The Bond is at present above today’s Neutral Zone, whilst below same are both Gold and the Spoo; BEGOS Markets’ volatility is moderate; the non-BEGOS Yen has already traced 126% of its EDTR, (for that of the actual BEGOS components see Market Ranges); the Yen has worked all the way back up to close the gap following its fallout from last Sunday’s parliamentary election. By Market Trends, the 21-day linregs are positive for Gold, Silver and the Spoo, but are negative for the Bond, Euro, Swiss Franc, Oil and Copper: as noted yesterday however, Copper’s “Baby Blues” have moved above their key -80% axis, typically meaning a near-term up move for price. ‘Tis a busy day for the Econ Baro, incoming metric’s including October’s Chi PMI, September’s Personal Income/Spending and “Fed-favoured” Core PCE Prices as an inflation gauge, plus Q3’s Employment Cost Index.
Mark
30 October 2024 – 08:21 Central Euro Time
At present we’ve Gold as the sole BEGOS Market above its Neutral Zone for today; the balance of the bunch are within same, and volatility is light. The yellow metal today has traded above 2800 (2802) for a fresh All-Time High. And leading all 405 of our Market Rhythms for pure swing consistency on a 10-test basis is Gold by its 4hr Moneyflow. On a 24-test basis, the leader is still the non-BEGOS Yen’s daily Price Oscillator, followed by Copper’s 15mn Moneyflow: the red metal’s “Baby Blues” (see Market Trends) yesterday confirmed having moved above their -80% axis, suggestive of a near-term run from here in the 4.30s up into the 4.50s. For the Econ Baro we’ve October’s ADP Employment data, September’s Pending Home Sales, and the first peek at GDP for Q3.
29 October 2024 – 08:00 Central Euro Time
Safe havens are getting the bid early on as we’ve the Bond, Gold and Silver all at present above today’s Neutral Zones; below same are Copper and Oil, and BEGOS Markets’ volatility is pushing toward moderate. Our best current correlation amongst the five primary BEGOS components is negative between Oil and the Spoo: the best Market Rhythms therein (both on a 10-test basis for pure swing consistency) for Oil is its 8hr Moneyflow and for the Spoo its 12hr MACD. Gold’s All-Time High is 2773 (23 October) with present price 2767 and an EDTR (see Market Ranges) of 30 points; still, by Market Values, Gold near-term remains “high”, now (in real time)+123 points above its smooth valuation line. For the Econ Baro we await October’s Consumer Confidence.
28 October 2024 – 08:10 Central Euro Time
We begin the busy week finding at present the Bond, Swiss Franc, Gold and Oil below their respective Neutral Zones for today; above same is the Spoo, and volatility is moderate-to-robust, the Bond already having traced 110% of its EDTR (see Market Ranges). The Gold Update lauds the yellow metal’s near-perfect performance this year, indeed having come within $1,000/oz. of its Dollar debasement valuation for the first time in ten years; still, we warily point to Gold’s near-term overvaluation per price’s movement relative to the other primary BEGOS Markets: in real-time, Gold is +117 points above that smooth valuation line (see Market Values). Nothing is due today for the Econ Baro ahead of a slew of 17 incoming metrics as the week unfolds. And at the halfway point of Q3 Earnings Season for the S&P 500 constituents, ’tis running about average per prior year-over-year quarterly improvements (68% thus far doing better and thus 32% not so).
The Gold Update: No. 780 – (26 October 2024) – “Gold Taps a Ten-Year Frontier”
The Gold Update by Mark Mead Baillie — 780th Edition — Monte-Carlo — 26 October 2024 (published each Saturday) — www.deMeadville.com
“Gold Taps a Ten-Year Frontier”
‘Tis taken ten years, but what just happened?
“Well, mmb, I’m gonna take a stab at this: for the 207 trading days so far this year, Gold has made a record high for 37 of ’em.”
A spot-on and well sussed-out observance there, Squire, but that’s not our highlight. Rather, the answer is in the above Gold Scoreboard’s math. Ready? Here we go:
- As shown, Gold settled out this past week yesterday (Friday) at $2,761/oz.
- Gold’s valuation (even given its own supply increase) relative to debased M2 is now $3,736/oz.
- The difference? $2,761 – $3,736 = -$975.
Thus for the first time in ten years (since the week ending 25 July 2014), Gold at week’s end is now above the -$1,000 undervaluation frontier relative to where it ought be given Dollar debasement. ‘Tis all there to below behold across the past 45 years, the rightmost pip having just eclipsed that red frontier:
Gold’s firm rally so far this year (correctly incorporating Squire’s 37 days of All-Time Highs) has remained magnificently intact, indeed having well-exceeded our “conservative” (as ’twas couched at New Year) forecast high in 2024 of 2375.
So per the above graphic, having surpassed (at least for the moment) the -$1,000/oz. undervaluation frontier, does this mean Gold finally is en route in racing up to where it “ought be”, (i.e. at the horizontal green line)?
To be sure, Gold (cue the yucky woke word) “awareness” is certainly increasing at least per the pages of the FinMedia. But is that translating into enough substantive buying to power Gold to its proper 3700+ perch? A good many years ago on a Merrill Lynch “call to clients” in which a piece of our work was featured, the host opined that only some 5.0% of managed portfolios carried Gold exposure. Then in more recent years, (Al Gore’s invention of the internet having since extrapolatively expanded), such number has been bandied down to as low as 0.5%.
We’ve thus decided to go with something assumed to be in the modern-day know: “AI“. So in specifically querying such “Assembled Inaccuracy”, the salient part of its responding was: “…75 percent of private client discretionary investment managers have under 2.5 percent gold exposure…”, followed by the available sources “AI” scrounged, and in turn, its disclaimers.
‘Course for this to have any meaningful relevancy, we need know the status of the other 25%. Otherwise ’tis all (per The Stones from ’65): 
“…About some useless information, Supposed to fire my imagination, I can’t get no … Satisfaction…” let alone accuracy as to managed Gold ownership.
The bottom line being: as long as stocks remain “the only thing”, Gold shan’t immediately the 3700+ bell ring.
Still, one can’t argue with the golden brilliance of price’s weekly bars from a year ago-to-date, the current blue-dotted parabolic Long trend having completed its 15th week with still plenty of room (154 points) between present price (2761) and the “flip to Short” level (2607, itself now rising at a rate of some +30 points per week). Either way, wherein understanding range is critical to cash management, Gold’s expected weekly trading range is now 73 points; the daily range (see the website’s Market Ranges and/or Gold page) is currently 31 points. So notwithstanding the near-term overvaluation note therein, our Gold graphic here points as positively as one could prefer:
As to the StateSide economy, our Economic Barometer points to it of late as trendless, the International Monetary Fund with a more optimistic view than that of the Fed per the latter’s Tan Tome for October released this past Wednesday. And specific to the Baro, ’twas a very light “50/50” week with just six incoming metrics of which three bettered their prior period. Amongst the batch was the Conference Board’s “Leading Indicators” (to which we refer as “lagging” because the Baro leads them) for September which were negative for the seventh consecutive month, and further, for the 28th negative month in the last 30. (Recall as well from the Econ Baro a week ago the “WaPo” OpEd quote about this being “one of the best economic years of many Americans’ lifetimes” … but suddenly they’ve decided not to endorse “re-election” of the “current” Administration … That’s gonna bruise). Here’s the Baro:
And stark in the Baro’s upper-right corner we’ve the “live” price/earnings ratio of 43.6x for the S&P 500. Obviously toward approaching the midpoint of Q3 Earnings Season, there’s not been significant enough improvement to bring that ratio down. In fact for those of you scoring at home, of the 503 S&P constituents, 161 have reported, of which 109 bettered their bottom lines from a year ago. That is a 68% bettering pace which is “average” vis-à-vis recent years, even excluding 2020’s COVID profits-dearth. One wonders how might ol’ Jerome B. Cohen (“in bull markets the average level would be about 15 to 18 times earnings”) might react to this data: only 160 (32%) of the S&P 500 entities have P/Es less than 20, with 52 companies either exceeding 100x or without earnings at all. (‘Tis again why — instead of the stock market — we prefer the safe, serene, security of the futures markets). And if that’s too complex for you WestPalmBeachers down there, then we simply ask: “Got Gold?”
Here’s Gold via our two-panel display, featuring on the left price’s daily bars from three months ago-to-date, whilst on the right is the 10-day Market Profile such that you can see which prices having been carrying the most trading volume. For both panels, as herein inferred a week ago, ’tis hard to improve upon perfection. Still, as aforementioned, we’re wary of near-term price reversion to its smooth valuation mean of presently 2644:
With the same drill for Silver, we might as well photocopy that for the yellow metal and merely change the colour to this for the white metal. ‘Course, the important inference here is Sister Silver having been adorned in her precious metal pinstripes as opposed to her industrial metal jacket, (the latter being her preference when acting as the bad girl with Cousin Copper). But that clearly is not the current case, the red metal’s own “Baby Blues” of trend consistency being comprehensively in the dumpster (per the website’s Market Trends and/or Copper page). So stay sweet, Sister Silver!
Then there’s next week, for which the load of incoming economic metrics is massive(!). 17 reports come due for the Econ Baro, including the “Fed-Favoured” inflation gauge of Core Personal Consumption Expenditures Prices for September. And the “consensus” expection is for it to have risen … we even read within the mist of the past week’s FinMedia the query (paraphrased) “What if the Fed instead raises rates?” come its Open Market Committee’s post-election meeting (06-07 November). We’ll be updating our inflation table for next week’s piece.
Meanwhile, creativity abounds in the headlines. Try this CNBS (truth be told) from yesterday: “In this time of uncertainty, markets seem to rely on logic.” Folks, you cannot make this stuff up, (except, they’re doing their best to so do). If markets were relying on logic, today’s S&P 500 (5808) given its ghastly P/E would be half that (2904), whilst Gold (2761) would be ’round its Scoreboard valuation (3736). True, the markets are never wrong, but misvalued opportunities abound! Especially for the precious metals all ’round!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
25 October 2024 – 08:03 Central Euro Time
At present, we’ve the Bond above its Neutral Zone for today, whilst below same are both Gold and Copper; BEGOS Markets’ volatility is again light. With the exception of Silver, EDTRs (see Market Ranges) have been falling for recent weeks across the BEGOS’ board; for example, specific to the Spoo, its EDTR for 08 August was at a 124-point peak: for today’s session ’tis set for 57 points. By its Market Profile, the Spoo’s most dominantly-traded handles across the past fortnight are right here at 5849, notable overhead resistors being 5863, 5886, 5897 and 5909; and in real-time, the Spoo by Market Values is +99 point above its smooth valuation line. The Econ Baro concludes its quiet week with metrics including September’s Durable Orders.
