There's a Precious Metals rally in here someplace

countryBoy641

countryBoy641

$CRB index is up 153% in the past 22 months (May 2020).
Compared to other fiats, U.S. Dollar seems fantastic, but empirically not.
Silver and Gold are the ultimate "conversation pieces" when it comes to inflation.
Much more so than "AGs",
as in "Hey did you see how much CORN was up today?"
or "Did you see that action in the SOYBeans today" ?
The CBs hate precious metals.
The nouns are too familiar.

PMs can stay suppressed as long as the $USD stays strong compared to other fiats.
But when that changes, there will be a change in PMs.

$USD.jpg
 
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With the Fed about to tighten at the fastest pace in three decades, it's a good bet the USD will strengthen quite a bit over the next couple of years, and precious metals will struggle.
 
Specterx said:
With the Fed about to tighten at the fastest pace in three decades, it's a good bet the USD will strengthen quite a bit over the next couple of years, and precious metals will struggle.
More...

I'd like to think you will be right about that,
but as this is the TA section of this forum, let's just go to the chart.
I don't think the chart supports your argument.
Gold and Silver are tightly paired here.
And ...
I think $GOLD is getting ready to breakout.

Gold_Silver_22.jpg


MACD left hand cross coming on the monthly print.

Gold_MACD leftHand Cross.jpg
 
I don't see breakout happening anytime soon.

Here is $CRB and spot Gold XAUUSD. One "to the moon" other basically flat for past 2 years. And if the side by side charts don't show it enough, Spread Ratio indicator at bottom is almost an exact duplicate of $CRB itself because of how flat Gold has been.
! CRB XAUUSD.png
 
countryBoy641 said:
I'd like to think you will be right about that,
but as this is the TA section of this forum, let's just go to the chart.
I don't think the chart supports your argument.
More...

If you like charts, put up a chart of real interest rates (10 or 30 year) and overlay the gold price. Except for the runup in the years following 2005 (when GLD was launched, and subsequent portfolio inflows led to a multi-year bull market) it's clear that large, sustained gold-price moves in either direction are driven by changes in real rates.

To get a meaningful bull market here, you're going to need either plunging real rates (just the opposite is happening at the moment as the Fed is rapidly tightening), or some other kind of unforeseen macro shock which breaks the correlation and causes a huge wave of inflows into gold. I guess that's possible, but I sure wouldn't bet on it for a tactical trade.
 
Specterx said:
If you like charts, put up a chart of real interest rates (10 or 30 year) and overlay the gold price. Except for the runup in the years following 2005 (when GLD was launched, and subsequent portfolio inflows led to a multi-year bull market) it's clear that large, sustained gold-price moves in either direction are driven by changes in real rates.

To get a meaningful bull market here, you're going to need either plunging real rates (just the opposite is happening at the moment as the Fed is rapidly tightening), or some other kind of unforeseen macro shock which breaks the correlation and causes a huge wave of inflows into gold. I guess that's possible, but I sure wouldn't bet on it for a tactical trade.
More...

OK
1) i like your thought process, but
2) the Global players can demand whatever they want.

PMs are a small part of my portfolio, so I am not depending on this for a good yearly P+L.
But I think the U.S. (and NATO-types) facing off against Vlad Putin is a huge dose of "fury and bravado" and a very very small dose of clear thinking.
So, we need what Vlad has (fertilizers) and Europe needs energy, maybe AGs as well,
But Vlad can't accept $Dollars (the U.S. barred him from SWIFT).
So, Vlad is going to be forced to accept GOLD or some other commodity for Russia exports.
And once that happens, few other countries will be accepting $$Dollars either.
Which is exactly what U.S. policymakers didn't want.
Because frankly, most countries don't have much Gold, esp. the U.S.
So, this is the cutting edge of our foreign policy, and we are paying top dollar to get these policies.
Actually I think Vlad (and the tall guy from China) just ran the table on us.
 
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