Mark

The Gold Update: No. 728 – (28 October 2023) – “S&P Squirms; Gold Firms”

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The Gold Update by Mark Mead Baillie — 728th Edition — Monte-Carlo — 28 October 2023 (published each Saturday) — www.deMeadville.com

“S&P Squirms; Gold Firms“

Welcome to this week’s missive featuring your favourite end-of-month graphics as we put the wraps on October, (albeit with two trading days in the balance followed by Wednesday’s EuroSide holiday).  And sadly as the Mid-East mayhem continues, the safe-haven bid has further fed into the price of Gold toward settling yesterday (Friday) at 2016, the highest weekly close since 05 May.

However, per this piece’s title, as is our occasional wont we start with stocks, specifically as regards the S&P 500’s state of squirm.  To wit from the “‘Tis Not About Us Dept.” you may recall that herein penned back on 22 July:

►“As we tweeted (@deMeadvillePro) last Thursday [20 July]:  S&P only -0.7% today (Thu) but the MoneyFlow drain was the most for any one day since 13 Sep ’22.  Suggests near-term top is in place.”

‘Course you regular website readers know the MoneyFlow is a directionally-leading characteristic of the S&P 500 which had settled this past 20 July at 4535.  From whence, ’tis all gone rather wrong as depicted by the following daily graphic of the S&P’s closings year-to-date:

Indeed since that tweet, the S&P 500 has declined -9.2% (from 4535 to now 4117).  However for the moment, the S&P has become “textbook oversold” such that it perhaps gets a bounce before the next trounce. That’s technically.

But fundamentally our “live” price/earnings ratio of the S&P 500 remains high in the sky at 34.6x.  And to be sure, Q3 earnings season isn’t helping the situation, regardless of the FinMedia’s fawning.  For example:  last evening, once-revered Barron’s ran with “Why a Solid Earnings Season Isn’t Good Enough for the Stock Market”.  But because we actually do the math, of 596 companies (including 226 S&P constituents) having thus far reported for Q3, just 51% have bettered Q3 of a year ago.  That’s considered “Solid”?

“But 67% beat estimates, mmb…” 

You know Squire had that comment ready to go.  But were we ever to risk dipping a toe into the equities market, we’d desire our shareholdings to be in companies that grow the bottom line rather than shrink it.  Yet such has been the illogical lean to the latter that exists in today’s Investing Age of Stoopid.  Nuff said.  To Gold we go.

And what better segue than to bring up the BEGOS Markets standings year-to-date, Gold having moved from fourth position just at September’s end to now first, +10.2% to this point in 2023.  (Note therein the Dollar Index being +3.0% which by conventional wisdom doesn’t happen when Gold rises … except for the fact that “Gold plays no currency favourites” as you regular readers well know).  ‘Course the Bond has been creamed, price -12.1% in 2023 whilst yield has risen from 3.975% at year-end 2022 to now 5.023%.  As for Sister Silver lacking pace, she’s not getting the geo-political gain garnered by Gold, especially with Cousin Copper on the skids.  Here’s the whole gang:

As for Gold’s weekly bars from a year ago-to-date, we’ve locked in the rightmost second blue dot of the new parabolic Long trend, the prior Long trend having failed miserably only to have then been saved by an equally poor trend (the three red dots) for the Shorts.  Although we’re rah-rahing away there, should there hopefully be some resolution to the Mid-East mayhem, Gold typically would then drop like a stone.  For as we opined a week ago, Gold shan’t become moon-bound until the current All-Time High (2089) is eclipsed; thus it remains for now range-bound, all as herein detailed a week ago.  Either way, from Gold’s recent low just on 06 October at 1824, price has since risen to as high (yesterday) as 2020, or +10.7% in 16 trading days.  Here are the weeklies:

Now let’s stay in the year ago-to-date mode in turning to Gold and its percentage track along with those of top-tier precious metals companies, wherein not all have positively fared.  From the bottom up we’ve Newmont (NEM) -11%, Pan American Silver (PAAS) -9%, the Global X Silver Miners exchange-traded fund (SIL) -4%, Agnico Eagle Mines (AEM) +9%, Franco-Nevada (FNV) +10%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +16%, and Gold itself +21% from this day a year ago.  What stands stark in this construct is all these equities lagging Gold!  Simply look mid-chart ’round May when Gold was as high as ’tis now, but every equity itself was materially higher than now!  The expression may go:  “Dere’s Gold in dem dere hills!”, but dere’s real value in dem dere equities!  Wow!

Meanwhile, is the StateSide economy Golden?  Ehhhh, not really.

“But the Econ Baro had a good week, ehhhh mmb?” 

Indeed it did Squire.  In fact, of the ten incoming metrics for our Economic Barometer, eight of them improved period-over-period.  However, let’s focus on two of those “improvers”.  First is the first peek at Q3 Gross Domestic Product:  an annualized +4.7% real growth.  Impressive.  However, again as we do the math:  42% of the otherwise unreported nominal +8.4% growth pace was due strictly to inflation.  Unimpressive.  And the so-called “Fed-favoured” Core Personal Consumption Expenditures Price Index — after increasing just +0.1% in August — leapt by +0.3% for September:  annualized that’s +3.6% and the 12-month summation is +3.5%.  Yes, the latter is a two-year low … but is it near the Federal Reserve’s target of +2.0%?  No.  Still, our best guess for Wednesday’s Open Market Committee Policy Statement is that they’ll unanimously again lie low.  Heaven forbid the Fed actually be ahead of the curve.  Here’s the Baro:

Let’s next go ’round the horn for all eight components that comprise the BEGOS Markets.  Here we’ve their daily bars across the past 21 trading days (one month).  Each market has its grey linear regression trendline, four at present rising (Euro, Swiss Franc, Gold and Silver) and four thus falling (Bond, Copper, Oil and S&P 500).  ‘Course, the consistency of each trend is denoted by the “Baby Blues” which specifically for the Swiss Franc have just dipped below their +80% axis, suggestive of a cheaper Franc near-term.  Is that merely coincident that the FOMC may just raise rates, in turn increasing Dollar strength?  ‘Tis one of those things that makes us go “Hmmmm…”:

We’ve already alluded to the white metal not getting the geo-political bid that’s been boosting the yellow metal, the Gold/Silver ratio now 86.8x vs. its millenium-to-date average of 67.8x.  Priced to that average, Silver today at 23.24 would instead be +22% higher at 29.73, (just in case yer scorin’ at home).  Reflective below of Sister Silver not keeping pace is price being mid-10-Day Profile on the right whereas Gold essentially tops its stack on the left:

So with but two trading days remaining in October, here now is our stratified Gold Structure by the month across these past dozen years.  As oft previously shown, now courtesy of the “Here We Go Again Dept.” we’ve Gold’s triple top which “is meant to be broken” as highlighted by the three Golden arrows.  Moreover, we’ve anticipated on occasion throughout this year’s missives that Gold shall record a fresh All-Time High in 2023:  obviously the momentum is there, barring a post-geo-political price retrenchment (as is the rule rather than the exception).  Nonetheless, let’s cue Elvis from back in ’60 with “It’s now or never…”:

Through these 10 months we’ve emphasized the importance of doing the math to get to the truth of such critical metrics as economic inputs, p/e calculations, and so forth.  And whilst nothing light can be made of the horrific Mid-East mayhem, as this past week unfolded a mathematical “challenge” shall we say “came to light” over at the United States Department of State.  Hat-tip ExecutiveGov which reported:  “The Department of State has issued an advisory cautioning United States citizens against travel to more than 200 countries amid rising geopolitical tensions and conflict.”   ‘Course, you can see where this is going, given (hat-tip Quora) stating:  “Today, there are 197 countries in the world…“  The bottom line here being:  if you’re in the States, you’re sorta stuck from going anywhere, nor beyond!  Best therefore not to squirm; rather stay firm and stuck in Gold!

Cheers!

 

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

27 October 2023 – 09:01 Central Euro Time

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The Bond is at present below its Neutral Zone for today, whilst above same are Copper, Oil and the Spoo; BEGOS Market’s volatility is mostly light. As tweeted (@deMeadvillePro) last evening, we’re finally seeing some “fear” in the Flow, the S&P 500 falling -1.2% yesterday, but its MoneyFlow regressed into S&P points was -2.4%; still, the Index for the present is “textbook oversold”, so perhaps some bounce to unwind that condition, followed then by lower levels sub-4000 (S&P at present is 4137). At Market Trends, the Swiss Franc’s “Baby Blues” have (in real-time) provisionally slipped below their +80% level, suggestive of lower prices near-term, which coincident with a Fed rate hike would further foster Dollar strength. Indeed ahead of next Wednesday’s FOMC Policy Statement, the Econ Baro’s incoming metrics for today include the “Fed-favoured” Core PCE Price Index along with the month’s Personal Income/Spending.

26 October 2023 – 09:03 Central Euro Time

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At present we’ve the Metals Triumvirate higher and the EuroCurrencies lower. Notably for the second straight session (to this point), both Gold and the Dollar are gaining, (“Gold plays no currency favourites”). The Spoo continues to work lower: as we’ve (yet) to see “fear” in the S&P’s MoneyFlow, (when otherwise Flow falls at a faster rate than the Index itself), this feels mildly reminiscent of the old so-called “Gentlemen’s Crash”, although hardly has price fallen nearly to any crash proportion. These next two days have key incoming metrics for the Econ Baro ahead of next Wednesday’s FOMC Policy Statement: today we await the first peek at Q3’s GDP, along with other reports including September’s Durable Orders and Pending Home Sales.

25 October 2023 – 09:07 Central Euro Time

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At present, all eight BEGOS Markets are within their respective Neutral Zones for today, and volatility is at best light. In looking at Market Rhythms on a 10-test basis, the most profitably consistent through yesterday are Silver’s 8hr Price Oscillator, 12hr MACD, 6hr Moneyflow and daily Parabolics, plus Oil’s 4hr Moneyflow, the Euro’s daily Moneyflow, and the Swiss Franc’s daily MACD. On a 24-test basis, the best is Gold’s 1hr Price Oscillator. By our S&P MoneyFlow page, we’ve still yet to detect any real fear, even as our “live” P/E (futs-adj’d) is now 36.9x. The Econ Baro gets its back-loaded week underway with September’s New Home Sales.

24 October 2023 – 09:02 Central Euro Time

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The Bond, Gold and Copper are at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light, save for Copper having already traced 67% of its EDTR (see Market Ranges). By Market Values we’ve Gold in (real-time) +107 points above its smooth valuation line. In tandem with the Dollar having weakened across the past two weeks, by Market Trends the linregs for Gold, Silver, the Euro and Swiss Franc all have rotated to positive; those for the other four BEGOS components remain negative. Yet Silver is still a laggard to Gold, the G/S ratio at 86x vs. the century-to-date average of 68x: as we from time-to-time quip in The Gold Update: “Don’t forget the Silver!”

23 October 2023 – 09:24 Central Euro Time

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Save for the Spoo, the other seven BEGOS Markets are in the red, all at present below their respective Neutral Zones for today; session volatility is pushing toward moderate. The Gold Update sees the yellow metal as remaining “range-bound” until the All-Time High (2089 vs. the current 1986) is eclipsed, (from which Gold then becomes “moon-bound”, ideally to its present Dollar debasement value of 3724). The Econ Baro is back-loaded this week from Wednesday on, key reports including Q3 GDP and the “Fed-favoured” Core PCE Index. And thus far, Q3 earnings by year-over-year comparison is relatively weak: mind our Earnings Season page.

The Gold Update: No. 727 – (21 October 2023) – “Gold: Range-Bound? Or Moon-Bound?”

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The Gold Update by Mark Mead Baillie — 727th Edition — Monte-Carlo — 21 October 2023 (published each Saturday) — www.deMeadville.com

“Gold:  Range-Bound?  Or Moon-Bound?“

Across the past 23 trading days (from 20 September) Gold traded per that date’s high of 1969 down -145 points (-7.4%) to 1824 (on 06 October) from which price then ascended +185 points (+10.1%) through yesterday (Friday) to as high as 2009 in settling out the week at 1993.