24 October 2024 – 08:01 Central Euro Time
Following a day wherein all eight BEGOS Markets finished in the red, today they all are at present in the black; currently above today’s Neutral Zones are the Bond, the Metals Triumvirate, and Oil; session volatility is light. Going ’round the Market Values horn (in real-time) for the five primary BEGOS components: the Bond vis-à-vis its smooth valuation line shows as nearly -7 points “low”, the Euro as -0.035 points “low”, Gold as +101 points “high”, Oil as fairly in line (as has been its case for almost two weeks), and the Spoo as +104 points “high” even accounting for yesterday’s selling; too, the S&P 500 itself (-0.9% yesterday) remains “textbook overbought” through a 10th day. Incoming metrics due for the Econ Baro include September’s New Home Sales.
23 October 2024 – 08:04 Central Euro Time
We’ve both the Bond and Swiss Franc at present below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is pushing toward moderate. Gold for now a fifth-consecutive session has recorded an All-Time High, this latest thus far today being 2767; too, Silver has achieved the 35 handle for the first time since 05 October 2012; the Gold/Silver ratio is currently 79.3x, meaning Silver remains historically quite cheap relative to Gold, itself — despite new highs — still very cheap given Dollar debasement. As for Market Rhythms for pure swing consistency, on a 10-test basis for the best we’ve the non-BEGOS Yen’s 2hr Parabolics and for the Bond both its 12hr Parabolics and 2hr Moneyflow; on the 24-test basis, the non-BEGOS Yen’s daily Price Oscillator still tops the list. The Econ Baro looks to September’s Existing Home Sales; the later in the session comes the Fed’s Tan Tome for October.
22 October 2024 – 08:14 Central Euro Time
The Bond continues to work lower as yields rise, price at present below today’s Neutral Zone as is the Spoo; above same are both Gold and Silver, and BEGOS Markets’ volatility again is light. The Bond’s “Baby Blues” (see Market Trends) have not yet eclipsed above their -80% axis as the selling continues. Looking at correlations amongst the five primary BEGOS components, the best is currently negative between the Bond and Oil. The S&P 500 completed its eighth consecutive session as “textbook overbought”; the Index’s MoneyFlow, whilst coming back into line near-term, still on a quarterly basis shows the S&P as some +250 points “too high”; the futs-adj’d “live” P/E is now 44.0x, thus no substantive improvement in bottom lines relative to price as Q3 Earnings Season continues, now into its third week of six. The yield on the S&P is 1.255% vs. 4.518% annualized on risk-free U.S. three-month dough.
21 October 2024 – 08:21 Central Euro Time
At present we’ve the Euro below its Neutral Zone for today, whilst above same are Silver and Copper; BEGOS Markets’ volatility is light. Gold thus far has made a marginal All-Time High at 2748; The Gold Update cites price’s having risen even as — unusually — have the levels of the Dollar Index, yields, S&P 500, as well as the equivalent rate of the FedFundsFutures; regardless, we remain wary of Gold (by Market Values) being +110 points (in real-time) above its smooth valuation to which price inevitably reverts. ‘Tis a fairly light week for incoming Econ Baro metrics, today bringing September’s Leading (i.e. “lagging”) Indicators. Q3 Earnings Season enters its third week of six scheduled: thus far for the S&P 500: 82% have beaten estimates, but only 64% have improved over Q3 a year ago.
The Gold Update: No. 779 – (19 October 2024) – “Gold Up; Dollar Up; Yields Up — What’s UP?”
The Gold Update by Mark Mead Baillie — 779th Edition — Monte-Carlo — 19 October 2024 (published each Saturday) — www.deMeadville.com
“Gold Up; Dollar Up; Yields Up — What’s UP?”
‘Tis simple really. Against all conventional wisdom (to the extent that any wisdom whatsoever remains as The Investing Age of Stoopid rolls merrily along), Gold is merely yet again proving — as on occasion is its wont — that it plays no currency favourites.
Too, ’tis great having returned following our travels amongst the wilds of easternmost England, to now be ensconced in the quiet confines of our otherwise palatial estate. However, it does beg the pro-Gold question: ought we perhaps travel more often? For in the wake of last week’s brief “in-motion” missive “Gold in 60 Seconds (III)”, the yellow metal went on to record a series of fresh All-Time Highs, reaching yesterday (Friday) up to 2738 before settling at 2736. And note the suggestion of Gold en route to closing the gap from its Dollar debasement value in the above Scoreboard’s right-hand panel. Just an observance…
“But it’s not about you, mmb, so may we stick to the issues?“
Of course, Squire, duly noting our having been out-of-pocket without your skillful support last Saturday was a challenge.
But on with the show, beginning with the following two-panel graphic depicting several series of what are more usually Gold-negatively-correlated entities across the past 21 trading days. On the left we’ve Gold from 20 September through 19 October along with the independently-scaled Dollar Index: and yes, Virginia, as we’ve seen in the past, both Gold and the Dollar have been on the rise. On the right for the same one-month stint we’ve the annualized yield of the U.S. 30-year Treasury Bond and the FedFundsFutures equivalent rate, also both on the rise. Naturally, axiomatic fanatics argue this can’t occur, but (in again cuing Tag Team from ’93) “Whoomp! (There It Is)”:
‘Course, with Gold on the rise and also the Dollar and also yields, ’tis a no-brainer that equities must be in “Dire Straits” … however “Why Worry”(’85): for the S&P 500 set another record high (5878) this past Thursday, the “live” price/earnings ratio settling the week at 43.7x, +72% above its inception a dozen years ago. But as we’ve been stating time and again, earnings no long matter, (see the S&P 500 from 24 March 2000 through 10 October 2002).
“But obviously, mmb, the market always goes all the way back up and as you say, ‘beyond’, eh?“
Squire, throughout the 67-year history of the S&P 500, that has ultimately been the case. But in this current age of the “low-information, short-attention span, instant gratification crowd“, patience would be vapid in weathering a 13-year, double-dip S&P 500 trough for a price gain of just 2% as we witnessed following 24 March 2000 until 10 April 2013. It happens.
But let’s go to what truly of late has been “The Happening”(The Supremes, ’67): by yesterday’s 2736 settle, Gold year-to-date is now +32%, second only to the BEGOS Market component Silver, she now +41%! Indeed, the white metal’s long-overdue “catching up” is in play to some extent, the Gold/Silver ratio — as below noted at the foot of Gold’s weekly bars graphic — having been reduced this past week to now 80.7x, its lowest reading since 16 July, (but still well above the century-to-date average of 68.5x). Thus with Gold remaining very cheap relative to currency debasement — and Silver still a bargain relative to Gold — here is the yellow metal from one year ago-to-date:
With a justifiable nod toward Gold jubilation and its still being ever so cheap from the long-term currency debasement perspective, as has been our prudent point of late: Gold near-term remains “high” relative to its BEGOS valuation. So again we next display Gold’s daily closes from one year ago-to-date astride its smooth valuation line — itself rightly rising — but suggesting price “ought be” (per the lower panel oscillator) some -111 points lower at 2625. To be sure, ’tis a one-off valuation for Gold given its price movement relative to those of the other four primary BEGOS Markets; but obviously price and valuation inevitably meet … just in case you’re scoring at home:
Now this next graphic comes with a loss of words to substantively describe, if for no other reason than ’tis perfection for the daily bars across the past three months-to-date featuring Gold on the left and Silver on the right. As noted, the yellow metal is at a record closing high of 2736, whilst the white metal at 33.93 is at its best daily settle since 29 November 2012. Nuff said:
And thus segueing to the precious metals’ 10-day Market Profiles, it stands to reason that we find both Gold (below left) and Silver (below right) essentially at the top of their respective stacks, notable underlying volume-supportive prices as labeled:
Towards this week’s wrap, with The Washington Post opining that the 2024 StateSide economy may be amongst the best of our lives, we indeed turn to the Economic Barometer. Of the 14 metrics taken in by the Econ Baro this past week, six improved period-over-period … meaning that eight did not improve. The week’s notable winner was substantive growth in the pace of Retail Sales for September. But amongst the stinkers came shrinkage in September’s Industrial Production from August’s +0.3% to -0.3% and a like erosion in the New York State Empire Index from +11.5 in September to -11.9 for October. Still, “WaPo” says ’tis all on go. Do you think so? Here’s the Baro:
So “What’s UP?” indeed! With Gold and the Dollar and Yields and even the stock market all on the rise, might we be facing a Fed surprise? After all, as aforeshown, the rate equivalent of FedFundsFutures also is up of late. The Federal Reserve’s Open Market Committee issues its next Policy Statement on 07 November … which is a Thursday! Why not on the usual Wednesday? One guess may be that “they” (whoever “they” are out there) still shan’t have “declared” the winner of the Tuesday, 05 November Presidential Election. “Well, there’s millions of mail-in ballots still to count, ya know…” And of course ’tis The President who nominates the FedHead. So might it behoove one to see who’s won before the next Fed policy is spun, lest it all come undone?
For in speaking of spin, hat-tip “Political Calculations” with this gem:
And keep your hat tipped to Gold as THE gem!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
18 October 2024 – 08:23 Central Euro Time
The three elements of our Metals Triumvirate are all at present above today’s Neutral Zones, whilst below same is the Bond; BEGOS Markets’ volatility is light-to-moderate. Per Wednesday’s comment, the Bond’s “Baby Blues” (see Market Trends) have yet to curl up above their -80% axis: thus at bay remains our notion for a move up into the 124s, (price currently 119^28); moreover, the Bond’s 12hr Parabolics flipped to Short effective today’s open, that study leading (for pure swing consistency) the 405 studies tested nightly for our Market Rhythms. Gold has made All-Time Highs both yesterday and thus far today up to 2729 even as price vis-à-vis its smooth Market Values line shows (in real-time) as +99 points “high”; more of course in tomorrow’s 779th consecutive Saturday edition of The Gold Update. The Econ Baro concludes its week with September’s Housing Starts/Permits.
