Authorizations Concerns Health Experts

CDC Says Stroke Concerns Over Pfizer Jab Warrant Investigation

They Promised “Safe And Effective”; We Got “Sudden And Unexpected”

Pentagon “Exploring” Back-Pay For Troops Kicked Out Over COVID Vaccine Mandate

Multiple Young Athletes And Former Athletes Died Suddenly This Past Month

Doctor Calls For Withdrawal Of Pfizer, Moderna COVID-19 Vaccines Following New Research

The above list is just since yesterday and it’s only 2:00 p.m., Central Time, today!!!

Monetary & Manufacturing

Silver is unique more so than gold, in that it’s an industrial metal as well as monetary.

The collapse in manufacturing demand could be the reason silver’s not confirming gold’s move.

It may also be telling us, as the effects of the elephant take hold, a huge liquidation of all assets could be coming; paradoxically as the need for fiat cash (not precious metals) to pay off debt, increases.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Gold Bulls … Go Berserk … Again

Testing The Trend

Since the lows last November, to the close this past Friday, gold (GLD) has moved higher by a decent but modest 15.4%.

Naturally, the opportunists are out telling us ‘We’ve been warned’, ‘this is it’, ‘it’s going to the moon’ … yet again.

With that backdrop, we’re going to look at the precious metals facts, not the hype.

‘Precious metals’ because there are only four that have ‘currency code’ classifications, i.e., are classified as an asset with ‘currency like’ monetary characteristics.

Currency Codes

Gold, Currency Code: XAU

Silver, Currency Code: XAG

Palladium, Currency Code: XPD

Platinum, Currency Code: XPT

The Market Itself

Way back over a century ago, Wyckoff discovered the key to understanding the next likely move of the markets was the study the market itself (not fundamentals).

Wyckoff essentially ‘locked himself in a room with just a stock ticker and phone line’.

Months later, when he emerged, ‘Studies in Tape Reading‘ was the result.

We’re going to use his insight from that text.

That is, what’s the market’s saying about itself? What’s the next likely direction?

Off The Highs

For some of the precious metals, they’re off their highs by a significant amount (percentages approximated).

Gold (GLD): Down -11%, from highs

Silver (SLV): Down -55%, from 2011, highs

Palladium (PAH23): Down -47%, from highs

Platinum (PLJ23): Down -53%, from highs

All of the precious metals are down nearly 50% or more, except gold.

In the case of Platinum, it’s near 1980s levels!

So, where’s the inflation?

Oh wait, here it is … one more time.

That’s not saying ‘money printing’ has no effect. There are a lot of moving parts. Intentional destruction of the food supply is just one of those parts.

Old School Analysis

Hypothetically, if you dropped an ‘old-timer’ into the markets at this juncture (without him knowing the ‘hype’), and showed him all four charts of gold, silver, palladium, platinum, and asked ‘what’s happening?’

What’s his response?

After a brief look at the charts, he would likely say:

‘Gold’s move higher is not being confirmed by the other precious metals’.

Note that all four metals peaked together during the inflation spike of 1980.

Ergo: At this juncture, something’s wrong.

Either the other metals are going to ‘catch up’ to meet gold or gold is going to come down to meet the others.

That is of course, unless this time is different … somehow.

With that, we’ll look at the chart of gold to see what it’s saying about itself.

Gold GLD, Weekly

We’re starting with the unmarked chart.

Note: Elder’s Force Index scale is expanded to show the nuances of GLD, price action.

Next, we see we’re at a test of the trendline in place for 16-months before the downside breakout of July, last year.

Moving in closer, we have a wedge formation prior to the up-move last week.

Is this a breakout to the upside or a throw-over?

At this point, it’s unknown.

We can see that Force Index is below where price action entered the wedge during the week of November 11th.

Less force up into resistance (trendline), paints a slightly more bearish than bullish picture.

The ‘Why’ Comes Out

As if on cue and in classic Wyckoff style, we have a ‘why‘ for the move off the lows of last November.

Classic Wyckoff, because he said the ‘why’ of a move comes out after the fact.

There you have it; China buying gold last November and December.

During this move from the recent lows, it was certainly a trading opportunity for the bulls … but from a strategic standpoint, what happens next?

The Non-Confirmation

Non-confirmations can last a long time.

For example, the Oil & Gas sector XOP, declined for eight months, from April 2019 to January 2020, before the price of oil (USO) finally broke lower.

With the ZeroHedge article just released a few hours ago, we can expect at least a blip higher at the next GLD, open.

After that, we’ll see.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279