Further from the aptly-named “Short Memories Dept.” ’twas funny how the FinMedia and friends just two weeks ago were pronouncing the end of Gold as a viable source of wealth:  now ‘twould seem they can’t get enough of it.

Moreover as suggested in last week’s missive, for Gold’s weekly parabolic Short trend ’twas “Three strikes and yer out!”, as provisionally penned in Thursday’s Prescient Commentary.  And with the week having ended, that trend is now confirmed as Long per the fresh encircled blue dot:

So:  is Gold remaining range-bound?  Or is it finally moon-bound?  Let’s start with the former.

For the bazillionth time we postulate that “change is an illusion whereas price is the truth”.  Whilst the low-information, short-attention span, instant gratification crowd have recently been yanked to and fro through Gold’s plunge before its “Going to a Go-Go”–[Miracles, ’65], let’s focus on price, the truth to know. To wit: 

Today’s 1993 price also traded during 34 of the prior 168 weeks going all the way back to that ending 31 July 2020.  And as anyone who is paying attention knows, Gold’s infamous triple top (2089/2079/2085) has yet to be broken, (which they are meant to so do).  Thus until the next All-Time High is achieved, price remains range-bound, for 1993 today ain’t anything over which to bray “Olé!”  Here is price (i.e. “truth”) via the monthly candles from 2020-to-date, denoting the triple-top:

But what has not yet happened — and may not happen — is the usual Gold post-geo-political price spike decline.  As herein penned a week ago:  “…(to risk a terribly overused phrase) perhaps ‘it’s different this time’…”  With reference to the above-labeled “Mid-East Mayhem”, two brutal weeks have passed since the Hamas/Israël incursion, Gold having initially spiked as anticipated.  But given the typical historical time pattern of prior geo-political price spikes, now two full weeks hence, Gold has been void of retrenchment.  The most recent prior example was early on in the RUS/UKR war, Gold twice spiking in 2022 on both 24 February and 08 March … only to trade beneath the initial spike as swiftly as 16 March, even as the war worsened.  Not this time however as quite a number of bad actors fight for center stage in the “Who’s backing whom?” phase.

Recall too our citing Gold vis-à-vis its smooth valuation line per both the website’s Market Values and Gold pages.  Just prior to the Mid-East mayhem, price already was better than -115 points below valuation:  now ’tis +107 points above same per our next graphic.  (Note:  the valuation line compares Gold’s movement relative to those of the other primary Markets that comprise BEGOS, i.e. the Bond / Euro / Gold / Oil / S&P).  Yet should Gold not materially retract — and instead its All-Time High of 2089 be eclipsed — then ’twill be fair to say Gold is moon-bound:

 

“So how high then is the moon, mmb?“

Squire rhetorically knows the answer to his softball question, (thanks mate!).  Clearly moon-bound for Gold is to match its true Dollar debasement level, presently per the opening Gold Scoreboard at 3724.  To be sure, such journeys can seemingly take forever:  on 09 March 2012 that debasement level reached 2089; but such All-Time High for Gold was not achieved until better than eight years later on 07 August 2020.  As valued charter reader THR oft quips “Gold will make you old”, but ‘twould be folly not to anticipate 3724 … and beyond!  Or in the words of the Great Gleason:  “To the moon, Alice!”

As to the destination of the economy, net-net ’twasn’t a nice week of incoming metrics for the Econ Baro.  Some were improved, notably September’s Housing Starts and Industrial Production/Capacity Utilization.  Conversely, October’s National Association of Home Builders Index weakened as did the NY State Empire Index; the pace of September’s Retail Sales slowed as did that for both Building Permits and Existing Home Sales; the Conference Board’s (lagging) set of Leading Indicators turned even more negative; and Business Inventories for August backed up.  Nothing is easy.  Here’s the Baro:

Neither is it easy for the S&P, given both the geo-political climate and the Index’s ongoing overvaluation, our “live” price/earnings ratio settling the week at 36.2x.  And speaking of earnings, (or lack thereof), have you been following their Q3 season?  Specific to the S&P 500, 68 constituents have thus far reported:  just 34 (50%) of those bettered their bottom lines from a year ago.  More broadly?  ‘Tis worse:  with 134 companies’ (of some 1800 to eventually report) results in hand, just 44% have bettered.  Too as tweeted (@deMeadvillePro) this past Thursday, “Flow leads dough…” per our S&P MoneyFlow page depicting a more negative stance.

And again from the “They’re Just Figuring This Out Now? Dept.”, iconic ol’ Morgan Stanley finds U.S. Treasuries attractive at 5%.  (‘Course you readers of The Gold Update have known for months that the T-Bill’s been yielding at least 5% since 18 April.)  Oooh and this quick update:  the market capitalization of the S&P 500 per Friday’s settle is now down to $36.9T; but the liquid money supply (“M2”) of the U.S. is only $20.8T.  It doesn’t add up very well, does it?  No it doesn’t.

But ’tis adding up quite nicely for Gold as we next go to its two-panel display of daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  The baby blue dots of trend consistency have only just crossed above their 0% axis, suggesting the uptrend has more “Room to Move”–[Mayall, ’69] in spite of near-term technicals being somewhat stretched.  Thus given some natural price retraction, we can see the key underlying support levels as labeled in the Profile:

With the like drill for Silver, her “Baby Blues” (below left) are just on the threshold of turning positive whilst she exhibits a belly of Profile support (below right) in the upper 22s.  (More broadly, Silver’s weekly parabolic trend still is Short, whereas aforeshown Gold’s is now Long).  Nonetheless, Sister Silver is gaining that precious metal bid:

To sum up, ’twas a great week for Gold and a poor one both for equities and the StateSide Economic Barometer, the latter in the new week looking to the first peek of Q3 Gross Domestic Product and that “Fed-favoured” Core Personal Consumption Expenditures metric for September.

And with geo-politics continuing to dominate the airwaves whilst the lousy Q3 Earnings Season unfolds, one ought expect more of the same at least near-term, albeit liquid markets don’t move in a straight line.  But the “Baby Blues” at the website’s Market Trends page tend to keep one on the correct side of it all.

Indeed all-in-all — at least until Gold posts a new All-Time High above 2089 — we still see price as more range-bound than moon-bound.  But again, as Jackie points out to Alice:

 

Or as we time-to-time say:  “Tick tick tick goes the clock clock clock…”  Got your precious metals?

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

20 October 2023 – 08:53 Central Euro Time

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Per our tweet (@deMeadvillePro) last evening, “Flow leads dough…” as is now being depicted on the MoneyFlow page for the S&P 500; too, our notion of the Spoo attaining the 4500 level at least near-term (based on the upside reversal at Market Trends of the “Baby Blues” two weeks ago) is now nixed, even as the Spoo’s 21-day linreg trend has just turned positive; again, 4431 nears to clear for a run to 4500. Today at present, the Bond is above its Neutral Zone; both the Euro and Copper are below same, and BEGOS Markets volatility is mostly light, within the context of Market Ranges (EDTRs) having expanded. Gold’s EDTR is now 26 points, meaning that 2000+ is within range today; presently 1987, Gold’s nearest dominant Market Profile supporter is 1963. The Econ Baro is scheduled to close its week with September’s Treasury Budget.

19 October 2023 – 09:04 Central Euro Time

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Narrow ranges thus far characterize the BEGOS Markets: only the Bond is at present outside (below) its Neutral Zone for today, and volatility is notably light, the Bond with the widest EDTR tracing to this point (see Market Ranges) at just 37%. Gold’s weekly parabolic trend has provisionally flipped from Short to Long, (confirmation to come upon Friday’s settle); price, which just two weeks ago was better than -100 points below its smooth valuation line (see Market Ranges) is now (in real-time) 71 points above same. As for the Spoo, should the recent 4431 high not be eclipsed, our 4500 notion likely gets nixed. Incoming metrics for the Econ Baro include October’s Philly Fed Index plus September’s Existing Home Sales and Leading (i.e. “lagging”) Indicators.

18 October 2023 – 10:53 Central Euro Time

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The Metals Triumvirate and Oil are the BEGOS Markets’ leaders thus far, those four all at present above today’s Neutral Zones; below same is the Bond, and volatility is moderate. On a $/cac basis, Silver is the broadest mover, at present +$1725. At Market Trends, the Spoo’s “Baby Blues” appear poised to break above their 0% axis by week’s end: again from the week prior we’ve ruminated about the Spoo making a go for 4500, (the S&P’s vastly high “live” P/E of 38.3x notwithstanding). And per the Euro’s page, its best Market Rhythm — the daily MoneyFlow study — triggered a Long signal per yesterday’s open (1.05885). For the Econ Baro we’ve September’s Housing Starts/Permits; then late in the session comes the Fed’s Tan Tome for October.

17 October 2023 – 09:03 Central Euro Time

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‘Tis red across the board for the BEGOS Markets, notably with the Bond, Euro, Gold, Copper and Oil all at present below their respective Neutral Zones for today; volatility however is mostly light. On a $/cac change basis, Copper’s is the most at the moment, -$1,012. At Market Trends, whilst all eight components are still in negative linreg trends, all their “Baby Blues” are in ascent, meaning the trends’ downside consistencies are waning. By the Spoo’s Market Profile the most dominant resistor above present price (4394) is 4401. And Oil’s cac volume is rolling from November into December. For the Econ Baro we await October’s NAHB Housing Index, September’s Retail Sales and IndProd/CapUtil, and August’s Business Inventories.

16 October 2023 – 09:12 Central Euro Time

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We begin the week with both the Euro and Copper at present above today’s Neutral Zones; below same are the Bond, Gold and Silver. With respect to the yellow metal, note in the current edition of The Gold Update the “tease” as regards Friday’s “Hobson Close”; should Gold further dip, we see structural support in the 1898-1881 zone; as well, 1885 is a key Market Profile support apex for Gold. BEGOS Markets volatility is light-to-moderate. The Econ Baro’s busy week of 14 incoming metrics starts today with October’s NY State Empire Index. And mind our Earnings Season page with reports for Q3 picking up the pace as the week unfolds.

The Gold Update: No. 726 – (14 October 2023) – “Awakening to Gold”

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The Gold Update by Mark Mead Baillie — 726th Edition — Monte-Carlo — 14 October 2023 (published each Saturday) — www.deMeadville.com

“Awakening to Gold“

Now before we all get too excited out there about Gold having yesterday (Friday) posted its largest one-day net gain since 17 March by both percentage +3.4% and points +64, let us acknowledge that price is right where ’twas a mere 14 trading days ago on 26 September.  So in settling out the week at 1946, for you “three-week” price charters, Gold for said stint is essentially “unch”.  Or as we oft quip:  change is an illusion whereas price is the truth.  And at 1946:  truth = cheap.

Still, yesterday’s robust move was gratefully appreciated.  Save also for 17 March, Gold hadn’t had such a single session up move since a smattering of days when the 2020 COVID scare got underway (from 23 March – 09 April that year), prior to which was a +4.7% day’s net gain on 24 June 2016.  Too, in measuring the Gold futures by MoneyFlow (change x volume), yesterday’s inflow ranked third-best year-to-date.  (And further for those of you curiously scoring at home, yesterday’s +3.4% net Gold gain ranks 27th-best century-to-date, the most being +9.0% away back on 17 September 2008 upon ol’ Black Swanee’s song about everything else going wrong).

Impressively however, as we’ve pointed out over these many years, Gold — unlike other major markets –has a tendency to rise faster than it falls.  To wit:  most recently from high-to-low, price dropped -112 points in nine trading days (26 September – 06 October).  Yet from just Friday a week ago – i.e. six trading days — +123 points was price’s gain:  don’t miss the Gold Train!

‘Course by the benefits of debasement, foresight, and a new geo-political catalyst, Gold this past week “got off the schneid” in fast fashion.  To quickly encapsulate these three Gold positives:

► By debasement Gold remains ridiculously undervalued vis-à-vis the above Scoreboard; priced now at “the market is never wrong” level of 1946, ’tis nonetheless -48% below the Dollar debasement value of 3725, which given historical price-to-value reversion shall eventually be reached.