17 October 2024 – 08:18 Central Euro Time
The Bond, Swiss Franc, Silver and Copper all are at present below their respective Neutral Zones for today; Gold is above same, and session volatility is light. Going ’round the Market Values horn for the five primary BEGOS Markets (in real-time): the Bond is better than -5 points “low” vis-à-vis its smooth valuation line, the Euro -0.035 points “low”, Gold +73 points “high”, Oil basically in line, and the Spoo +169 points “high”. Gold at 2697 is by its EDTR (see Market Ranges) of 31 points well within range of an All-Time High (2709). And ’tis a busy day for the Econ Baro, incoming metrics including October’s Philly Fed and NAHB Housing Indices, September’s Retail Sales and IndProd/CapUtil, plus August’s Business Inventories.
16 October 2024 – 08:16 Central Euro Time
At present, all eight BEGOS Markets are within their respective Neutral Zones for today, and volatility is quite light. By Market Rhythms, the best of the bunch for pure swing consistency on a 10-test basis are the Bond’s 12hr Parabolics and the Swiss Franc’s 1hr Moneyflow, whilst on a 24-test basis we’ve the non-BEGOS Yen’s daily Price Oscillator, and the 30mn Moneyflow on both the Swiss Franc and Spoo. At Market Trends, the Bond’s “Baby Blues” — although still below their -80% axis — have begun curling upward: upon confirmation of eclipsing -80% we look for price to move up into the 124s. Cac volume for Oil has begun rolling from November into December. The Econ Baro awaits September’s Ex/Im Prices. And with Q3 Earnings Season still quite young, of the 21 S&P 500 constituents having thus far reported, 10 (48%) did not improve their bottom lines from Q3 a year ago.
15 October 2024 – 08:19 Central Euro Time
As was the case ’round this time yesterday, again both Copper and Oil are at present below today’s Neutral Zones, as too is the Euro; the Bond is above same, and BEGOS Markets’ volatility is pushing toward moderate. Looking at correlations amongst the five primary BEGOS components, the best currently is positive between the Bond and Euro. The Dollar Index is at a two-month high (103.120). The S&P 500 yesterday achieved another record high at 5871, the futs-adj’d “live” P/E now 44.2x. FedFundsFutures are indictive of the FOMC going with a -25bp rate cut come 07 November. The Econ Baro awaits October’s NY State Empire Index.
14 October 2024 – 08:21 Central Euro Time
We’ve both Copper and Oil at present below today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is mostly light. The Gold Update — a brief edition given our having been in motion on the weekend — reiterates our near-term wariness for some weakness in price, whilst emphasizing our long-term bullish view; this morning, Gold’s “Baby Blues” (see Market Trends) are continuing their descent as is the case for all the BEGOS components save for Oil and the Spoo. By Market Profiles, Gold’s most notable trading support by volume is 2671-2166, whilst Silver sees overhead resistance from 31.75 to 32.00. Nothing is due today for the Econ Baro ahead of some 13-14 incoming metrics as the week unfolds; too, the pace increases for Q3 Earnings Season reports
The Gold Update: No. 778 – (12 October 2024) – “Gold in 60 Seconds (III)”
The Gold Update by Mark Mead Baillie — 778th Edition — Easternmost England — 12 October 2024 (published each Saturday) — www.deMeadville.com
“Gold in 60 Seconds (III)”
Our title’s Roman “III” is indicative of having used “Gold in 60 Seconds” now for the third time across these esteemed Saturday missives’ 15 years (previously on both 16 April ’16 and 08 March ’14). Again, this time ’tis so apropos. For as herein previewed a week ago…
Greetings from a remote, undisclosed, rural location in easternmost England, an area sufficiently primitive that in lieu of digital internet connectivity we are reliant upon the dear old analog telegraph to produce this week’s piece. And with time to write this week at an extreme premium, let’s get salient straightaway with just the key graphics (to the extent they can visually be reproduced via the telegraph).
For all the hype over the past StateSide “Inflation Week” — which at the retail level (CPI) was more robust than consensus anticipation, yet at the wholesale level (PPI) relatively benign — Gold netted a gain for the week of (deep breath … ready?) exactly one point in settling yesterday (Friday) at precisely 2674.2 vs. the prior Friday’s 2673.2. Here are Gold’s weekly bars from one year ago-to-date, the blue-dotted parabolic Long trend now 13 weeks in duration, even as price has made a “lower high” now twice in succession:
Per recent editions of The Gold Update — as well of late in the daily Prescient Commentary — we’ve been alluding to Gold’s being “high” relative to its smooth valuation line to which price inevitably reverts as we next see from this time a year ago to now. The smooth line reflects a near-term valuation for Gold based on its movement relative to those of the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500). The graphic’s lower panel oscillator (price less valuation) tells the tale that with price recently stalling, ’tis becoming more in line with valuation, the good news there being (as herein highlighted a week ago) the BEGOS valuation for Gold is rising:
Again, that’s merely a near-term view, for long-term by the opening Gold Scoreboard (which may appear graphically-challenged per said analog telegraph transmission), the yellow metal today at 2674 is undervalued by some -1069 points per its 3743 Dollar debasement value. Dip Gold may near-term do, but long-term do not Gold eschew.
Meanwhile, the relentless S&P 500 made record highs both this past Wednesday and Friday, en route to settling the week at 5815. ‘Course, its “live” P/E ratio remains staggeringly high at 43.6x, some +72% above its inception a dozen years ago. But we reprise: the S&P’s saving grace is earnings no longer having a role in “valuing” stocks. “Les jeux sont fait; rien ne va plus.” And as to near-term technicals: through 197 trading days this year-to-date, the S&P 500 has been “textbook overbought” for 122 of them, including now. (A word to the wise is sufficient).
In concert with the the one-way stock market is the Economic Barometer, albeit hardly are they in tune with one another as shown here year-over-year. One cannot beat the modern day reality of a weakening economy being of benefit to the S&P 500. As ’tis said “If it’s so easy, then everybody would do it.” And indeed, they are. But be it the “Look Ma, No Earnings!” crash — or worse — the “Look Ma, No Money!” crash, at some point, such unsustainability shall revert to the mean, as relative to earnings the S&P 500 has historically done since its creation 67 years ago in March of 1957.
Of this week’s total 60-seconds read, we’ve but 10 seconds left to offer. Thus swiftly let’s bring up the two-panel display of Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right: Therein, most key are the falling “Baby Blues” of trend consistency. As penned in last Tuesday’s Prescient Commentary: “…we’d look for lower precious metals prices near-term, perhaps for Silver right ’round 31 and for Gold 2620-2570…”:
So there briefly ’tis for this week as we simply must scoot. 14 incoming metrics are due next week for the Econ Baro, plus Q3 Earnings Season starts to become more voluminous; (but be they better or worse, as noted, earnings today are simply passé).
Thus from the undisclosed wilds of easternmost England, we bid you “Good Day!”, and that many-a-good Gold trade come your way!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
11 October 2024 – 08:18 Central Euro Time
Similar to yesterday at this hour, BEGOS Markets’ volatility is very light ahead of StateSide wholesale inflation for September. Gold is the sole component outside (above) its Neutral Zone for today; price is recovering much of its intra-week loss, although in real-time ’tis +54 points above its smooth valuation line (see Market Values); too, as is the case with Silver, the Euro Currencies, the Bond and Copper, Gold’s “Baby Blues” of trend consistency are clearly in descent (see Market Trends) in concert with the rebounding Dollar these past two weeks. As noted in the still current edition (No. 777) of The Gold Update, tomorrow’s edition (No. 778) is likely to be quite brief as we shall be “in motion” from remote, easternmost England; regardless, we shall highlight the key salient state of Gold. As noted today for the Econ Baro, incoming metrics include September’s PPI and purportedly the month’s Treasury Budget (which yesterday was not released), plus October’s UofM Sentiment Survey.
10 October 2024 – 08:20 Central Euro Time
As we saw yesterday ’round this time, the eight BEGOS Markets are presently all within today’s Neutral Zones, with volatility very light (the average Market Ranges’ EDTR thus far just 23%) ahead of retail inflation for September. Gold from Monday’s open to Wednesday’s close is sporting its weakest down week by points since that ending 24 May, (obviously with two trading days still in the balance); but ’tis indicative of the near-term overvaluation unwinding, price in real-time now only +31 points above its smooth valuation line by Market Values. The S&P 500 set a record high yesterday at 5797: the “live” futs-adj’d P/E is now 43.8x which is 72% above its inception back in 2013, underscoring the continuously extreme overbought condition of equities, especially given the far better returns in the StateSide debt market. Included with September’s CPI, the Econ Baro also awaits metrics that include the month’s Treasury Budget.
09 October 2024 – 08:16 Central Euro Time
We’ve all eight BEGOS Markets at present within their respective Neutral Zones for today, and session volatility is quite light, indeed just half of what ’twas at this point yesterday. Gold’s “Baby Blues” (see Market Trends) have followed those of Silver by also having confirmed settling below the key +80% axis; and indeed, Gold has been coming off thus far this week, albeit price is still (in real-time) +41 points above its smooth valuation line (see Market Values). Leading our Market Rhythms on a 10-test basis is the Bond’s 12hr Parabolics, whilst on a 24-test basis ’tis the non-BEGOS Yen’s daily Price Oscillator. August’s Wholesale Inventories come due for the Econ Baro; then later in the session is the issuing of the FOMC’s Minutes from the 17-18 September meeting.
08 October 2024 – 08:15 Central Euro Time
At present we’ve the Bond above today’s Neutral Zone, whilst below same are both Copper and Oil; session volatility on balance for the BEGOS Markets is mostly moderate, albeit Copper and Oil already have traded beyond 100% of their EDTRs (see Market Ranges). As noted yesterday, Silver’s “Baby Blues” (see Market Trends) have confirmed settling below their key +80% axis and those for Gold in real-time are provisionally below same: thus we’d look for lower precious metals prices near-term, perhaps for Silver right ’round 31 and for Gold 2620-2570; the latter by Market Values is in real-time +79 points above its smooth valuation line. The futs-adj’d “live” P/E of the S&P is 41.9x and the yield 1.302%; that for the risk-free 3mo T-Bill is 4.525%. The Econ Baro awaits August’s Trade Deficit.
07 October 2024 – 08:17 Central Euro Time
As has been the case in recent trading sessions, we again see ’round this time that both precious metals are outside of today’s Neutral Zones, in instance being below them, whilst the balance of the BEGOS Markets are within same; volatility is light. The Gold Update extols Silver’s sterling past week even as Gold stood idly by; however, again is emphasized that Gold vis-à-vis its smooth valuation line (see Market Values) has notably been “high”, at present +85 points by that metric; mind too Gold’s “Baby Blues” (see Market Trends) which in are curling lower, and indeed those for Silver have (in real-time) moved below their key +80% axis, indicative of still lower prices near-term. Late in the session for the Econ Baro comes August’s Consumer Credit. And Earnings Season for Q3 commences.
The Gold Update: No. 777 – (05 October 2024) – “Gold Stands Idly By as Silver Nears a 12-Year High”
The Gold Update by Mark Mead Baillie — 777th Edition — Monte-Carlo — 05 October 2024 (published each Saturday) — www.deMeadville.com
“Gold Stands Idly By as Silver Nears a 12-Year High”
Welcome to edition “Triple-Seven” of The Gold Update, wherein we find the yellow metal having settled yesterday (Friday) at 2673, a -0.3% loss (-8 points) for the week.
Silver however for the same stint settled at 32.45, a +1.7% weekly gain (+0.53 points), achieving en route a nearly 12-year high of 33.23, such level having not traded since 13 December 2012. Not even cajoling Cousin Copper could keep sweet Sister Silver down. ‘Twas a beautiful thing as we here see per the cumulative percentage tracks of the BEGOS Markets’ “Metals Triumvirate” by the hour across this past week:
Silver’s sterling week (whilst Gold was essentially asleep) was enough to bring the (albeit still excessive) Gold/Silver ratio down to 82.4x, its lowest closing reading since 23 July. Moreover, year-to-date expanded Silver’s leading position of the BEGOS Markets, the white metal now with a gain of +35.0%, (followed by Gold at +29.0% and then the S&P 500 +20.6% to round out the podium).
Specific to Gold and the murderous Mid-East mayhem, we were yet again reminded that the yellow metal’s swift upside reaction to geo-political barbarism was at best short-lived, price from late Monday into Tuesday being boosted from 2646 to 2695 only to then see it erode away into week’s end. We’ve written rather extensively on Gold’s “momentary” spikes over geo-political jitters, price then regularly receding.
That in turn reminds us of Gold’s most foundational element of valuation: ’tis not fearful events nor extravagant wedding seasons, et alia. Rather ’tis the debasement of currency that gives lasting value to Gold. And as our opening Gold Scoreboard shows, by Dollar debasement (even as adjusted to the creeping increase in the supply of Gold itself), the yellow metal today “ought be” fetching $3,741/oz. So yes, for you WestPalmBeachers down there, priced today at $2,673/oz Gold remains cheap; and Silver still super cheap given the century-to-date average Gold/Silver ratio is but 68.5x.
Still in light of Silver’s robust week, Gold stand by rather idly as we here see by the weekly bars from one year ago-to-date. the blue-dotted parabolic Long trend nonetheless continuing to ascend:
Regardless, we’ve this ongoing reminder from the “Nothing Moves in a Straight Line Dept.” that Gold near-term is overvalued vis-à-vis its smooth valuation line (which is different from the broad-term Scoreboard value). Here, the smooth line sets a value for Gold based on its movement relative to those of the five primary BEGOS Markets, namely the Bond, Euro, Gold, Oil and S&P 500. Thus from the website comes that updated view, by which one ought anticipate price reverting to the smooth line which fortunately itself is on the rise and therefore, in part, supportive of Gold’s recent rally:
“Your chart says ‘excessive’, but what happened to your ‘Stock Market Warning’ mmb?“
To be sure, Squire, we issued said “Warning” a week ago. Instead, the S&P 500 sported a +0.2% gain for the week. ‘Tis the way ’tis as The Investing Age of Stoopid blissfully rolls along. The mighty Index today stands at 5751, a mere -16 points below its 5767 all-time high, with FinMedia reports for 6000. That is just another +4.3% up from here. (Note for those of you scoring at home: at 6000, the “live” P/E of the S&P would be 44.4x; ‘course, earnings in the modern investing era have becoming meaningless, so ’tis all good, even as the “non-event” Q3 Earnings Season commences on Monday).
Indeed speaking of “good”, as we work toward the Economic Barometer, how about that StateSide jobs report for September, courtesy of the Department of Labor Statistics? The net “creation” of 254,000 Non-Farm Payrolls was hailed amongst the FinMedia as (ready?) “Blockbuster” and even more superlatively as a “Supernova”. Why, we ourselves were so excited over this apparently history-breaking news that we decided (as you know is our wont) to do the math. And here’s what we found:
- Century-to-date (i.e. from January 2001), Friday’s monthly report was No. 285, for which such amazing job creation ranked as (ready?) 50th-best. One strains to recall what adjectives were used for the prior 49 reports that were even better.
But yes, we get it: ’tis election season and as the economy’s state ultimately redounds to the Executive Branch, “Labor” need ensure its survey results generate energized levels of electoral enthusiasm. Cue The Cars from ’84: “Uh oh, it’s magic” And as an aside, specific to September’s private sector employment, “Labor” recorded a +78% month-over-month improvement whereas ADP’s report was only half that at +39% … (just one of those things that makes you go “hmmmmm…”)
Either way, we’re told the economy is humming right along, some indeed invoking the “Goldilocks” descriptor. Really, does it get any better than the following?
‘Course in the midst of all this economic euphoria come the bits from the “You’re Not Supposed to Say That Dept.”, which from this past week include ongoing net contraction for September in both the Chicago Purchasing Managers’ and Institute for Supply Management’s Manufacturing Indices, a slowing in Hourly Earnings and the number worked thereto, a pickup in the prior week’s Initial Jobless Claims, and actual shrinkage in August’s Factory Orders. But “Mum’s the word, Mum.” Right.
As aforeshown, getting it right this past week was Silver, such that we’ll lead the two-panel displays this time ’round with the white metal. Below on the left are her daily bars from three months ago-to-date; but be wary of her “Baby Blues” of day-to-day trend consistency, as upon their breaching below the +80% axis, one ought look to lower price levels. Then on the right we’ve Silver’s 10-day Market Profile with the most dominantly-traded prices by volume tightly nested as labeled:
Too, we’ve the like drill for Gold. Note on the left the “Baby Blues” similarly curling to the downside, whilst on the right the three labeled dominant prices are a bit more spread out than are those for Silver:
We shut down for this week with a heads-up for next week. Our 778th consecutive Saturday edition of The Gold Update is to be composed from a remote, undisclosed, rural location in easternmost England, an area sufficiently primitive that in lieu of digital internet connectivity we must be reliant upon analog telegraph. Indeed, next week’s piece — to literally go “out on the wire” (as dear old Grandpa used to say) from one telephone pole to the next and right ’round the world — shall be quite brief and perhaps even graphics-less. But having never missed penning a Saturday missive across these 15 years, the show must go on, just as does Gold being true money these 5,000 years!
So whilst Tut himself may be out on the town, again we’ll be hunkered well down close to the ground our next missive ’round!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
04 October 2024 – 08:21 Central Euro Time
At present we’ve the Swiss Franc and Gold above today’s Neutral Zones; none of the other BEGOS Markets are outside of same, and volatility is light with September’s StateSide Payrolls for the Econ Baro in the balance. The Spoo’s “Baby Blues” of trend consistency confirmed dropping below their key +80% axis, indicative of still lower price levels near-term, (see Market Trends); by structural support of the S&P 500 itself, a Spoo move (inclusive of its current +50 “fair value” points) down below 5600 wouldn’t be untoward. Of note per Market Rhythms, the non-BEGOS Yen’s daily Price Oscillator by its “continuous contract” (which regularly has been one of the best Rhythms per our 24-test pure swing basis) flipped to Short effective today’s open. As for Gold, ’tis been a relative lackluster week given Mid-East events; more on the precious metals tomorrow in our 777th consecutive Saturday edition of The Gold Update.
03 October 2024 – 08:19 Central Euro Time
Yet again in a 180° whirl-’round, today at this time we’ve both Gold and Silver below their respective Neutral Zones for today, as also is the Spoo; none of the other BEGOS Markets are above same, and volatility is light. For Gold by its Market Profile, we’ve volume resistance at 2684, whilst such support is at 2653; (Gold’s EDTR currently is 33 points per Market Ranges); price on balance has been little-affected by the present Mid-East tensions; still by Market Values, Gold (in real-time) is +116 points above its smooth valuation line, price not having been below that key metric since 25 July. For the Econ Baro we’ve data including September’s ISM(Svc) Index and August’s Factory Orders.
02 October 2024 – 08:08 Central Euro Time
Whereas at this time yesterday both precious metals were above their Neutral Zones, today currently Gold and Silver are below them; the other BEGOS Markets are within same and volatility is pushing toward moderate, the geo-political impetus of yesterday having subdued. Looking at Market Rhythms for pure swing consistency, on at 10-test basis our best through yesterday are the Bond’s 12hr Parabolics and Swiss Franc’s 1hr MACD; on a 24-test basis we’ve Silver’s 2hr Parabolics and the non-BEGOS Yen’s daily Price Oscillator. At Market Trends, Oil’s “Baby Blues” (as noted yesterday after a long stint as negative) have finally risen above their 0% axis, the linreg trend having rotated to positive. Today’s incoming metric for the Econ Baro is September’s ADP Employment data.
01 October 2024 – 08:16 Central Euro Time
Both Gold and Silver are at present above today’s Neutral Zones; the other six BEGOS Markets are within same, and session volatility is light. By correlations amongst the five primary BEGOS components, the best currently is positive between the Euro and Gold. At Market Trends, the Bond’s linreg has rotated from positive to negative, as has been the case for Oil since 23 July; the balance of the BEGOS bunch still sport positive linregs with fairly firm “Baby Blues” for trend consistency. Q3 commences with the “live” (futs-adj’d) P/E of the S&P 500 at 42.5x and the yield 1.283% vs. 4.498% on the risk-free 3mo U.S. T-Bill. The Econ Baro looks to September’s ISM(Mfg) Index and August’s Construction Spending.