► By foresight as herein starkly charted a week ago, Gold vis-à-vis its smooth valuation line (per the website’s Market Values page) was “nearly -100 points ‘low’, historically an extreme that begs for reversion up to the mean”.  Moreover for four consecutive sessions (02-05 October) Gold settled at least -100 points below said line.  Now ’tis +39 points above it … reversion swiftly wins again.

► By geo-politics came the incursion into Israël whilst we were putting pen to paper at this time a week ago.  Obviously then followed — as anticipated by a material amount — Gold gapping higher at Sunday night’s open whilst the S&P futures gapped lower.

“But in the past, mmb, you’ve gone on about how geo-political price spikes then come all the way back down…“

We’ve detailed in prior missives examples of that typically being Gold’s case, Squire.  But (to risk a terribly overused phrase) perhaps “it’s different this time”, especially per the just cited realities of debasement and foresight, the wake-up catalyst now being geo-political.

The point is:  Gold has been priced way too low for way too long, pure and simple.  And as the Investing Age of Stoopid seemingly unravels, those paying attention may finally be awakening to Gold.

“And you read what Grantham said, eh mmb?“

Our good man Squire really is on a roll today.  Yes, we swerved past a Bloomy piece which teased “Jeremy Grantham Says No One Should Invest in the US“ (as culled from a FinMedia television interview).  And admittedly, we chuckled over the interviewee’s referring to the small-cap Russell 2000 as being replete with horribly high-debt “zombie” stocks.

But neither let us rule out the ongoing overvaluation of the large-cap S&P 500.  That “mightiest of the mighty” index still maintains many sky-high silly valuations, the “live” cap-weighted price/earnings ratio settling the week at 38.2x; (recall 10 years ago it being -33% lower at a still expensive 25.4x … scary).  

And do you remember how overvalued shares fared notably in ’87, ’02, and ’09?  To quote Jonathan Winters in the role of Lennie Pike:  “I hope you turn away … that you just look the other way” –[It’s a Mad, Mad, Mad, Mad World; United Artists, ’63].  For per yesterday’s settles, 101 of the 503 S&P constituents now have P/Es of 40.0x or more.  Repeat:  scary.  As for “fear”?  Yesterday the S&P netted a loss of -0.5% … but the MoneyFlow regressed into S&P points dropped -1.0%.  And as you website followers know, Flow leads dough.  Repeat:  “fear”.

‘Course as is Gold’s wont, it can benefit from the “fear” trade.  Oh to be sure, Gold’s weekly parabolic trend remains Short (as does that for Silver).  But in turning to Gold’s weekly bars from one year ago-to-date, such Short trend had a big chomp taken out of it per the rightmost bar.  As for the flip-to-Long level for the enusing week being 1968, ’tis well within Gold’s current “expected weekly trading range”, now 48 points.  Three strikes and out for the red-dotted Short trend?  Here’s the graphic:

Too, especially for those of you who’ve been with us across better than a decade, there’s the ol’ 300-day moving average for Gold.  Historically it typically marked significant support or resistance for Gold, although much of that “reliance” has since waned.  Still, if only by coincidence, in this next graphic of Gold’s daily closes for some dozen years, that average (in blue) shows as support per the rightmost price bounce.  And as usual, the “triple top” remains there for the taking should the investing world ever awaken to reality:

As to the reality of the StateSide economy, its “yo-yo-ing” has built in a somewhat positive slant from about mid-point (this past April)-to-date in our year-over-year view of the Economic Barometer:

Tell-tale signs of ongoing “Dollar strength” influenced the Baro’s incoming metrics as the week unfolded.  September’s Import Prices shrank whilst those for Export increased.  And inflation at both the wholesale and retail levels came in bit hotter than consensus expectation.  As for the consumer, The University of Michigan “Go Blue!” Sentiment Survey took quite a hit in declining from September’s 68.1 reading to only 63.0 for October, the third-largest monthly decline in the past 16 months.  Indeed, oh that “Dollar strength”, the “Dixie” recording its 11th up week of the past 13.  Yet if you query:  “How then can Gold have also gone up?”  Re-read last week’s piece.

Reading below into Gold’s two-panel graphic we see the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  Note that Gold’s “Baby Blues” of trend consistency are on the up move:  because they still are below the 0% axis, the trend mathematically remains down, however ’tis rotating toward turning positive.  And because Gold settled on its high price for the past two weeks, the present “white bar” is barely discernable at the top of the stack.  (Are those the Gold Shorts we hear yelling “Hobson close!  Hobson close!”?  Always a pleasure to have them take the other side of the trade):  

Next we’ve the like display for Silver, her daily bars at left and Profile at right.  Clearly her recent rally whilst robust visually appears a bit dwarfed vis-à-vis that for Gold.  Mais au contraire as Gold’s recent low-to-high gain is +6.7% whereas that for Silver is +10.3%.  Thus be thee not discouraged, Sister Silver!

We now close on a memorializing note for James E. Sinclair.

We were honoured to meet “Mr. Gold” in San Francisco some nine years ago on 15 November 2014.  Long-time readers of The Gold Update know ’tis infrequent that we read the fine writings of other Gold analysts (so as not to bias our own thinking and interpretation of data).  Jim was an exception with whom we occasionally corresponded, and he’d always reply.  And his thorough understanding of The Gold Story was rarely paralleled.  Thanks for the awakening, Jim.

In his memory, let’s indeed add a word to this moving ’73 Pink Floyd piece, his now resting at “The Great GOLD Gig in the Sky”:

 

Cheers to Jim!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

13 October 2023 – 08:58 Central Euro Time

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The Bond, Gold and Silver are at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is quite light. Even as equities struggled yesterday, there remains no “fear” for the S&P 500 per our cap-weighted MoneyFlow page. Further per our Market Trends page, the Spoo’s “Baby Blues” in real-time continue their ascent; our best Market Rhythm at present for the Spoo on a 10-test basis is its 6hr Moneyflow study; on a 24-test basis ’tis the daily Price Oscillator study. To wrap the week for the Econ Baro, September’s Treasury Budget has been moved to next week; however today we’ve the month’s Ex/Im Prices, plus October’s UofM Sentiment Survey.

12 October 2023 – 08:59 Central Euro Time

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Money is moving into the BEGOS Markets this morning: at present, the Bond, Euro, Swiss Franc, Gold, Silver and Copper all are above today’s Neutral Zones; otherwise, Oil and the Spoo are within same, and volatility is again light. At Market Trends, even as all eight components remain in linreg downtrends, respective “Baby Blues” are rising, (save those for Oil). Gold has significantly firmed on the geo-political bid, prior to which price was better than -100 points below its smooth valuation line (see Market Values): that reading in now real-time is just -19 points; whilst as noted the yellow metal tends to decline following geo-political price spikes, price already was overly low pre-event. More in this coming Saturday edition of The Gold Update. The Econ Baro awaits metrics including September’s CPI and the Treasury Budget (originally listed for yesterday).

11 October 2023 – 09:12 Central Euro Time

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Copper is the sole BEGOS Market at present outside (above) its Neutral Zone; session volatility is light. As tweeted (@deMeadvillePro) last night, the Spoo did confirm its “Baby Blues” (see Market Trends) moving above the key -80% axis, inferring high price levels: structurally there appears room to move near-term to 4500 (present price is 4393); ‘course as we regularly cite, fundamentally the S&P remains significantly overvalued, its “live” P/E at 38.8x. Gold has (yet) not returned to its pre-Middle East event level of the 1830s: typically such price retrenchments occur following geo-political price-spikes; current price is 1877. The Econ Baro looks to September’s PPI and the month’s Treasury Budget; late in the session we’ve the minutes from the FOMC’s 19-20 September meeting.

10 October 2023 – 09:08 Central Euro Time

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A whirl ’round day yesterday for the S&P, arguably getting a safe-haven bid given events in the Middle East; as well the S&P is now “textbook oversold” through 13 days and the MoneyFlow differential is still positive, indicative of “fear” remaining at bay; moreover at Market Trends, the Spoo’s “Baby Blues” are in real-time moving above their -80% level, indicative of further price rise near-term. For today at present, Gold, Copper and Oil are below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is light-to-moderate. And for the Econ Baro we await August’s Wholesale Inventories.

09 October 2023 – 08:58 Central Euro Time

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Expectedly, given the incursion in the Middle East, Gold gapped notably higher at last night’s open and the Spoo notably lower. The latter along along with the Euro are at present below today’s Neutral Zones, whilst above same are the Bond, Metals Triumvirate and Oil; BEGOS Markets’ volatility is moderate. The Gold Update looks to 1800 as support: whilst the geo-political event has given Gold the typical boost, history reminds us that such spikes tend to reverse themselves as the ensuing days unfold; still (in real-time) Gold now at 1865 is -66 points below its smooth valuation line (see Market Values). And of course broadly, Gold remains vastly undervalued by currency debasement and the S&P 500 vastly overvalued by unsupportive earnings.

The Gold Update: No. 725 – (07 October 2023) – “Gold Further Tanks; to the Dollar No Thanks”

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The Gold Update by Mark Mead Baillie — 725th Edition — Monte-Carlo — 07 October 2023 (published each Saturday) — www.deMeadville.com

“Gold Further Tanks; to the Dollar No Thanks“

“Well ya know, Gold is down because of Dollar strength…”

Oh good grief are we sick of hearing that.  Honest to Pete, knee-jerk “conventional wisdom” is hardly our investing indicator of choice, especially when it comes to owning Gold, which at this writing — in having settled out the week yesterday (Friday) at 1847 — is as cheap as can be.  More on that as we move forward.

But let’s begin by (again) debunking the notion of “Dollar strength”.  ‘Tis axiomatic that which is worth zero (“0”) — regardless of it being acceptably transacted in exchange for other currencies, goods and services — is at any price still worth “0”.  Further to our point — given we oft quip Gold plays no currency favourites — let’s point (►) to past periods (sampled from three-to-four months in duration) of positive correlative strength for both the Dollar and … oh say it ain’t so … Gold!  To wit:

► Just after the turn of the century (which for those of you who can do math began with 2001), the Dollar Index (“Dixie”) from 19 Feb ’01 to 21 May ’01 recorded a net gain of +6%:  Gold’s net gain for the identical stint was also +6%.

► How about in 2005:  from 29 Aug through 28 Nov, Dixie’s net was +7% and Gold’s was +12%.

► Then there were the FinCrisis throes of 2008:  from 08 Sep through 08 Dec both Dixie and Gold netted gains of +7%.  Are we having fun yet?

► Check out 2010:  from 01 Feb through 14 June whilst Dixie gained +7%, Gold nearly tripled same with +20%.  They say:  “No Way!” …  Way.

► Ah, then came infamous 2011:  from 27 Jun through 26 Sep Dixie’s net change was +6% … Gold’s was +9%.

► Three years hence from 27 Oct ’14 through 02 Feb ’15 Dixie netted +9% and Gold a still respectable +5%. 

► And similarly just last year in 2022 from 10 Jan through 25 Apr, Dixie gain a net +8% and Gold again a net +5%.

Thus to paraphrase the Johnny Paycheck tune from back in ’77, you can “Take this Dollar strength and shove it.”

Regardless, as we’ve emphasized, of late ’tis hardly just Gold being pinned down by the Dollar.  The primary BEGOS Markets (Bond / Euro / Gold / Oil / Spoo) have all — save somewhat for Oil until just these last few days — been on the skids.  The following picture depicts their percentage tracks from some three-months ago-to-date along with the green-dashed Dixie:

And amongst the selling, Gold was shoved lower for the third straight week, the 1824 low being revisited for the first time since 09 March.  So per the price tracks in the opening Gold Scoreboard, Gold today (1847) is lower than ’twas on this day three years ago (1936), even as the U.S money supply (“M2” basis) is +33% higher now than then ($15.6T –> $20.8T).  But the market never being wrong, Gold completed its second week of the fresh parabolic Short trend, here per our view of the weekly bars from one year ago-to-date:

Also as anticipated, Silver’s weekly parabolic trend is now Short.