30 September 2024 – 08:11 Central Euro Time
Both Copper and Oil are at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility runs from light-to-robust, Copper notably already having raced 151% of its EDTR (see Market Ranges). The Gold Update — despite the yellow metal’s recent run to record highs — cautions near-term overvaluation vis-à-vis Gold’s Market Value, price (in real-time) +141 points above its smooth valuation line; the missive also issues our multi-catalyst stock market warning. ‘Tis the final trading day of Q3, the S&P 500 sporting the “live” P/E of 42.3x and the Spoo (in real-time) now +220 points above its smooth valuation line, (see Market Values for all five primary BEGOS Markets’ like valuations). The Econ Baro begins its week with September’s Chi PMI.
The Gold Update: No. 776 – (28 September 2024) – “Gold Surely Soaring; Stock Market Warning”
The Gold Update by Mark Mead Baillie — 776th Edition — Monte-Carlo — 28 September 2024 (published each Saturday) — www.deMeadville.com
“Gold Surely Soaring; Stock Market Warning“
Soaring indeed has been our Gold: year-to-date, price has risen from last year’s settle at 2072 to as high as 2709 this past Thursday, to then settle the week yesterday (Friday) at 2681. That is a net year-to-date gain of +29.4% to keep Gold on the podium per our BEGOS Markets Standings thus far for 2024:
Moreover, how lovely ’tis to see sweet Sister Silver topping the entire troupe. We’ve herein pounded the table seemingly forever on Silver’s relative undervaluation to Gold, both precious metals of which — despite record Gold highs — still remain cheap by currency debasement:
- Gold today at 2681 is nonetheless -28% below its Dollar debasement value (per the opening Gold Scoreboard) of 3739;
- Silver today at 31.92 is attractively -18% below its pricing by the average century-to-date Gold/Silver ratio of 68.5x, the ratio itself today 84.0x: but priced to that average ratio puts Silver instead at 39.16;
- ‘Course, this then is the cherry on top: price Gold today at its 3739 debasement value with Silver priced per the average Gold/Silver ratio of 68.5x and you’ve got Silver at 54.58 … just in case you’re scoring at home.
From Silver’s scoring to Gold’s soaring: the yellow metal’s year-to-date +29.4% gain through the 187 trading days thus far in 2024 ranks far and away its best percentage increase specific to such stint across this century’s 24 years. A distant second-best is 2016’s +24.9% gain through that year’s first 187 trading days; (the worst such year-to-date stint was -20.2% in 2013 as the wheels continued to come off following Gold’s having “gotten ahead of itself” as we’d herein presciently penned back in 2011).
More toward “The Now”: as well as Gold is soaring — yet still remaining cheap by Dollar debasement — price persists as “high” relative to near-term valuation vis-à-vis its smooth line borne of movements to those of the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500). Here from the website is our Market Value chart of Gold from one year ago-to-date astride that smooth valuation line; the oscillator in the lower panel (price less valuation) shows Gold presently priced as +148 points “high”, with “means reversion” inevitably in the balance as you can see across the graphic:
Near-term “overvaluation” notwithstanding, Gold simply looks great by its weekly bars from one year ago-to-date. Even were price to suddenly snap back down those 148 points as just shown (to 2533), ‘twould still be above the rightmost parabolic blue dot which per the weekly graphic is at 2478. Again, great:
Staying with our year-over-year theme, here next is the percentage track of Gold along with those of its key equities brethren. How’s the AEM leverage working out for ya? That track of Agnico Eagle Mines is +81%, followed by the Global X Silver Miners exchange-traded fund (SIL) +53%, Pan American Silver (PAAS) +52%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +50%, Newmont (NEM) +45%, Gold itself +42%, and Franco-Nevada sorting through its Panamanian exasperation (FNV) -5%. Still, that’s diversification, right there!
Meanwhile, on the heels of the Federal Reserve’s “Jumbo” -50bp FundsRate cut of a week ago, we’ve since received all the salient data to complete our inflation summary for August. Remember: those figures sporting the red backgrounds are running ahead of the Fed’s +2.0% inflation target. So was “Jumbo” in hindsight rather “dumbo”? FedGov Michelle “In the know” Bowman seems to think so, her dissenting Open Market Committee vote for “Jumbo” being “No”, preferring instead for -25bps to go. Might the FOMC later say “Oh no…”?
What we do know is that the Fed’s -50bp FundsRate cut has been beneficial on balance for the BEGOS Markets, six of the eights components therein having since moved higher, (save for the Bond and Oil). Let’s go ’round the horn for the whole bunch across their last 21 trading days (one month), replete with their respective grey trendlines and “Baby Blues”, the dots that depict the day-to-day consistency of each trend. Therein, note the tight correlation of the Metals Triumvirate as the panels for Gold, Silver and Copper appear practically identical:
Particularly for the precious metals, next we’ve their 10-day Market Profiles featuring Gold on the left and Silver on the right. Denoted are those respective prices having traded the most amount of volume during the past two weeks; such prices we regularly consider as support and resistance levels:
With but one trading day remaining in the month, indeed in Q3, ’tis time to bring up (literally) Gold’s structure by its monthly bars across the past 16 years, the stratified “memories” as labeled. Whilst we all understand that “nothing moves in a straight line” — and that Gold as aforeshown is significantly “high” relative to its near-term BEGOS valuation — The Big 3000 is sitting on the table, a price certainly to be achieved given that the yellow metal historically always catches up to prior high levels of debasement value (again which at present is 3739): ’tis merely about “The When”. And from today at 2681, a “mere” +11.9% puts Gold at The Big 3000:
“All fine info, mmb, but your title mentions ‘Stock Market Warning’, so…“
Yessir, Squire, we’ve saved the juiciest (or better stated “scariest”) bit for last. Let’s first go to the Economic Barometer, itself actually having notably improved over the past five weeks. Indeed from 22 August-to-date, 63 metrics have come into the Econ Baro, 38 (60%) of which have improved period-over-period. Thus the Baro has been boosted by better numbers combined with those “getting worse more slowly” –[P. Krugman, 02 May ’01]. Here ’tis, “flying high” (by some eyes), whilst the S&P 500’s red line blows through the skies:
But to our Stock Market Warning: as Squire duly reminds us, so is stated in this missive’s title. (Indeed for further analysis you may also refer back to the 712th edition of The Gold Update from 08 July 2023 entitled “Gold’s Downtrend Duly Dissed? Stocks’ 10 Crash Catalysts!”).
To continue, hardly have we been silent on the year-in, year-out overvaluation of the stock market as measured by the S&P 500. Simply stated by any historical gauge, earnings (or lack thereof) remain unsupportive of price, period!
- We just queried “AI” (“Assembled Inaccuracy”) for the current price/earnings ratio of the S&P. The “reply” was “29.2x” without respect to past or forward earnings. ‘Course because as you ad nauseum know we do the honest math, the “live” cap-weighted P/E is actually 42.3x using trailing twelve-month earnings, (earnings-less companies being assigned the price of their shares as the P/E). And since introducing such “live” P/E in 2013, it has increased +67%. Whoops.
- Again we quote J. B. Cohen: “…in bull markets the average [P/E] level would be about 15 to 18 times earnings.” To get down to such rational valuation, earnings at today’s S&P level need double if not triple. Does the above Econ Baro suggest such robust growth? Nope. Or shall the policies of the next StateSide President? Of course not. Whoops.
- The S&P 500’s market capitalization today is $50.3T for which the readily available money supply (M2) to cover is “only” $21.2T. Whoops.
- Had COVID never occurred (and thus neither the $7T of monetary infusion), the S&P today would be ’round 3000 (vs. today’s 5738) and everybody’d be happy as clams. Whoops.
- Geo-political disruptions (understatement). Whoops.
“That’s lots of catalysts, mmb, but what do you think really sets it off?“
The oldest catalyst throughout market history, Squire: flat out fear, influenced to an extent by the modern-day FinMedia which at times refers to a -5% correction as a “crash”; now just add a zero, (which for you WestPalmBeachers down there makes -50%). And today given there’re so many invested “first timers” (i.e. the happy, no-crash experience, marked-to-market millionaires), next time the fear shall be ferocious and future plans-altering. “Nobody Knows You When You Are Down and Out” –[Jimmie Cox, 1923]. Whoops.
And most importantly, overvaluation (to use a “woke” term) “awareness” is finally spreading. A valued friend (formerly at the very apex of a major investment bank) in a just-issued interim report to investors warned of a stock market correction reaching -50%. Respected Gold analyst Jim Rickards recently said same. Whilst we’re in the camp for a “milder” -35% skid, our excellent co-director here is in the -40% camp. Indeed “The When”? Before year-end? Whoops.
Then (hat-tip The Times of India) for further “awareness”:
Or more accurately, aBEARness? Got Gold??
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
27 September 2024 – 08:17 Central Euro Time
The Swiss Franc plus all three elements of the Metals Triumvirate are at present below today’s Neutral Zones; none of the other BEGOS Markets are above same, and volatility is pushing toward moderate. Maintaining an eye on the Market Values (in real-time) of the five primary BEGOS components: the Bond is basically trading at its smooth valuation line, the Euro is nearly +0.01 points “high”, Gold +156 points “high”, Oil -6.03 points “low”, and the Spoo +246 points “high”. Per Market Profiles for those five, the most heavily-traded prices of the last fortnight are: the Bond 125^00, the Euro 1.1160, Gold 2607, Oil 71.30 and the Spoo 5778. The Econ Baro concludes the week with metrics including August’s Personal Income/Spending and the “Fed-favoured” inflation read via Core PCE Prices.
26 September 2024 – 08:25 Central Euro Time
Both Copper and the Spoo are on the up-move, each at present above their respective Neutral Zones for today; Oil is below same, and BEGOS Markets’ volatility spans from light for the Bond to robust for Oil, the latter having already traced 131% of its EDTR (see Market Ranges). Oil is the sole component with a negative linreg (see Market Trends), albeit the consistency of such downside trend is waning as its “Baby Blues” are into their 11th session of rising; too, by Market Values in real-time, Oil (now 67.67) is -6.14 points below its smooth valuation line; and by Market Profiles, Oil’s two notably overhead volume price resistors are 69.70 and 71.30. Incoming metrics for the Econ Baro include August’s Durable Orders and Pending Home Sales, plus the final revision to Q2 GDP.