“But are you resolved to ‘how low is low’ for Gold, mmb?“

A side-stepped question that duly warrants a studied answer, Squire.  That red line in the above graphic is precisely at the 1800 level, (one ought think another “planned” loading up point for the sovereigns).  As for an analysis in the vacuum of averaging:  Gold’s average points drop for the past 10 weekly parabolic Short trends from each confirmation is -101 points.  Therefore from the “confirmation price” of 1865 two weeks ago, a -101 downside would bring 1764.  Indeed the mid-to-upper 1700s were extremely price congestive throughout much of 2021.  Yet just this past March (left end of the red line) found Gold buyers coming to the fore.  Should that repeat — especially upon recognition that “Dollar strength” can be beat — this new Short trend can well end as short-lived.

“But even if the Fed raises again, mmb?“

Squire, ’tis starting to look like another Federal Open Market Committee vote to boost the cost of FedFunds come 01 November.  But again in expunging “conventional wisdom”, you along with many of our long-time valued readers already know Gold can get on the go even in times of rising interest rates, (see 2004-2006).  And as we regularly say, with the Gold Scoreboard valuation of 3725 today, price at 1847 is ever so cheap.

More to the point per the website’s Gold page, here next is the graphic of Gold’s daily closes from one year ago-to-date astride the smooth valuation line (born of price changes relative to those of the primary BEGOS Markets:  Bond / Euro / Gold / Oil / Spoo).  The lower panel is the difference between price and valuation, which per yesterday’s settle is nearly -100 points “low”, historically an extreme that begs for reversion up to the mean.  And now we learn of an incursion in Israël which can have geo-political price ramifications for Gold.  Either way, have we mentioned that Gold is cheap?  Indeed:

Not appearing so cheap of late is the thrust of the StateSide Economic Barometer.  In spite of the hand-wringing over a returning recession, the Econ Baro has been marching right up the road, albeit such apparent “growth” includes “inflated” data.  Recall on 28 September the final read of Q2 Gross Domestic Product incorporated a chain deflator implying 44.7% of growth was inflated vs. real.  Still, some fairly bold metrics boosted the Baro this past week, notably Labor’s Payrolls numbers for September (+48% over August), although ADP’s Employment data was 180° out-of-phase (-51%).  Too, August’s Factory Orders whirled ’round from shrinkage to expansion.  But on a scary note:  Consumer Credit — a key economic driver — actually shrank in August for the first time since the summer of 2020 when all were cowering under COVID.  (Prior to that, Consumer Credit hadn’t shrunk on a monthly basis since its July reading in 2012).  Are FedChair Powell and his trusty FOMC able to sleep?  Raise ’em and weep?  Here’s the Baro:

Specific to the markets, let’s now go ’round the horn for all eight BEGOS components.  Typically we reserve this view solely for our month-end editions of The Gold Update.  But with “Oh that Dollar strength!” ruling the roost, here we’ve the exceptional picture of each market’s grey diagonal trendline heading down across the past 21 trading days (one month) along with their respective baby blue dots of day-to-day trend consistency.  Indeed as we tweeted (@deMeadvillePro) this past Thursday with respect to Oil having already issued a Sell signal in the prior week, “Follow the blues, (you know the drill…)”:

And to specifically drill down into the precious metals, follows are their respective 10-day Market Profiles for Gold on the left and for Silver on the right.  Despite the recent selling, both metals at present exhibit trading support below current price (white bar), notably for Gold as labeled at 1834 and for Sister Silver in her 21.70-21.25 zone:

With Q3 Earnings Season underway and 10 metrics due for the Econ Baro in the new week, let’s wrap here with two notes from deMeadville’s vast array of departments.

First from the “Core No More? Dept.” we perused an interesting essay (hat-tip FI’s Todd Bliman) emphasing that the Federal Reserve evaluates inflation and the economy well beyond the oft-mentioned Core Personal Consumption Expenditures Price Index.  We (indeed one would assume all of us) agree, albeit the Core PCE month-in and month-out seems very closely aligned with the Fed’s 2% inflation goal.  Nevertheless, as hard-wired ad nauseum throughout the FOMC’s Policy Statements, they “…will continue to monitor the implications of incoming information for the economic outlook…” and oh baby as payrolls grow but consumers lie low, which way shall the Fed go?  The next Core PCE reading is three trading days prior to the next FOMC vote.

Second from the “They’re Just Figuring This Out Now? Dept.” (the popularity of which is growing by leaps and bounds), Dow Jones Newswires discovered this past week that “Rising Interest Rates Mean Deficits Finally Matter“.  Otherwise, who knew, right?  Moreover, does this (finally) threaten the ongoing Investing Age of Stoopid?  Stay tuned…

As to ongoing so-called “Dollar strength” ultimately getting shoved, we reprise Daryl Cagle’s oldie-but-goodie graphic given that ultimately 0 = 0:  So do stay with Gold and Silver!

 

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

06 October 2023 – 08:58 Central Euro Time

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The Eurocurrencies are the weak link thus far with both the Euro and Swiss Franc below today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light with September’s Payrolls data due (12:30 GMT). Oil having come off, all eight BEGOS components are now in negative 21-day linear regression downtrends. Specific to the S&P 500, there remains no sight of “fear” given the positive differentials of Index change vs. flow per our MoneyFlow page; too, by “textbook technicals”, the S&P stands as “oversold” through 11 trading days; ‘course, the big fundamental bug-a-boo remains the “live” P/E now 37.6 (futs adj’d real-time). In addition to Labor’s jobs data, the Econ Baro also awaits August’s Consumer Credit late in the sessdion.

05 October 2023 – 09:01 Central Euro Time

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With EDTRS (see Market Ranges) having ramped up of late, the BEGOS Markets are notably subdued this morning, all eight components at present within their respective Neutral Zones for today; volatility is light-to-moderate. As tweeted (@deMeadvillePro) last evening, Oil (the Market Trends sell signal via the “Baby Blues” having come 7 trading sessions ago on 26 September, albeit price initially zooming higher still into the 95s) has finally come off down into the 84s; price has thus finally returned to its smooth valuation line (see Market Values). As for Gold, currently 1836, ’tis (in real-time) -107 points below its smooth valuation line. Today’s incoming metrics for the Econ Baro include August’s Trade Deficit.

04 October 2023 – 09:05 Central Euro Time

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Red returns to the BEGOS Markets this morning for all eight components, only three of which are not at present below their Neutral Zones (Euro, Silver, Oil). Session volatility is again moderate to this time of day, and indeed by Market Ranges, EDTRs are (finally) turning upward toward more relatively “normal” levels across the last 12 months. By Market Rhythms: on a 10-test basis the Euro’s daily Moneyflow study is our most consistent, followed by Silver’s 12hr MACD and then again the Euro’s 4hr Parabolics; on a 24-test basis, the best of the bunch is Copper’s 1hr Parabolics. Mind our Earnings Season page as that for Q3 is underway. And for the Econ Baro today we’ve September’s ADP Employment along with the ISM(Svc) Index, plus August’s Factory Orders.

03 October 2023 – 09:02 Central Euro Time

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The gutting of Gold (1839) continues, the Dollar Index approaching its 107 handle, a level not seen since November 2021. However, Gold by Market Values is (in real-time) -115 points below its smooth valuation line, a fairly historical extreme: such prior deviation (per 01 July 2021) then found Gold move up by better than +200 points into the start of the 2022 RUS/UKR conflict, even as the Dollar strengthened across the same stint; (more on that in next Saturday’s edition of The Gold Update). At present, Gold is below today’s Neutral Zone, as are the Swiss Franc and Copper; none of the other BEGOS Markets are above same, and volatility is again moderate. At Market Trends, Oil’s “Baby Blues” are (in real-time) accelerating their drop: with the two recent daily lows in the 88s having been breached, the next structural low is 85.49. The Econ Baro is quiet today ahead of 10 metrics due tomorrow through Friday. And Q3 Earnings Season begins this morning.

02 October 2023 – 09:07 Central Euro Time

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The BEGOS Markets begin October on a mixed note. At present, we’ve the Bond, Gold and Silver below today’s Neutral Zones, whilst above same are the Swiss Franc, Copper and the Spoo; volatility is moderate. The Gold Update confirms the yellow metal’s weekly parabolic trend as having flipped to Short; and as anticiapted, such trend for Silver today has provisionally flipped as well to Short. Oil continues to flirt with its 90 handle: at Market Trends, Oil’s “Baby Blues” are slowly slipping lower; and at Market Values in real-time, Oil is +7.36 points above its smooth valuation line; price has not been below such line since 03 July, (price then 69.53 vs. today’s 91.24). The Econ Baro awaits September’s ISM(Mfg) Index and August’s Construction Spending.

The Gold Update: No. 724 – (30 September 2023) – “Gold Guillotiné !”

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The Gold Update by Mark Mead Baillie — 724th Edition — Monte-Carlo — 30 September 2023 (published each Saturday) — www.deMeadville.com

“Gold Guillotiné !“

We start by paraphrasing this oft-misquoted line from American TV icon Desi Arnaz:  “mmb, you’ve got some ‘splaining to do!”, even as our two previous missives entitled Gold as being “Technically Torturous” and “The Torture Continues”.  Following which — at precisely 13:40 GMT this past Wednesday — Gold succumbed to the guillotine in penetrating the week’s parabolic protection at 1905.2, provisionally flipping such trend from Long to Short, in turn confirming so with price settling yesterday (Friday) at 1865.  In fact, you may recall that such guillotining was presciently previewed in our prior missive’s graphic of Gold’s weekly bars.  And so it came to pass that 28 weeks of net gain for Gold are now gone, (albeit such trend for Silver is still barely Long, but likely shan’t be come Monday’s open).  Here’s the updated dual panel graphic:

“That’s a gruesome graphic there, mmb…”

Sadly so, Squire, wherein we see at left Gold’s red-encircled parabolic dot confirming such trend having swung from Long to Short, whilst at right Silver’s Long trend is but 8¢ from the end, the guillotine in top gear as the Dollar Revolution continues.

In reaching this past week to as high as 106.540, ’twas the best level for the Dollar Index since 30 November of a year ago, (Gold settling that day at 1783 … but let’s not go there).  Today at 105.870, the plucky buck is but -18% below its historical high of 129.050 upon its futures’ inception away back on 20 November 1985.  And were that gap to close, U.S. interest rates shall be far higher still, the FedFunds rate back then being 8.05% versus today’s 5.50%.

Yet that noted, just yesterday the Bureau of Economic Analysis reported the Federal Reserve’s favourite inflation gauge for August, the pace of the Core PCE Price Index coming in at a rather benign +0.1%, which annualized is well below the Fed’s +2.0% target.  Shall the Fed’s Open Market Committee therefore vote to again “pause” come their 01 November Policy Statement?

Regardless, as depicted above, Gold’s weekly parabolic Long trend never got off the pause button, was executed, and is now Short.  And recall when said Long trend began a month ago, we were looking toward a fresh All-Time High show.  Instead from Gold, out went the dough.  Here’s our updated table of Gold’s ten prior weekly parabolic Long trends, plus the latest’s zero result across the bottom.  As Sheriff J.W. Pepper said to the elephant in “The Man with the Golden Gun” –[Eon/UA, ’74]:  “Boy, you is ugly”:

Understandably, you now may well ask “So how low is low?”  There we shan’t go, save for some structural support from this 1865 level down to 1813 built in early March.  And whilst conventional wisdom points to “Dollar strength” as the yellow metal’s culprit, we again hearken back to a Gold truism:  that it plays no currency favourites.  Simply recall the 2010 six-month stint wherein from January through June the Dollar Index gained +10% and Gold +13%.  Boom!  It does happen.

Still since mid-year, Gold and its equities brethren have been pressured.  It being month-end, here’s our year-over-year view of those elements’ percentage tracks depicting the VanEck Vectors Gold Miners exchange-traded fund (GDX) +14%, Franco-Nevada (FNV) +13%, Gold itself along with Agnico Eagle Mines (AEM) +12%, the Global X Silver Miners exchange-traded fund (SIL) +3%, Pan American Silver (PAAS) -7%, and Newmont -12% (as we know encompassing acquisition costs).  But again from mid-way, this hardly is the happiest chart in the house:

Month-end also means bringing up our year-to-date standings of the BEGOS Markets.  And atop the stack for the first time in deplacing the S&P 500 to second spot is Oil.  Rounding out the podium is the Doggy Dollar, (although because ’tisn’t a BEGOS component, we can still say Gold is in third position).  Properly the cellar dweller is the Bond as the Year of the Yield continues:

Specific to the second-place S&P 500, clearly it struggled through the oft seasonally-challenged month of September.  But more importantly, are both Wall Street and the FinMedia finally waking up to valuation reality?  More on that in our closing paragraph(!)  As for economic reality, here’s the StateSide Econ Baro from one year ago-to-date, replete with its mega yo-yo swerves and curves:

“Yo, Joe!  Which way does it go?”  For this past week’s set of 12 incoming metrics, eight were worse period-over-period and one was “unch”, thus leaving just three that improved, including August growth in both Personal Income and Durable Orders.  But the month’s real stinker was Home Sales, both New and those listed as Pending.  And pity the poor Chicago Purchasing Managers Index:  its September reading of a paltry 44.1 marks the 13th consecutive month of regional economic contraction.  “Go Bears…”

Speaking of “Go” — save for Oil — going down through September was the continued direction for the balance of the BEGOS Markets, (as ’twas the case back on 12 August when we penned “Ain’t Just Gold Been Headin’ Down…”).  Nearly everything gets sapped during “Dollar strength”, but again its yield is decent, the three-month U.S. T-Bill paying an annualized 5.300% per yesterday’s settle.  And that’s risk-free dough, (even if DC is closed).  Either way, let’s go ’round the horn for all eight BEGOS components by their daily bars from one month ago-to-date, Oil being the sole market sporting a rising trendline, albeit its baby blue dots of trend consistency are weakening as we tweeted (@deMeadvillePro) earlier in the week:

As for the precious metals’ 10-day Market Profiles, obviously we find their respective present prices (the white bars for Gold below left and for Silver below right) down in le panier de la guillotine, the yellow metal alone having lopped off some -100 points in just eight days.  Within the overall Profiles, Gold’s high-to-low is -5.4% whilst that for Sister Silver is -7.3%.  

Again as ’tis month– indeed quarter –end, here we’ve the stratified view of Gold’s Structure per the past dozen years-to-date, its triple-top axiomatically waiting to break:

To close, per our aforementioned tease, here we go courtesy of the “Where Have You Been These Last Four Years? Dept.”

Regular readers know — and notably so since 2019 — we’ve been constantly concerned as to the overvalued state of equites, especially the S&P 500 Index as a whole.  Oft we’ve quipped that we’re in “The Investing Age of Stoopid” purely by doing the honest math to compute the S&P’s price/earnings ratio, presently 37.7x as opposed to the parroted, dumbed-down 24.5x believed by your broker, (who frankly today appears incapable of doing the math).  But that’s where we are now.  And as we herein have written ad nauseum through these recent years:  “…earnings are not supportive of price…”

Well here it comes… READY?

This past Wednesday the lightbulb finally illuminated in the children’s writing pool over at Barron’s, headlining their webpage “above the fold in bold” with:

“The Stock Market Has a Big Problem.  It’s Called Earnings.”

They’re just figuring this out now???

And yet when we view our MoneyFlow page for the S&P 500 — even during its current decline — true “fear” has yet to appear.
But what appears most appealing to us is Gold being priced today (1865) at just half its Dollar debasement value (3726) per our opening Gold Scoreboard.
Thus — precious metal guillotines and Dollar Revolution aside — in strolling along life’s path, what ought you have glowing in your vault?  Gold!

 

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

29 September 2023 – 09:09 Central Euro Time

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Following its fourth-consecutive down day, Gold is at present above its Neutral Zone as are Silver, Copper, the Euro and Swiss Franc; none of the other BEGOS Markets are below same, and volatility is moderate-to-robust, the white metal already having traded 108% of its EDTR (see Market Ranges). Oil, which yesterday traded its widest high-to-low range (-3.64 points) since 22 June, still finds its “Baby Blues” (see Market Trends) not having recovered their +80% level, (thus Tuesday night’s Sell signal remains intact if not over-ridden by prudent cash management): price yesterday reached to as high as 95.03 vs. the present 91.71; 90.50 continues as Market Profile support, followed somewhat structurally by the low 88s. Among today’s income metrics for the Econ Baro we’ve September’s Chi PMI, plus August’s Personal Income/Spending along with the Fed-favoured inflation gauge: the Core PCE Index.

28 September 2023 – 09:09 Central Euro Time

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Gold’s weekly parabolic trend has provisionally flipped from Long to Short, (as tweeted [@deMeadvillePro] last evening); more on this outlying exception in next Saturday’s edition of The Gold Update. Tweeted too was Oil’s breaking above its recent high (93.74) such that from a cash management perspective ’tis better to stand aside for the moment. At present, Silver is the sole BEGOS Market outside (below) today’s Neutral Zone: currently 22.70, should 22.32 trade, its weekly parabolic trend would also, like Gold, flip to Short. As for the S&P 500, its down-stint during these past two weeks has lacked “fear” as revealed our MoneyFlow page. Today’s metrics for the Econ Baro include August’s Pending Home Sales and the final read of Q2 GDP.

27 September 2023 – 09:06 Central Euro Time

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The BEGOS Markets are at present mixed: both the Swiss Franc and Gold are below their Neutral Zones, whilst above same are both the Bond and Oil; volatility is pushing toward moderate. Gold is a disappointment: trading to as low as 1913, should 1905.1 (precisely) trade, the weekly parabolic Long trend shall provisionally flip to Short. As for Oil, despite it being up today, its “Baby Blues” did confirm settling yesterday below their key +80% axis: the price area of 87 to 85 shows some degree of structural support, whilst nearer Market Profile support shows at 90.50; and by Market Values, Oil’s smooth valuation line (in real-time) is 83.19. The Econ Baro looks to August’s Durable Orders.

26 September 2023 – 09:10 Central Euro Time

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Red is the watchword for the BEGOS Markets, all of which at present are below their respective Neutral Zones for today. Session volatility is moderate across the board, which is refreshing given the otherwise narrower-than-average EDTRS (see Market Ranges). Oil (currently 88.69) has its real-time “Baby Blue” dot at +78%: if this provisional sub +80% level is confirmed by close, we look to lower price levels, just as was the case some five weeks ago, albeit the downside follow-through from that signal was muted; the average price follow-through of the four “Baby Blues” signals that have occurred from one year ago-to-date is 5.7 points, (which in that vacuum alone from here “suggests” the 83s, without regards for other measurings). The Econ Baro gets its week going with September’s Consumer Confidence and August’s New Home Sales.

25 September 2023 – 09:00 Central Euro Time

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The Bond begins its week on a down note, at present trading below today’s Neutral Zone; the balance of the BEGOS Markets are within same, and volatility is mostly light. The Gold Update points to price’s still not being able to get off the mat even as the weekly parabolic trend enters its fifth week of being Long. As for Oil (currently 90.58), its “Baby Blues” (in real-time) have further slipped to the +86% level as we continue to watch for the +80% level to be breached, toward then anticipating lower price levels; at Market Values, Oil is +7.85 points above its smooth valuation line. The Econ Baro looks to 12 incoming metrics for the week, (with none due today), notably featuring the Fed’s favoured inflation gauge of the Core PCE Index for August come Friday.

The Gold Update: No. 723 – (23 September 2023) – “Gold – The Torture Continues”

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The Gold Update by Mark Mead Baillie — 723rd Edition — Monte-Carlo — 23 September 2023 (published each Saturday) — www.deMeadville.com

“Gold – The Torture Continues“

On the heels of last week’s piece “Gold – Fundamentally Fabulous, Technically Torturous“, we’ve given consideration to some infamous tortures foisted upon mankind across the centuries.  And how well-documented they are!  The exasperating drips of the Chinese Water Torture… the exhausting torture of Sleep Deprivation… and (“Don’t say it!”) yet we must –> the excruciating endlessness of the Tickle Torture, (just to name a few).

But wait, there’s more!  Today ’tis the ever-exponential agony of the GPTT:  Gold Price Tease Torture!  “Oh please mother make it stop!” –[Linda Blair, ‘The Exorcist’, Warner Bros., ’73]

“Well, mmb, there’s also your ‘live’ p/e of the S&P still unsupportably high in the sky as everybody waits — in your own words — ‘for it to all go wrong’; that’s kinda torture too…”

So ’tis, Squire.  That price/earnings ratio now at 37.7x keeps clear-cut the case for a comprehensive S&P “correction”.  However, there’s a significant difference between the S&P 500 and Gold:  whereas the former is fully-engaged, the latter lingers unengaged.  Folks follow stocks; few follow Gold.  Going by Gallup as of this year, 61% of adult Americans own equities; going by “Gold IRA Guide” as of 2020, just 11% of adult Americans owned Gold.  And globally, Gold’s ownership has been cited as less than 1%.

Still for those of us is the Gold know, our so-called GPTT continues blow-by-blow.  For nary over a week ago, we were waving Gold’s flag to and fro. And as this past week did unfold, it appeared that Gold finally was on the go.  Gold having then settled at 1946, we wrote our song and dance — including in last Tuesday’s Prescient Commentary the anticipation of price reaching the mid-1970s — and come Tuesday the yellow metal had streaked up to 1969 … only to then give it all back and then some by reaching down to as low as 1933 come Thursday.

“Blame it on the Fed!“, they say.  “The Dollar’s soaring up!”, they say.  “Rates’ll never go down!”, they say.  Either way, Gold settled the week yesterday (Friday) at 1945 in netting a -1 point loss for the week after tracing therein a high-to-low range of -36 points.  “It’s torrr-orrr-turrre…”  –[The Cure, ’87].  And yet for both the yellow and white metals, the respective weekly parabolic trends remain Long per their rightmost four blue dots, with Silver actually bettering Gold for the week:

‘Course specific to the Federal Reserve — its Open Market Committee unanimously having voted to maintain the Bank’s Funds Rate in the 5.25%-5.50% target range — one’s take on it in large part is dependent upon one’s FinMedia source.  Post-Policy Statement and Powell Presser this past Wednesday, if sourcing from Dow Jones Newswires, one read that “Fed predicts ‘soft landing’ for the economy — low inflation and no recession.”  If instead sourcing from Bloomy, one read that “Stocks Fall as Yields Rise on Fed’s ‘Hawkish Skip’.”  So which is it?  Any wonder the precious metals are directionally confused?  Fortunately for them, the math will out.  To wit:

Per the opening Gold Scoreboard, albeit with price at a lowly 1945, valuation today is 3704, (i.e. +90% higher).  Moreover, if you love Sister Silver, here’s the fun part:  whilst settling the week at 23.82, given the century-to-date average Gold/Silver ratio being 67.7x, when applied to Gold’s valuation of 3704, that values Silver at 54.71!  130% higher!  “What’s in your vault?”  Nothing confusing there.

As to the StateSide economy, our Economic Barometer turned in a confusing week.  Just eight metrics arrived, the best being August’s increase in Building Permits, and the worst ironically being August’s Housing Starts.  Go figure, the Baro basically drawing a blank for the week:

As for the S&P (4320) -6.2% from its year-to-date high (4607 on 27 July) — or if you prefer -10.4% from its all-time high (4819 on 04 January 2022) — everyone wants to know “Why?“ The obviously answer (as we simply practice the otherwise archaic science of math) is that price vis-à-vis earnings is historically excessive.  The average p/e of the Top Ten cap-weighted S&P 500 constituents (AAPL, MSFT, AMZN, NVDA, TSLA, GOOGL, GOOG, META, LLY and UNH) right now is 51.5x.  Remember (ad nauseum) ol’ Jerome B. Cohen?  “…in bull markets the average level would be about 15 to 18 times earnings.”

Other answers as to “Why?“ may include it seasonally being September, considered the year’s notoriously worse stint.