25 September 2024 – 08:11 Central Euro Time
We’ve weakness this morning in Silver and Copper, both at present below today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is light. As to Market Rhythms, our leaders for pure swing consistency are currently (on a 10-test basis) the Bond’s 12hr Parabolics, the Euro’s 15mn Moneyflow, and the 2hr MACD for both Silver and the Swiss Franc; too (on a 24-test basis) we’ve the Bond’s 15mn MACD, the Swiss Franc’s 6hr MACD, and the non-BEGOS Yen’s daily Price Oscillator. The S&P 500 is now six days “textbook overbought” and the futs-adj’d “live” P/E 42.4x. The Econ Baro awaits August’s New Home Sales.
24 September 2024 – 08:10 Central Euro Time
Copper is the sole BEGOS Market at present outside (above) today’s Neutral Zone; however, overall volatility is pushing well toward moderate, and specific to the red metal, it already has traced 107% of its EDTR (see Market Ranges), plus (now 4.4145) price has moved up above its 10-day Market Profile, for which key volume-price supports therein are 4.3450 and 4.3000; too by Market Trends, Copper’s “Baby Blues” of trend consistency are smoothly rising. Looking at correlations amongst the five primary BEGOS components, the best currently is positive between Oil and the Spoo. The “live” P/E (futs-adj’d) of the S&P 500 is 42.2x. And today the week gets going for the Econ Baro with September’s Consumer Confidence.
23 September 2024 – 08:23 Central Euro Time
We start the week to find the Bond at present below its Neutral Zone for today; the other BEGOS Markets are within same, and volatility is light. The Gold Update highlights the yellow metal’s further flying to new highs, but does question the Fed’s -50bp rate cut versus our anticipated -25bp move; therein cited as well is the unsupportive monetary inflow of late into the otherwise record-setting S&P 500, (as too was “X’d” [@deMeadvillePro] this past Friday): mind the S&P 500 MoneyFlow page. Specific to the Spoo, in real-time ’tis +240 points above its smooth valuation line (see Market Values). The Econ Baro is quiet today ahead of the week’s batch of 11 incoming metrics, including the “Fed-favoured” gauge of inflation — Core PCE Prices — come Friday.
The Gold Update: No. 775 – (21 September 2024) – “Gold Flies as Dumbo* Whilst the Fed Goes Jumbo”
The Gold Update by Mark Mead Baillie — 775th Edition — Monte-Carlo — 21 September 2024 (published each Saturday) — www.deMeadville.com
“Gold Flies as Dumbo* Whilst the Fed Goes Jumbo”
Thursday’s Prescient Commentary opened as follows: “We were wrong about the Fed, it having cut its Funds Rates -50bp rather than by our -25bp assertion; and as is our wont, when we’re flat out wrong, we fess up…”
Wrong indeed. Through many-a-missive in this year’s early months, we went on about the Federal Reserve needing to actually make a further FundsRate increase, given the mathematical proof of inflation remaining well away from the Fed’s “preferred target” of 2%.
But then came the month of May and it all started to go wrong for the Economic Barometer. So damaged became the Econ Baro that come the Federal Open Market Committee’s 31 July Policy Statement, we asserted that they’d have to vote to reduce the FundsRate by -0.25% from the then 5.25%-5.50% range to 5.00%-5.25%. Yet instead, the FOMC surprisingly stood pat.
Now just came the FOMC’s most recent vote this past Wednesday. Contrary to the FinMedia’s fervoured anticipation of a “Jumbo Cut”, we adamantly put forth time and again ‘twould be a -0.25% cut rather than a mouth-foaming -0.50% cut (even as the latter was already priced into the FedFundsFutures) for three key reasons:
- Unexpected inflation pop: for August, the “core” inflation readings at both the wholesale (Producer Price Index) and retail (Consumer Price Index) levels came in at an annualized +3.6% pace vs. consensus for +2.4%; pop goes the wallet;
- Poor Fed optics: as herein penned back on 24 August: “Our case for a rate cut back on 31 July did not come to pass, which lends credence to a two-pip reduction on 18 September. But then the optics would be poor for the Fed being too slow, thus we think ’twill be but one pip they’ll go.” But no, ’twas instead “Jumbo”;
- Rate cut history: So far this century — save during times of extreme financial distress — rate cuts otherwise have always been in units of -0.25%. The three exceptional periods were 1) 911 and the DotComBomb; 2) the FinCrisis; and 3) COVID.
Such logic circumvented, as Squire would say, ’tisn’t about us. Simply stated we were wrong; so let’s move on.
“But hang on mmb, ’cause maybe the Fed now thinks ‘extreme financial distress’ is coming…“
Oh come now, dear Squire. With “Old Yeller’s” Treasury Trillions desperately coming due, an electorate bent on lack of so-called “Presidential timber” even as the civil society collapses, and the S&P 500 truly trading at 41.9x earnings with a market cap of $49.8T supported by s StateSide liquid money supply (M2) of “just” $21.1T, what could possibly go wrong? Nothing to see here. So again, let’s move on … to Gold! Here’ tis, flying as does Helen Aberson’s and Harold Pearl’s fabulous Dumbo from 1939, (*later to be trademarked by what today is Disney Enterprises, Inc.):
Suitable for framing is the above graphic of Gold’s weekly bars from one year ago-to-date. And yes, price having settled yesterday (Friday) at an All-Time Closing High of 2647, as therein noted ’tis still stunningly cheap relative to the debasement of the Dollar. Indeed per yesterday’s record intra-day high of 2651, Gold trades at a -29% discount to its 3727 debasement value, per the opening Scoreboard.
And then there’s Silver: per the graphic’s table, the Gold/Silver ratio of now 84.0x is well-above its century-to-date average ratio of 68.4x, so much so that were Silver to snap-adjust to such average, rather than priced today at 31.50, she’d be +23% higher at 38.67. Moreover, whilst Gold is at an All-Time High, Silver’s current 31.50 level is -37% below her own All-Time High of 49.82 recorded away back on 25 April 2011. Ad nauseum: “Don’t forget Sister Silver!”
Fortunately for the aforementioned Econ Baro, its multiple months (May into August) of nausea waves have morphed into somewhat blessed relief. Having bottomed one month ago to the day (on 21 August), the Baro has since been climbing out nicely. For this past week alone, nine of the Baro’s 14 incoming metrics improved period-over-period, notably including September’s New York State Empire Index and that for National Association of Homebuilders, plus August’s Housing Starts and Building Permits, as well as Industrial Production.
Still stumbling however (and not surprisingly so given the overall downward track of the Baro) was the Conference Board’s negative “lagging” indicator of Leading Indicators; (for you newer readers, we regularly refer to them as “lagging” given the Baro significantly leads them). Still, with the StateSide economy’s recent advance, add in the Fed’s “Jumbo” rate cut and what’ll we get? Renewed inflation? Yet if the economy resumes folding, indeed stagflation? (Right, we’re not supposed to go there…) Here’s the Baro:
‘Course, all the post-Fed excitement is over the stock market’s “Going to a Go-Go” –[The Miracles, ’65]. But as we “X’d” (@deMeadvillePro) last evening, the MoneyFlow of the S&P 500 — as regressed into S&P points — is vastly underperforming the Index itself. Be it by the latest weekly, monthly, or quarterly measure, the euphoric buying to a record high (5734) is at best thin as we below see per one of our favourite market-leading indicators. We thus anticipate lower S&P levels near-term; after all, ’tis the first day of “fall”; (write it down):
Specific to Gold, as does Dumbo, ‘twould be great to see it continue flying high in the sky. However price is getting somewhat stretched above its “smooth valuation line” relative to movements vis-à-vis those components comprising our five primary BEGOS Market (Bond / Euro / Gold / Oil / S&P 500). Per the panel at lower left, we see Gold denoted as presently being +134 points “high” by the oscillator (price less valuation). Obviously that is a near-term trading measure, given that Gold most broadly (as earlier noted) is better than -1000 points below its debasement value. Too, within this near-term trading vein, the panel at lower right is Gold’s EDTR (Expected Daily Trading Range), presently set for Monday’s session at 34 points. (Naturally, you can view all the daily updates to these metrics at the website):
Next let’s go to Gold’s two-panel graphic of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right. To be sure, the “Baby Blues” of trend regression consistency have been spot-on brilliant: as we on occasion quip: “Follow the Blues instead of the news, else lose yer shoes”. Meanwhile, the Profile clearly shows 2607 as Gold’s firmest near-term volume-supportive price:
Looking ever more similar to Gold is Silver by her daily bars (below left) and Profile (below right). Still, given Sister Silver’s wayward tendencies to go waltzing off with Cousin Copper, we’re not that confident about 31.00 holding as the denoted dominant near-term trading supporter, (albeit Copper has been firming through the past six weeks). But as we’ve said, whereas Gold broadly is still cheap, Silver remains super cheap(!) Here’s the graphic:
Having opened with the Fed, let’s close with same. Over here, financial friends with whom we spoke almost all agreed that the Fed’s rate cut would be -0.25% (as, in fact, voted FOMC member Michelle Bowman), although a case was made for -0.50%, if for no other reason than a shift from the prior 5.25%-5.50% target range to now 4.75%-5.00% wasn’t that material of a change, (whereas from say 1.50% to 1.00% would be quite significant). But again as earlier cited, should the economy be garnering some renewed strength with money now a bit easier by which to come, then shall inflation add to a higher sum? Better to not be a dumbo without Gold, but fly as Dumbo with that which you hold.
Which brings us to this cool view of Disney’s Dumbo 1/4oz. Gold coin:
Now that really is the only way to fly: Gold High!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
20 September 2024 – 08:22 Central Euro Time
The Swiss Franc along with the Metals Triumvirate are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is light. The “live” (futs-adj’d) P/E of the S&P 500 is 42.6x (+68% above its inception a dozen years ago) and the annualized yield 1.286% vs. 4.593% on risk-less 3mo U.S. dough; in the last 10 trading days, the S&P has swung from being mildly “textbook oversold” to now moderately “textbook overbought”: indeed through the 181 trading days year-to-date, the S&P has completed 113 of them (62%) in some degree of being near-term technically overbought as excess post-COVID monetary infusion ($7T) continues permeates risk-full equities. The somewhat “recovering” Econ Baro is at highest oscillative level since mid-June.