Or that the S&P’s all-risk yield of 1.582% is absurd to abide given the risk-less U.S. three-month annualized T-Bill yield of 5.305%.

Or that ’tis better to get one’s money out of stocks given the market capitalization of the S&P 500 is now $37.7T versus a U.S. liquid “M2” money supply of just $20.7T.  Remember ol’ Egbert?  “Hey Mabel!  I sold some stock but the broker says they don’t actually have the money to pay us!”  That shan’t be good.

Or there’s the market overall pricing excess thanks to COVID and the Fed:  recall the S&P’s regression growth channel had said “pandemic” not occurred?  And further how the increase in the market capitalization of the S&P 500 equaled the monetary creation by the Fed to counter COVID?  Here’s that updated graphic:

‘Course, just as the S&P rocket-shot was fostered by the Fed’s monetary injection, the market has since been somewhat succumbing via the Fed’s monetary withdrawal (which commenced in the week ending 2 April a year ago).  Or in the words of Inspecteur Clouseau:  “Out with zee bad air [equities] and in with zee geuuud [yield]…”  And that’s quite a drop from today to the channel were the Fed to so drain…

However through it all, the precious metals remain torturously tepid.  Indeed were Charles Dickens around today to pen a book on Gold and Silver, ‘twould well be titled “Great Expectations, Part Deux”.  Or more realistically given our two-panel graphic with Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right, “What Expectations?”:

Silver as aforementioned is performing a tad better than Gold per the white metal’s like bars (below left) and Profile (below right).  At least she is adorned in her precious metal pinstripes rather than in her industrial metal jacket.  From her intraday low of 22.56 on 14 September she is now +5.6% higher, whereas Cousin Copper from his high a day later of 3.85 on 15 September is now -4.2% lower at 3.69.  Stay your pinstripes pursuit, Sister Silver!

Torturous as may be this read, this let’s close with a notable FinMedia musing from late in the week:  ’tis the notion that the Fed’s so-called “neutral rate” (i.e. inflation-adjusted lending rate) may have to naturally rise going forward.  We wonder if this is to cover for the Fed having creamed the Dollar — increasing its “M2” supply by +42% or some +$6.6T from March 2020 into April 2022.

And yet specific to the Dollar Index, it has nonetheless risen from March 2020 (then 98.05) to 105.29 today.  Either “the more there are, the more they’re worth” — else the offsetting currencies, substantively the €uro and ¥en — have been strained and puréed:  which of course is the case.  The €uro (that surprisingly has lasted more than four years) has gone from costing $1.104 in March 2020 to as low as $0.959 a year ago; (’tis today $1.068 as it now pays an interest rate).  But pity the poor ¥en!  From 107/$ in March 2020 to a vacation-worthy 146/$ today!

Cue Deep Purple from back in ’73 with  “My Woman from Tokyo” 

 

 Regardless of where your sun rises, when it comes to currency chaos, torturous as ’tis, where else would you rather be?  Gold and Silver obviously!

 

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

22 September 2023 – 09:05 Central Euro Time

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Our Metals Triumvirate, Oil and the Spoo are all at present above their respective Neutral Zones for today; none of the other BEGOS Markets are below same, and volatility is mostly light, (save for the Yen, which whilst not yet a formal BEGOS component, has traced 102% of its EDTR by our Market Ranges calculation). Yesterday’s selling in the S&P did not exhibit “fear” such as to drive the MoneyFlow differential lower; still by historical standards, the “live” p/e of the S&P remains excessively high, the futs-adj’d read now 37.3x. We continue to mind Oil (currently 90.19) and notably its “Baby Blues” (see Market Trends) which in real-time are at +89%: below +80% would make us anticipative of further near-term selling.

21 September 2023 – 09:04 Central Euro Time

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Post-Fed we’ve Oil as the sole BEGOS Market at present below today’s Neutral Zone; the balance of the bunch are within same, and volatility is light-to-moderate. The FOMC’s Policy Statement was fairly as expected: a key Fed metric for which to watch is the 29 September release of August’s Core PCE Index. Oil’s “Baby Blues” have (in real-time) kinked lower for the first time since 29 August: once below their +80% axis we can make a guesstimate as to near-term downside price distance; even by Market Values, Oil still is better than +6 points above tis smooth valuation line. The Econ Baro wraps its week today with metrics including September’s Philly Fed Index, August’s Leading (i.e. “lagging”) Indicators and Existing Home Sales, plus Q2’s Current Account Deficit.

20 September 2023 – 09:12 Central Euro Time

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Oil is trading below 90 (89.65) for the first time this week: it is the only BEGOS Market at present outside of today’s Neutral Zone; by Oil’s Market Profile, trading supports show at 88.40, then 86.90-86.40; and by Market Rhythms, Oil’s 6hr and 1hr Parabolics have of late provided attractive swung consistency on a 10-test basis. The compression in the EuroCurrencies is such (see both Market Profiles and Market Ranges) that we anticipate range breaking open in the wake of today’s FOMC Policy Statement: the consensus is for the Fed to stand pat; ramped up inflation (both retail and wholesale) can support a FedFunds increase, however housing data has sufficiently weakened per this week’s reports, (NAHB, HousingStarts/Permits).

19 September 2023 – 09:09 Central Euro Time

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Gold and Copper are at present below today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is again light. As highlighted in the current edition of the Gold Update, the yellow metal has confirmed its 12hr MACD crossing from Short to Long such that we’re seeking the mid-1970s near-term (current price is 1952). Looking at the best of our Market Rhythms on a 10-test swing basis, topping the stack for consistency are Silver’s 6hr Parabolics, the Euro’s daily MoneyFlow, and Gold’s 2hr MoneyFlow. Oil’s deviation from its smooth valuation line (See Market Values) is +10.64 points ((in real-time with price at 91.16); ’tis the most extreme deviation in at least a year. The final data due for the Econ Baro ahead of tomorrow’s FOMC Policy Statement is today’s reports for Housing Starts/Permits in August.

18 September 2023 – 09:03 Central Euro Time

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The Swiss Franc, Metals Triumvirate and Oil are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same to start the week, and volatility is light. The Gold Update acknowledges the rather precarious start to the precious metals’ parabolic Long trends which (still intact) commenced two weeks ago; however, both Gold and Silver have been getting a bit of a bid since Friday; see too Gold’s MACD on its 12hr candles — our best Market Rhythm for the yellow metal at present — per our Gold page itself. With Wednesday’s FOMC Policy Statement in mind (a rate raise wouldn’t surprise us), the Econ Baro faces a moderate pace of incoming metrics this week, including September’s NAHB Housing Index due today.

The Gold Update: No. 722 – (16 September 2023) – “Gold – Fundamentally Fabulous, Technically Torturous”

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The Gold Update by Mark Mead Baillie — 722nd Edition — Monte-Carlo — 16 September 2023 (published each Saturday) — www.deMeadville.com

“Gold – Fundamentally Fabulous, Technically Torturous“

Firstly:  Gold is fundamentally fabulous given its ultimate valuation is a function of currency debasement.  Hardly is that news to our veteran readership, nor to anyone who fully comprehends The Gold Story.  So let’s just briefly break down the ultimate effect of valuation on Gold with three bullets:

  • Gold settled this past week yesterday (Friday) at 1946; per the opening Gold Scoreboard, valuation is 3706; Gold is thus presently priced at but 53% of its valuation;
  • Gold’s highest level of valuation-to-date is 4031 (per the week ending 15 April ’22), with price concurrently at 1977; obviously since then, the Federal Reserve has been “rebasing” the money supply (“M2” from $22.1T to now $20.7T, or -6.3%);
  • Gold’s price — whilst typically lagging valuation — eventually ascends to past high valuation levels; Price’s All-Time High of 2089 (on 07 August 2020) matched the valuation high of 2089 achieved eight years earlier (as of 24 July 2012).

Thus ’tis fundamentally fabulous to know there is so much higher for Gold — dare we say “automatically” — to go.  Precisely put, Gold’s price today so relatively inexpensive, ’tis akin to Roger Moore opting for “player’s privilege” in rolling Louis Jourdan’s lucky backgammon dice:  “It’s all in the wrist … double sixes … fancy that.”  –[Octopussy, Eon-MGM/UA, ’83]

“Yet if I can play devil’s advocate, mmb, Gold is just not popular anymore…“

Your “Yet“ is the operative word there, Squire:  merely move it to the end of your sentence in replacing the word “anymore“.  Moreover as recently penned, Gold’s popularity amongst the so-call “sovereigns” remains substantive.  When including Gold as a currency (albeit this data is six years in arrears per the World Gold Council), it reportedly makes up better than 50% of foreign reserves belonging to Austria, France, Germany, Greece, Italy, The Netherlands, Portugal, The United States, and (again per six years ago) Venezuela.

But as the Investing Age of Stoopid rolls along, “The Herd” don’t want yield-less Gold.  Rather, their preference is to be all-in with equities, even if earnings-less.  “No, we gotta own Nvidia ya know [p/e 105x]… “No, we gotta own Amazon ya know [p/e 110x]… “No, we gotta own Salesforce ya know [p/e 133x]…”  That’s just a few of the 25 S&P 500 constituents with price/earnings ratios currently in excess of 100x.  As for the total market capitalization of the S&P now priced at 4450?  $38.9T.  The aforementioned liquid money supply (“M2”) of the US?  $20.7T.  Sleeping well?  Got Gold?  Admittedly that said…

Secondly:  Gold is Technically Torturous given its performance since the weekly parabolic trend flipped from Short to Long two weeks ago.  “Long” means “Up”, not “Down”.  But the latter has been Gold’s state from settling at 1966 since starting September, from which price has been as low as 1922 (-2.2%).  Worse for Silver after settling 01 September at 24.55, she has since succumbed to as low as 22.56 (-8.1%).  Torturous indeed!  That stated, both precious metals are still clinging (precariously) to their respective weekly parabolic Long trends as we see here from one year ago-to-date:

At least by each rightmost respective bar, Gold and Silver got bids into week’s end to close well off those noted lows.  And to stick with this technical treatise — torturous as ’tis — we’ve a near-term Gold study that bodes well for higher prices.  In reviewing the week’s ending data runs, from the website’s Market Rhythms page up popped a pending positive crossover for Gold’s 12-hour MACD (“moving average convergence divergence” … which for you WestPalmBeachers down there is a very popular market-following study).  Here’s the graphic of Gold from mid-year-to-date in 12-hour units with the MACD’s blue line poised to cross above its red line, visibly-viewed by the trading community as indicative of higher price levels in the offing:

‘Course, has this signal been performing well?  In order to qualify for our Market Rhythms page, various criteria must be met.  And specific to Gold’s 12-hour MACD:  across the past ten signals (since 03 May — Gold then 2082 — in perpetually swinging from Long-to-Short-to-Long-etc.) has been complied a pure-swing bi-directional gain of 159 points with an “average maximum” gain per swing of 48 points.  Just in case you’re scoring at home.  The point is:  should this next up swing confirm, we’d expect it to help Gold get back on its broader parabolic up track.

Speaking of “up track”, have you been following that of the StateSide Economic Barometer?  Nothing recessionary there:

Highlighting the past week’s streak of 15 incoming Econ Baro metrics was August’s Capacity Utilization, the 79.7% reading ranking as second highest across the past 10 months, whilst Retail Sales increased their growth to +0.6% from July’s +0.5% pace.  Too, September’s New York State Empire Index — which was largely negative throughout 2022 into 2023 — posted its fourth positive reading of the past six months.

Therein, the bogeyman of the bunch was ramped-up inflation which falsely feeds into economic “growth”.  At both the retail and wholesale levels, August headline inflation (which acknowledges that you eat and drive) more than doubled their July paces.  But is Mr. Bogey frightening Wall Street’s children?  Going by our Moneyflow page, we’ve yet to see “fear” in the S&P 500, (note again that adverb’s emphasis).  But with our “live” p/e of the S&P at an honestly-calculated 39.6x, “tick, tick, tick goes the clock, clock, clock…”

And to be sure, the rising price of Oil is nurturing numbers higher as it inflates its way through the economic system.  Here we’ve the percentage tracks of the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P) across the past 21 trading days (one month).  “Somebody stop that Oil!”:

As for the precious metals from three months ago-to-date, here next we’ve their daily bars along with those “Baby Blues” that depict the consistency of the evolving 21-day linear regression trend.  For both Gold on the left and Silver on the right, the baby blue dots are falling, which does not lend well to price’s firming and turning higher.  Still, the rightmost bar in each case is indicative of buying interest, which beneath the umbrella of the weekly parabolic Long trend — plus the aforeshown pending MACD positive cross — can combine to  “Turn the beat around…”  –[Vicki Sue Robinson, ’76]:

To the 10-day Market Profiles we go for Gold (below left) and for Silver (below right).  Their both having departed basement residency from the past two weeks enhances the (hopefully) supportive aspects for the yellow metal’s 1932-1952 zone and the white metal’s denoted 23.40 level:

Time to wrap with the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3706
Gold’s All-Time Intra-Day High: 2089 (07 August 2020)
2023’s High: 2085 (04 May)
Gold’s All-Time Closing High: 2075 (06 August 2020)
Trading Resistance: 1952 / 1964
Gold Currently: 1946, (expected daily trading range [“EDTR”]: 16 points)
10-Session “volume-weighted” average price magnet: here at 1946
Trading Support: here at 1946, then 1942 / 1932
10-Session directional range: down to 1922 (from 1980) = -58 points or -2.9%
The Weekly Parabolic Price to flip Short: 1904
The Gateway to 2000: 1900+
The 300-Day Moving Average: 1859 and rising
2023’s Low: 1811 (28 February)
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

If all this weren’t exciting enough, wait:  there’s more!  Wednesday (20 September) brings the next Policy Statement from the Federal Open Market Committee.  Sense across the spectrum has been the Fed shall “pause” as it recently did two Statements ago (14 June) before again raising last time ’round (26 July), as just did the European Central Bank.  So with August inflation having notably picked up the pace, this time appears more of a “Crapshoot” –[Moriarty, ’16], albeit we think the Fed shall make the raise.  Alors, on verra mes chers amis!  In the meantime, survive the torture toward achieving the fabulous:  stay with Gold and Silver if you please!


Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

15 September 2023 – 08:54 Central Euro Time

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Contrary to this time yesterday, the precious metals are getting a deserved boost with both Gold and Silver at present above today’s Neutral Zones, as are both Copper and the Euro; the latter along with the Swiss Franc see their cac volumes rolling today from September into December. Session volatility is again moderate-to-robust, notably for the metals. At Market Values, Oil finds itself (in real-time) +9.49 points above the smooth valuation line; the Euro is -3 full points below same, even as the ECB moved to a record-high rate stance yesterday. ‘Tis a busy day for the Econ-Baro with September’s NY State Empire Index and UofM Sentiment, plus August’s IndProd/CapUtil and Ex/Im Prices.

14 September 2023 – 09:15 Central Euro Time

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The precious metals continue to weaken, albeit their relatively fresh weekly parabolic trends remain Long: Silver at present is below today’s Neutral Zone; Copper is above same, and volatility is moderate-to-robust, Silver having already traced 104% of its EDTR (see Market Ranges). Much is being made ado about the increase in August’s CPI, albeit the headline number (+0.6%) matched the consensus expectation, and moreover as we pointed out a month ago, July’s PPI (which tends to lead the CPI a month out) already had popped. August’s PPI is due today for the Econ Baro, along with other metrics including the month’s Retail Sales and July’s Business inventories. The FOMC’s next Policy Statement is Wednesday (20 September).

13 September 2023 – 09:09 Central Euro Time

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Both Gold and Silver are at present below today’s Neutral Zones; the precious metals have been struggling these past two weeks, even as their respective weekly parabolic trends have both flipped from Short to Long, (as detailed in the current edition of The Gold Update). The balance of the BEGOS Markets are with their Neutral Zones, and volatility is again light-to-moderate. Oil remains up, now better than +8 points above its smooth valuation line (see Market Values) and settling last evening +3.55 points above its Market Magnet, both fairly high readings. The Econ Baro looks to August’s CPI and Treasury Budget.

12 September 2023 – 09:10 Central Euro Time

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At present, the Euro is the only BEGOS Market outside (below) its Neutral Zone for today; session volatility is mostly light. As tweeted (@deMeadvillePro) last Thursday and reprised in the current edition of The Gold Update, Market Ranges (with the exception of the Spoo) have noticeably narrowed of late, such as to give thought for expansive moves in the near-term balance, (especially it being the September/October period): tis well worth minding the Market Ranges page, certainly so when considering prudent cash management. At Market Rhythms, our most consistent on a 10-test swing basis is again the Euro’s daily MoneyFlow study; on a 24-test swing basis, the best of the bunch is the Bond’s 2hr Price Oscillator. The Econ Baro remains quiet with both retail and wholesale inflation data due in the ensuing two days.

11 September 2023 – 09:01 Central Euro Time

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The BEGOS Markets begin the week with a “boom”: at present, six of the eight components are above their respective Neutral Zones for today; the two exceptions are Oil (within same) and the Bond (below same); volatility even early on is moderate-to-robust. Cac volume for the Spoo is rolling from September into December with 49 points of additional premium given the higher interest rate environment; “fair value” in toto is thus 53 points for today. The Gold Update emphasizes the precious metals needing to get swiftly off the mat following last week’s declines, even as the weekly parabolic trends for both Gold and Silver remain newly Long. The “live” P/E (40.1x) for the S&P 500 has reverted to its lifetime mean (since 2013; see too the closing graphic in The Gold Update). Whilst a busy week of 15 incoming metrics for the Econ Baro, none come due until Wednesday.

The Gold Update: No. 721 – (09 September 2023) – “Gold’s All-Time High Drive Departs With a Dive”

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The Gold Update by Mark Mead Baillie — 721st Edition — Monte-Carlo — 09 September 2023 (published each Saturday) — www.deMeadville.com

“Gold’s All-Time High Drive Departs With a Dive“

Quite the inauspicious start for Gold’s fresh parabolic Long trend as otherwise herein detailed a week ago.  Indeed then we were all megaphones and pom-poms about Gold now being en route to a new All-Time High … and we’re still in that camp even though the drive to such high has commenced with a dive.

For having settled a week ago at 1966 in confirming the new up trend — and historically backed by the strength to surpass the present All-Time High (2089 on 07 August 2020) as we ascend — Gold instead this week fell to as low as 1940 toward settling yesterday (Friday) at 1943.  Fortunately, ’tis not the end.  

Further, this Gold uptrend remains intact, as does same for Silver.  So let’s straightaway go to the two-panel chart of the precious metals’ weekly bars from one year ago-to-date with their respective parabolic trends in stride:

The optimistic news is that both the yellow and silver metals exhibit their rightmost two blue dots of fresh Long trend.  The pessimistic news is that the margin for error — i.e. trend reversal — admittedly appears tight.  Gold’s present distance from here (1943) to the flip-to-Short price (1902) is -41 points, which given Gold’s expected weekly trading range of 44 points is within a vulnerable distance.  Similar is the case for Silver (currently 23.20) with her flip price just -1.00 point lower at 22.20; her EWTR?  1.32 points.  Hang in there Sister Silver!

“But obviously you’re still bullish for higher Gold from here, eh, mmb?“

Would we otherwise be writing, dear Squire?  Or to quote one JP from our Investors Roundtable:  “The trend is your friend until it reaches the bend.”  Moreover as cited a week ago in asking “How high is high?”, recall that Gold’s “maximum average” price follow-through per the prior 10 weekly parabolic Long trends is +11.1%.   Thus again strictly in that vacuum, we’d see Gold 2184 on this run, eclipsing the still standing 2089 All-Time High by nearly +100 points.  Here’s such historical table of positive percentage MaxGain follow-throughs:

“But if I may interject again, mmb, four of those last six ‘MaxGains’ have been less than +5%…“

Duly noted, Squire.  Yet if we instead employ the weighted-average method, the “perfect world” MaxGain comes to +9.1%, which from that starting 1966 level still sets Gold for a new All-Time High at 2145.  Either way, next week is important for the precious metals’ ascent to resume.  Else these fresh uptrends face parabolic busts.

Too, we’ve another oft-overlooked analytical note:  have you been following our Markets Ranges page?  As we tweeted (@deMeadvillePro) this past Thursday night:  “…Market Ranges becoming unusually narrow (save for that of the Spoo); may portend Big Moves ahead for the BEGOS Markets; have a look…”  

Indeed for the month of September — wherein by conventional wisdom “it all goes wrong” — scant little has yet to happen, especially with respect to the precious metals in terms of day-to-day ranginess.  Below on the left we’ve Gold’s “expected daily trading range” from one year ago-to-date; (for you WestPalmBeachers down there, this is not the price of Gold; rather ’tis how many points we expect Gold shall trade between its next day high and low).  And the number “16” in the Gold box is as narrow an expected points range as we’ve seen in better than a year.  Similarly on the right is the case for Sister Silver now with her 0.50 points expectation.  ‘Tis said “Traders love volatility”, a condition rather absent of late.  This is why understanding potential price movement from day-to-day is critical to cash management.  Here’s the graphic:

‘Course, cash management has become a crap-shoot if investing via the StateSide trendless economy.  “It’s up … no wait … it’s down … no wait … it’s ad nauseum…”  Or as crooned by The Moody Blues: “School taught one and one is two.  But by now, that answer just ain’t true…“ –[‘Ride My See-Saw’, ’68].  

Too, there’s the standard verbage in the Policy Statements from the Federal Open Market Committee that it “will continue to monitor the implications of incoming information for the economic outlook”.  Is it any wonder ongoing FedSpeak is so vague?  Can you make heads or tails of it all?  “In Search of the Lost Chord” indeed as we turn to the Economic Barometer:

And therein, we cite a notable number from this past week:  Consumer Credit as calculated by the Fed for July was just $10.4B, the third-lowest reading since the core of COVID 30 months prior.  Hitting the wall of the credit card limit?  That rising variable interest rate is a credit killer.

Regardless, President Biden’s economy is said to be just fine, thank you.  To wit these two headline doozies from Dow Jones Newswires as the past week unfolded:  “Resilient U.S. Economy Defies Expectations” and “Why Higher Unemployment Is Good News Now“  (Clearly the FinMedia summer interns are closing out their stints at high writing levels as they return to University).  Yet on this side of the pond, the EU’s leading economy — Germany — continues to falter.  Further ’round the globe, China’s exports continue to plummet … does that mean Walmart (WMT) shan’t have anything to sell?  Good grief…

Returning to Gold, ’twas a week of grief as told, made graphically bold in the graphic below:  to the left we’ve Gold’s daily bars from three months ago-to-date, this past week not looking so great.  Still, the baby blue dots of trend consistency continue to climb.  And to the right, despite Gold’s plight, the most dominantly-traded price of the past two weeks — indeed the 1943 settle — has essentially held as support per the Market Profile’s fortnight:

As for poor ol’ Sister Silver, the like graphic is weaker, her “Baby Blues” at left having just turned tail, whilst her Market Profile at right finds price having taken quite the “THUD!”  Hopefully it shan’t leave a bruise…

Notwithstanding the precious metals needing a boost into the new week, we wrap this missive with “Breaking News”:

The long-sought reversion of our “live” price-earnings ratio to its mean has finally occurred.  And both elements of the fraction thereto contributed.  The “P” of the S&P 500 at 4457 is -7% below its all-time high (4819 on 04 January 2022).  And the Index’s “E” — which for Q2 grew year-over-year by +6% — was recently enhanced by post-earnings season power profits, notably from the large market capitalization likes of Nvidia (NVDA) and Berkshire Hathaway (BRK.B).  Indeed, those two companies by cap-weighting comprise 4.1% of the S&P 500’s total of 503 constituents.  Here’s our enhanced graphic, the green line having once again reverted to the red line:

So is that as low as the S&P shall go?  Per what we know:  no.  With our “live” P/E today at 39.9x, ’tis still a very strained distance above Bob Shiller’s CAPE, which in turn has yet to re-meet with the oft-parroted S&P/DJI version of “twenty-something”.  And should the economy recess and earnings not grow, a return to the “live” P/E’s low (25.4x in January 2013) means an S&P “correction” from here of -36%; (that’d be to 2852, just in case you’re scoring at home … and recall our musing earlier this year of an S&P sub-3000).  As well, the imputed S&P yield per the P/E ( 1 ÷ 39.9 ) is 2.507%; but the actual cap-weighted yield is only 1.537% … and yet the three-month annualized T-Bill yield is more than triple that at 5.293%, and ’tis risk-free!  Thus you can see where your money ought be.