19 September 2024 – 08:22 Central Euro Time
We were wrong about the Fed, it having cut its Funds Rates -50bp rather than by our -25bp assertion; and as is our wont, when we’re flat out wrong, we fess up; (more on the Fed in Saturday’s upcoming edition of The Gold Update). At present, the three elements of the Metals Triumvirate, plus Oil and the Spoo all are above their respective Neutral Zones for today; none of the other BEGOS Markets are below same, and volatility looks to be fully robust by session’s end. As to current correlation amongst the five primary BEGOS components, the most so is positive between Oil and the Spoo; (we view such correlations as important for hedging between two markets). The Econ Baro concludes its week today with metrics that include September’s Philly Fed Index, August’s Existing Home Sales and Leading (i.e. “lagging”) Indicators, plus Q2’s Current Account Deficit.
18 September 2024 – 08:21 Central Euro Time
We’ve at present the Swiss Franc above today’s Neutral Zone whilst below same are Silver and Copper; BEGOS Markets’ volatility is mostly light. Looking at Market Rhythms for pure swing consistency, there are four to currently highlight on a 10-test basis: Oil’s 2hr Price Oscillator, Silver’s 4hr Parabolics, the Bond’s 12hr Parabolics, and Gold’s 1hr MACD; for the 24-test basis, the one standout is the non-BEGOS Yen’s daily Price Oscillator. For the Econ Baro we await August’s Housing Start/Permits. And ’tis “Fed Day”, the FOMC releasing its Policy Statement at 18:00 GMT: our assertion is a -25bp FedFunds cut from the present 5.25%-5.50% target range to 5.00%-5.25%; similarly priced in for that now are the October FedFundsFutures.
17 September 2024 – 08:22 Central Euro Time
At present all eight BEGOS Markets are within today’s Neutral Zones, and volatility is quite light ahead of a bevy of incoming metrics for the Econ Baro, namely September’s NAHB Housing Index, August’s Retail Sales and IndProd/CapUtil, plus July’s Business Inventories. Going ’round the Market Values’ horn for the five primary BEGOS components, we’ve: the Bond better than +3 points “high” above its smooth valuation line, the Euro +0.12 points “high”, Gold +112 points “high”, Oil -5.11 points “low” and the Spoo +200 points “high”. The best current directional correlation amongst those five is positive between the Euro and Gold. Oil’s cac volume is rolling from October into that for November. And the FOMC begins its two-day meeting.
16 September 2024 – 08:16 Central Euro Time
The Euro, Swiss Franc, Gold and Silver all begin the week at present above their respective Neutral Zones for today; none of the other BEGOS Markets are below same, and volatility is mostly light. The Gold Update highlight’s the yellow metal’s fresh All-Time High and the comparably firmness of moneyflow into the Gold’s futures contracts year-to-date; wariness however is cited as the a dearth of trading volume leading to these most recent highs per the Market Profile; the Update also reiterates our sense that the FOMC on Wednesday shall vote for just a -25bp (not -50bp) FedFunds rate reduction, especially given the upticks in August’s inflation measures. The Spoo’s cac volume is rolling from September into that for December. And the Econ Baro awaits September’s NY State Empire Index.
The Gold Update: No. 774 – (14 September 2024) – “Fresh Gold Highs for Buyers Wise”
The Gold Update by Mark Mead Baillie — 774th Edition — Monte-Carlo — 14 September 2024 (published each Saturday) — www.deMeadville.com
“Fresh Gold Highs for Buyers Wise”
Seasoned supporters of Gold well remember the late, great Richard Russell (decd. 2015), who said, (as on occasion herein reprised): “There’s never a bad time to buy Gold.” Surely in his ascended state, his spirit veritably senses vindication of such declaration.
Indeed: Gold per the December contract settled yesterday (Friday) at 2606, its highest-ever closing price, en route having traded up to 2615, +45 points above the prior All-Time High recently recorded on 20 August at 2570. And thus The Gold Update’s nearly 15 years of querying “Got Gold?”, too, is being vindicated.
Since our first edition dated 21 November 2009, the price of Gold is +126% from 1151 to now 2606. Oh to be sure, the Great American Savings Account (aka The S&P 500, “Casino 500”, “Airhead 500” et alia) is across the like stint +415% from 1091 to now 5626, (plus all those dividends en route). Yet as we regularly caution from “The Means Reversion Dept.”, the S&P’s “live” price/earnings ratio today is 41.6x which is +70% above its inception (in 2013) at 25.4x, whereas Gold today at 2606 is -30% below the opening Scoreboard’s debasement level of 3726
“So why are you going on about all this, mmb?”
Because simply, Squire, were both Gold and the S&P to revert to such means at this instant, the yellow metal would instead be +224%, ahead of the “Casino 500” +215% (again, before dividends). Still, not much difference there, however means reversion eventually recurs and shakes emotive folks out of stocks, whereas Gold buyers do otherwise. (“Tick tick tick goes the clock clock clock…”)
And given the yellow metal’s recent run to these record high skies, Gold buyers clearly have been wise. The following chart is of Gold by the month from the year 2020-to-date. The key here is the region of the lower panel thus far in 2024. Each green bar is the month’s profit per Gold contract purchased. So thus far through the nine trading days of September, the height of the rightmost bar as noted is $7,020/contract, had you bought one at the month’s opening precise price of 2536.0. The gain to the current precise price of 2606.2 is +70.2 points which by the leverage of $100/contract yields that $7,020; (for you home-scorers, that is a nine-day gain of +60.8% given a per contract margin requirement of $11,550). But the point is: the year-to-date buying participation in Gold is the best ’tis been since COVID kicked in back in 2020. In fact, per the barely visible red bars since a year ago, for Gold ’tis been all monetary inflow:
‘Course, beyond the catalyst of currency debasement, ours is not to reason “why” Gold is getting the buy. In a sense, the Federal Reserve’s initial -0.250% FundsRate cut this next Wednesday (18 September) ought by now be “priced-in”. As to some degree, too, is further global instability per the pending StateSide election outcome. Let’s cue it again: “Got Gold?”
We’ve got Gold right here in turning to its weekly bars and dotted-parabolic trends from one year ago-to-date. And are the strings of blue dots ever one’s friend … barring your being one of those Smart Alec Shorts. Welcome to 2600:
Meanwhile, trying to un-squeeze itself is the Economic Barometer, it having received a boost these last few weeks. And given “the rising tide of inflation lifts all boats”, August’s newly reported levels thereto at both the wholesale (Producer Price Index) and retail (Consumer Price Index) levels on balance pipped back up a bit, notably in their “core” readings. This adds to our aforementioned assessment that — come Wednesday — the Fed shall only cut their FundsRate by 25 basis points rather than by 50, albeit the latter curiously is still sought per the FedFundsFutures. But let’s see if that trade unwinds as we work toward Wednesday. Here’s the Baro:
You tell ’em, Yellen; but more aptly by the Baro, it instead appears “deep into a recession”. (Just sayin’, but that’s Washington…)
Next we go back to the precious metals, the following two-panel graphic featuring on the left Gold’s daily bars from three months ago-to-date, with same on the right for Silver. For the yellow metal ’tis been “all on go”, whilst for the white metal — despite her recent rightmost up-kick — she’s been more aligned with red metal Copper these recent months. Further, Sister Silver by price continues to lag Gold: the century-to-date average Gold/Silver ratio is 68.4x … but the actual ratio at present is 83.9x. And yes, just as both Gold inevitably reverts to its Dollar debasement value and the S&P 500 to its average P/E ratio, so too does the Gold/Silver ratio revert to its mean: which with Gold today at 2606 in turn prices Silver +23% above her current 31.07 level at 38.08. Thus as we yet again ask “Got Gold?”, we in kind also reprise “Do not forget the Silver!” Here’s the graphic:
As to the respective 10-day Market Profiles, here they are for Gold (below left) and for Silver (below right). Whilst ’tis nice to see no overhead trading resistors, there are for both metals dearths of volume activity below current levels, which for you WestPalmBeachers down there means don’t expect these two markets to keep moving up in a straight line. Too, should you peek at the website’s Gold page, you’ll see that price by the “Market Value” metric is +114 points above its smooth valuation line (as therein described). Either way, these Profiles at present are pretty:
So with respect to fresh highs for Gold, let’s update the stack:
The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3726
Gold’s All-Time Intra-Day High: 2615 (13 September 2024)
2024’s High: 2615 (13 September 2024)
10-Session directional range: up to 2615 (from 2504) = +111 points or +4.4%
Gold’s All-Time Closing High: 2606 (13 September 2024)
Trading Resistance: none per the Profile 2341
Gold Currently: 2606, (expected daily trading range [“EDTR”]: 32 points)
Trading Support: nearby per the Profile 2605 / 2596 / 2582, then 2544-2526
10-Session “volume-weighted” average price magnet: 2545
The Weekly Parabolic Price to flip Short: 2415
The 300-Day Moving Average: 2159 and rising
The 2000’s Triple-Top: 2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low: 1996 (14 February)
The Gateway to 2000: 1900+
The Final Frontier: 1800-1900
The Northern Front: 1800-1750
On Maneuvers: 1750-1579
The Floor: 1579-1466
Le Sous-sol: Sub-1466
The Support Shelf: 1454-1434
Base Camp: 1377
The 1360s Double-Top: 1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland: The Whiny 1290s
The Box: 1280-1240
Thus into the new week we go, with 14 metrics due for the Econ Baro, plus of course the Federal Open Market Committee’s Policy Statement on Wednesday. More broadly, bear in mind that:
- Equities per the S&P 500 remain exceedingly (understatement) expensive given the lack of supportive earnings generation;
- Gold despite new All-Time Highs remains cheap relative to Dollar debasement;
- Silver relative to Gold remains super cheap!
And so to segue from those closing notes:
Indeed be buyer-wise with Gold (and Silver!) as the prize!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
13 September 2024 – 08:16 Central Euro Time
Gold both yesterday and today has recorded its first All-Time Highs since last so doing on 20 August (then 2570), the newest high now 2599. Gold at present is above its Neutral Zone for today, as is the Bond and Swiss Franc; none of the other BEGOS Markets are below same, and volatility is mostly light. By Market Values (in real-time) Gold is +102 points above its smooth valuation line; more of course in tomorrow’s 774th consecutive Saturday edition of The Gold Update. The S&P 500’s four-day rally (which would start toward a fifth day given at present the Spoo’s price vis-à-vis fair value) has pushed the “live” P/E up to a futs-adj’d reading of 41.7x. The Econ Baro concludes its week with September’s UofM Sentiment Survey along with August’s Ex/Im Prices.