But for security above and beyond risk-free we’ve the world’s best currency:  Gold!  Today’s 1943 level prices it at just 52% of its Dollar debasement valuation, which per the opening Gold Scoreboard’s calculation of 3709 even accounts for the increase in the supply of Gold itself.  And save for smart sovereigns, just because “nobody” owns Gold yet, do not be without!  Got Yours?


Never in a million years, Sweet Sister Silver!

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”):  @deMeadvillePro

08 September 2023 – 08:59 Central Euro Time

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A slightly weaker Dollar is giving the EuroCurrencies and Precious Metals a bid this morning, with the Euro, Swiss Franc, Gold and Silver all at present above their respective Neutral Zones; Copper is below same, and volatility is light-to-moderate. As tweeted (@deMeadvillePro) last evening, BEGOS Markets’ EDTRs (see Market Ranges) have really compressed of late (save for that of the Spoo) such that more substantive moves may be in the offing, (and of course ’tis September). Gold is flirting with Market Profile Support at 1942 (current price 1949). The Econ Baro concludes its week with July’s Wholesale Inventories and (late in the session) Consumer Credit.

07 September 2023 – 09:05 Central Euro Time

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At present, all eight BEGOS Markets are again within today’s respective Neutral Zones, and volatility is, in turn, light. Our “live” P/E of the S&P 500 (in fut’s-adj’d real-time) is below 40x (now 39.7x) for the first time since May; ‘course historically, this remains an extremely high level, as we’ve regularly said especially given risk-free three-month U.S. dough yielding 5.3% annualized. Whilst no material “fear” has yet to hit the S&P, there was a tinge of it yesterday as the MoneyFlow suggested an S&P drop of -1.0% vs. that of -0.7% for the Index itself; by Market Profiles, the Spoo’s most dominant overhead resistor is 4518, (price at present is 4458). Meanwhile for whirl-around Oil, price (87.26) is better than +7 points above its smooth valuation line (see Market Values). Included today for the Econ Baro are the revisions to Q2’s Productivity and Unit Labor Costs.

06 September 2023 – 09:02 Central Euro Time

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Quiet is the state of the BEGOS Markets at present: all eight components are within today’s Neutral Zones, and volatility is light. Gold’s drive to an All-Time High has begun with a dive, both the yellow and silver metals well off last week’s settles; by Market Profiles, for Gold (currently 1951) we’ve resistance at 1964 and 1972, with support at 1945 and 1932; for Silver (currently 23.83), Profile resistance shows at 24.60 and 25.00, (with no notable support this low is the Profile); of course, both metals have just commenced weekly parabolic Long trends such that we do not anticipate much downside relative to pending upside. Today’s Econ Baro awaits August’s ISM(Svc) Index and July’s Trade Deficit. And late in the session comes the Fed’s Tan Tome.

05 September 2023 – 10:04 Central Euro Time

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The second of the two-day session finds all eight BEGOS Markets in the red, and all (save for the Euro) at present below their respective Neutral Zones. Combining the two days, session volatility is moderate-to-robust, with both Silver and Copper having traced in excess of 100% of their EDTRs (see Market Ranges), Looking at Market Rhythms, on a 10-test swing basis our most consistent studies are Gold’s 2hr MoneyFlow, the Euro’s ongoing daily MoneyFlow, and Silver’s 8hr Parabolics; on a 24-test swing basis, our leader is the Bond’s 2hr Price Oscillator. For the primary BEGOS components, the best correlation is positive between the Euro and Gold. The Econ Baro looks to July’s Factory Orders.

04 September 2023 – 09:00 Central Euro Time

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We start the week with a safe-haven BEGOS Markets’ bid: at present both the Swiss Franc and Gold are above their respective Neutral Zones for today; Oil is below same, and volatility is light. The Gold Update points to an All-Time High route given the fresh new weekly parabolic trend and the typical percentage gains that historically ensue. At Market Values, we’ve Oil nearly +6 points above its smooth valuation line. And at Market Trends, both the Euro and Swiss Franc find their “Baby Blues” of trend consistency struggling to get off the floor, the Dollar Index during July moving from the 99s to now the 104s. The Econ Baro awaits 8 incoming metrics as the week unfolds. StateSide bourses are closed for Labor Day; thus the BEGOS Markets are in a two-day session for Tuesday settlement, with trading halts late Monday (today).

The Gold Update: No. 720 – (02 September 2023) – “Gold and Silver Finally Flip!  How High Might Be This Next Up Trip?”

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The Gold Update by Mark Mead Baillie — 720th Edition — Monte-Carlo — 02 September 2023 (published each Saturday) — www.deMeadville.com

“Gold and Silver Finally Flip!  How High Might Be This Next Up Trip?“

Thank goodness, THAT’S over.

“ ‘THAT’ being what, mmb? “

THAT, Squire, being the Short parabolic trend for both Gold and Silver having finally reached the end!  For as last week herein penned:

“As to the ‘when’ for these two precious metals’ Short trends to end … it is plausible one if not both precious metals’ weekly trends can be Long in a week’s time.  ‘Stay tuned to this channel for further developments…’“

Which as foretold by the Sibyl — here in the guise of the lovely Lady Fortuna — is exactly what came to pass as the week unfolded, Gold settling yesterday (Friday) at 1966 and Silver at 24.55.  ‘Tis a beautiful thing, their new weekly parabolic Long trends each heralded by its rightmost encircled fresh dot in blue:

‘Course the key question from here is:  “How high is high?”  Notwithstanding last Spring’s structural resistance (for Gold in the 2000-2100 range and for Silver in her 25-27 range), let’s recall “average maximum” price follow-throughs.  For Gold’s last 10 parabolic Long trends (dating back to September 2018), the average max upside upon Long trend confirmation is +11.1%:  thus in that vacuum from today’s 1966 level, to reach such “perfect world” average would bring an All-Time Record High of 2184.  Likewise for Sister Silver’s last 10 parabolic Long trends, (in her case dating back to  December 2018), the average max upside (as anticipatively noted a week ago) is +19.6%.  Such increase from today’s 24.55 price, would bring 29.36, a level not traded for Silver since 01 February 2021.

And for Silver, that’s still a far cry from her All-Time Record High of 49.82 on 25 April 2011, the Gold/Silver ratio on that day a mere 32.1x versus today’s 80.1x.  The century-to-date average of that ratio is now 67.7x.  Pricing Silver to that puts her at 29.04 … which is not far from the just-cited 29.39 potential upside follow-through per the new parabolic Long trend.  ‘Tis one of those things that happily makes you go “Hmmm…”

“Hmmm…” (not necessarily happily) also applies to the state of the Economic Barometer.  Hardly is it humming along, but neither is it sputtering to a stop.  From this past week’s load of 16 incoming metrics, 8 showed period-over-period improvement, 7 were worse, and arguably the most important of all the data points — Core Personal Consumption Expenditures — again came in at +0.2% (an annualized rate of +2.4%) for the month of July.  Such rate of this Federal Reserve-favoured inflation gauge means the Open Market Committee  — some say — shan’t further raise their Banks’ Funds Rate for the balance of the year.  On verra…

To look at the Econ Baro year-over-year, its net neutral state may argue that the Fed simply go to bed, i.e. “Everything’s great!”  Dow Jones Newswires just went on record with August’s StateSide jobs report as “near perfect”.  And as for equities, Bloomy concluded the week with “Stock Traders Get Back to Believing Everything is Just Perfect”.  Perfection abounds.  And why not?  Oh to be sure, risk-free three-month U.S. “no debt ceiling dough” settled the week at an annualized rate of 5.268%, whereas the “all-to-risk” S&P 500’s yield is a paltry 1.507%.  BUT:  it doesn’t matter for neither do earnings, our “live” price/earnings ratio for the S&P finishing the week at 40.6x, not quite double the S&P’s 66-year lifetime median ’round 23x.  (Best not to wreck everyone’s fun).

Regardless, here’s the Baro with the S&P 500 today at 4516, only -5.9% below its all-time closing high of 4797 from back on 03 January 2022:

So just as “The Sky’s the Limit!” for the S&P — clearly as ’twas in November 1980, August 1987, March 2000, October 2007, February 2020 and January 2022 (from which “corrections” then ranged from -25% to -58%) — ’tis no surprise that the mighty Index again tops our year-to-date standings of the BEGOS Markets with both Gold and Oil rounding out the podium, (albeit a distant second and third).  Note Silver’s seriously lagging percentage performance; hence the aforementioned G/S ratio still historically high at 80.1x:

Too, it being month-end plus a day, ’tis time to go ’round the horn for all eight BEGOS Market components across these past 21 trading days (one month) incorporating their diagonal grey regression trendlines and the baby blue dot depictions of such trends’ day-to-day consistency.  Notably therein is a most material move by Oil.  Indeed as we twice tweeted (@deMeadvillePro) during the week, Oil initially en route to the 75-72 zone then defied its “Baby Blues” with a great gusher into the highest weekly close (86.05) since that ending last 07 November (then 88.96).  As for Copper’s up gap, we can thank the price premium in rolling from the September to December cac:

As to Gold and several of the key precious metals’ equity offerings, let’s next look year-over-year at their respective percentage performance tracks.  From the bottom up, note that only Newmont (NEM) by this time frame is in the red, -5% as its weathers costs associated with acquiring Oz-based Newcrest Mining.  Then to the good we’ve Pan American Silver (PAAS) +9%, the Global X Silver Miners exchange-traded fund (SIL) +12%, Gold itself +14%, Agnico Eagle Mines (AEM) +17%, Franco-Nevada (FNV) +19%, and the VanEck Vectors Gold Miners exchange-traded fund (GDX) topping the stack at +22%, (although well off its May highs, as is the entirety of the bunch).  But all ought benefit in anticipating higher metals’ prices near-to-medium term as the new weekly parabolic Long trends kick into gear:

Meanwhile per the past fortnight, Gold’s Market Profile below left depicts trading support in the 1945-1942 zone, whilst Sister Silver below right has slipped a pip below her most dominantly-traded price of 24.60.  These of course shall wither away as higher levels come into play:

Toward closing, here’s our chart of the sedimentary Gold Structure by the month from a dozen years ago-to-date.  Gold’s present All-Time High of 2089 was established on 07 August 2020 as the response to COVID shut down the world.  Yet now that Gold has flipped to a brand-new weekly parabolic Long trend, as noted the typical average follow-through can well break the Triple Top into uncharted territory toward 2184.  And when viewed by the rightmost monthly bars, it makes the nattering nabobs of Gold negativism appear nonsensical:

Heaven forbid your being a precious metals naybob…

…for that’s where you ought put your bob:  into Gold and Silver!

Cheers!

…m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter:  @deMeadvillePro

01 September 2023 – 08:56 Central Euro Time

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September starts with Copper the sole BEGOS Market at present above its Neutral Zone for today; the balance of the bunch are within same, and volatility is light-to-moderate, Copper having thus far traced 69% of its EDTR (see Market Ranges). Oil — for which we’ve been seeking near-term the mid-to-low 70s — has whirled ’round upward, its “Baby Blues” (see Market Trends) also having reversed course back higher, (albeit the 21-day LinReg trend itself still is negative): the Blues looked to lower price levels from 79.26 (16 August), however price since weakened to only 77.59: ’tis at present 83.79; the recent high from some three weeks ago is 84.89; dominant Market Profile support is now 80.00. The Econ Baro concludes its week with StateSide August Payrolls data and the ISM Index, plus July’s Construction Spending.