12 September 2024 – 08:20 Central Euro Time
Gold, Copper and Oil are all at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light. At Market Trends, the Spoo’s “Baby Blues” of trend consistency have (as anticipated in Tuesday’s note) confirmed dropping below their 0% axis, the linreg having rotated from positive to negative; similar is the case for the Euro, whereas that for Oil has been negative for some seven weeks. Looking at Market Profiles, the current prices of the Bond, Gold and Silver are all very near their most commonly traded levels of the past fortnight. And for the Econ Baro, today’s incoming metrics include August’s wholesale inflation via the PPI, plus the month’s Treasury Deficit.
11 September 2024 – 08:17 Central Euro Time
At present above their respective Neutral Zones for today are the Bond, Euro, Swiss Franc, Gold, Silver and Copper; below same is the Spoo, and volatility for the BEGOS Markets is firmly moderate. Oil yesterday traded down to a 16-month low (65.27). By Market Rhythms on a 10-test basis for pure swing consistency, we’ve for the Bond both its 6hr Moneyflow and 12hr Parabolics, plus the Swiss Franc’s 2hr Price Oscillator. Market correlations amongst the five primary BEGOS components have deteriorated such that currently ’tis “each market for itself” rather than any notable continuity pairings (positive or negative). The Econ Baro looks to retail inflation via August’s CPI.
10 September 2024 – 08:18 Central Euro Time
The Spoo is the sole BEGOS Market at present outside (below) today’s Neutral Zone; session volatility to this point across the BEGOS spectrum is quite light, with nothing due for the Econ Baro. With respect to yesterday’s +1.2% gain for the S&P 500, its MoneyFlow regressed into S&P points comparatively gained just +0.4%: such weakness ought bring further near-term selling for the Index itself. Too, the Spoo’s “Baby Blues” (see Market Trends) are in real-time down to teasing the 0% axis: confirmation of penetrating that axis to the downside shall mean the linreg trend having rotated from positive to negative. Today’s EDTR (see market Ranges) for the Spoo is 80 points. As for Market Rhythm pure swing consistency, currently the best for the Spoo on a 10-test basis is its daily MACD, whilst on a 24-test basis ’tis its daily Parabolics. The futs-adj’d “live” P/E for the S&P is 39.9x.
09 September 2024 – 08:16 Central Euro Time
The week begins finding only Silver and Oil are at present within today’s Neutral Zones; below same are the Bond, Swiss Franc and Gold, whilst above are Copper and the Spoo; BEGOS Markets’ volatility is pushing toward moderate. The Gold Update notes the stodgy state of late for the yellow metal, but the broader outlook by trend firmly positive. Oil on Friday traded below (to 67.17) last December’s low (of 67.71): by Market Values, Oil (in real-time) is -9.01 points below its smooth valuation line, the lowest divergence in at least a year; too, Oil remains the sole BEGOS component with a negative linreg (see Market Trends), although — save for the Swiss Franc — the “Baby Blues” of trend consistency are falling for the six other markets. The Econ Baro starts its week with July’s Wholesale Inventories and Consumer Credit.
The Gold Update: No. 773 – (07 September 2024) – “Gold Stodgy; Stocks Dodgy”
The Gold Update by Mark Mead Baillie — 773rd Edition — Monte-Carlo — 07 September 2024 (published each Saturday) — www.deMeadville.com
“Gold Stodgy; Stocks Dodgy”
Per our prior missive on Gold having recorded its second-narrowest trading week of 2024 (by percentage distance between high and low), now this last week’s performance perhaps is best categorized as “stodgy”, which by the Oxford English Dictionary (for you WestPalmBeachers down there) in part is defined as “lacking in spirit or liveliness.” To wit, by entering this past trading week with an EWTR (“expected weekly trading range”) of 81 points, Gold’s actual range from low-to-high was just 70% of that at 57 points, price settling yesterday (Friday) at 2527, despite all the “Fed” this, and “Jobs” that, and stocks’ “Worst Week” in a year, suddenly replete with FinMedia fear.
In turn, that 2527 price level is (for those of you scoring at home) -32% below Gold’s Dollar debasement valuation of 3726 as above depicted in the upper panel of the Gold Scoreboard. Yes, we regularly harp upon such undervaluation if for no other reason than Gold historically catches up to its supply-adjusted debasement value (i.e. per the Dollar’s green “M2” money supply line) as shown in the Scoreboard’s righthand panel. Do not lose sight of that fact, lest you end up in the vast “woudda shoudda coudda” crowd who are without Gold once it justifiably really takes hold.
Still, stodgy as it seems, our broader graphic of Gold’s weekly bars from one year ago-to-date remains robust and cheerful. Here ’tis:
‘Course, the Buck’s upside pluck into September 2022 per the above weekly chart clearly came in tandem with the Fed raising its Funds Rate. But now that the Open Market Committee per its 18 September Policy Statement shall initially reduce said rate by -0.250%, the bang for the Buck is starting to wane. Yes, the nattering nabobs of Gold negativism love to swiftly point out that the yellow metal offers no yield. But given Gold’s aforementioned undervaluation of -32%, that “catch-up yield” by price alone looks excellent to us.
Meanwhile “catching-down” (if you will) is the “dodgy” stock market. ‘Tis always entertaining to read the FinMedia freak-out whenever the market puts in even just a pimple of a correction. “S&P 500 tumbles Friday to post worst week since 2023” trembles CNBS, (our being more precise, since that ending 11 March 2023). True, the S&P’s net loss for the past week was -4.2%. But let’s put that in context:
- from the year 2000-to-date — through the DotComBomb, FinCrisis, and CrazyCovid — this past week’s net loss for the S&P 500 was its 54th worst across those 1,288 weeks. “Oh dear!”
Hardly ho-hum, but the fear elicited through the FinMedia was both formidable and (for us) fun. And it shows just how complacent have become the “youngsters” of modern-day Wall Street. Let’s again reprise BTO from ’74 with “You Ain’t Seen Nothing Yet”
“Well, it is September, mmb…”
So ’tis, Squire, and yes, across the 54 years from 1970 through 2023, by average net monthly percentage change, September does rank as the year’s worst month for the S&P 500, followed by February; the best two months are April (surprise!) and November. (The once highly-vaunted month for the “January effect” ranks fourth-best of the 12 all told).
But in support of Squire’s point, September is the notorious month of so-called tax-loss selling season and fiscal year-end for many a mutual fund.
Yet today, the S&P 500 more broadly refuses to be severely shaken. The ongoing “out-of-sight, out-of-mind” level of our “live” S&P 500 price/earnings ratio eternally living in the 30s and 40s remains inanely uncanny. Again remindful of one J. B. Cohen: “…in bull markets the average [P/E] level would be about 15 to 18 times earnings.” However: that for the summation of the 503 S&P constituents settled yesterday at 38.2x (price ÷ trailing twelve-month earnings x market cap weighting, with earning-less stocks ascribed a P/E of their stock price).
‘Course the culprit supporting it all is the $7T COVID monetary injection essentially (as we’ve mathematically proven) having ended up in the stock market. And ’tis still there, refusing to go anywhere: thus the bubble. Risk-free debt is boring and doesn’t work well in showing off at cocktail parties. As for all those talking marked-to-market millionaires … one day they’ll morph into head-hanging thousandaires. ‘Tis only fair … but beware: the next P/E means reversion shan’t be a happy excursion.
However, fairing a bit better of late is the Economic Barometer. In just the past holiday-shortened StateSide week, of the 13 incoming metrics for the Econ Baro, nine improved period-over-period, the notable standouts being July’s Factory Orders, Q2’s revision to Productivity, and for August both Hourly Earnings and The Institute of Supply Management’s Services Index.
Noted however, was the really rotten ADP read on August’s Employment: for the past post-COVID 36 months, the average monthly jobs gain had been 278,000; this time ’round the number was just 99,000, some -34% below consensus, not to mention the July reading being revised lower as well. But “Labor’s” number (dare we say “of course”) improved, as on balance did the Baro:
So does all such stalwart economic improvement ward off recession? From the “Dept. of Say It Ain’t So, Joe” we’ve this (hat-tip Dow Jones Newswires): “The bond market just flashed a reliable recession signal.” Glad to see them just now figuring this out. The Econ Baro’s been portraying such for the past half year … (but as you know, it leads everything else). “Fuses as usual in the white security box.” –The RAF’s unnamed Air Vice Marshal, “Thunderball”, ’65]
Still, anything but thundering is stodgy old Gold. In below viewing our two-panel graphic, on the left with price’s daily bars from three months ago-to-date we’ve Gold’s baby blue dots of trend consistency dropping off, not even have achieved the key +80% axis, whilst on the right in the 10-day Market Profile, the 2540-2560 zone shows as overhead volume resistance. As noted in recent missives, our forecast high for the year of Gold 2375 we now view as mid-structural price support:
Silver’s drill is similar, albeit with a weaker bent. Like those for Gold, Silver’s “Baby Blues” (below left) are falling, whilst her Profile (below right) depicts major volume resistors at 29.15, 29.90 and then the 30.30-30.45 zone. And with the Gold/Silver ratio now back up to nearly 90x (presently 89.4x), what can one say other than “Poor ol’ Sister Silver!”
We earlier mentioned the stock market’s buoyancy given the presto-chango $7T post-COVID money supply injection, indeed there being so much dough sloshing to and fro that — save for stocks — there’s ostensibly no where else for it to go in this Investing Age of Stoopid à go-go. But then, too, is the stark reality of S&P 500’s market cap having settled yesterday at $47.3T supported by a liquid StateSide money supply (M2) of “only” $21.1T, i.e. not nearly enough dough! Whoa! And yet, you’d love to see your kid become a Wall Street pro? Oh pity the poor floor specialist, don’t you know…
Better instead, buddy-boy, go buy some Gold!
Cheers!
…m…
www.TheGoldUpdate.com www.deMeadville.com and now on “X”: @deMeadvillePro