The Gold Update

The Gold Update: No. 805 – (19 April 2025) – “So if — as We’re Told — ‘Everybody’s’ Buying Gold…”

by

The Gold Update by Mark Mead Baillie — 805th Edition — Monte-Carlo — 19 April 2025 (published each Saturday) — www.deMeadville.com

“So if — as We’re Told — ‘Everybody’s’ Buying Gold…“

 
…does it not stand to reason that “Everybody’s” selling Gold?  After all, for every ounce bought, it must be sold to the buyer, non?  ‘Tis merely the agreed-upon hitting of available bids and offers that makes the price change.

But is such wise word to the Fin&Social/Media sufficient?  Likely, no.

Regardless, let’s go to Gold’s Moneyflow.  Similar to the website’s MoneyFlow graphics for the S&P 500, below we’ve regressed Gold’s Moneyflow into points such that it can be directly compared with the actual change in price.  To wit,  this three panel display (one week, one month, one quarter) wherein the green line is the cumulative points difference between Gold’s price change and its MoneyFlow:

“So what’s with that big dip there, mmb?  Because Gold is basically at a record high…”

Simple, Squire. Recall after Gold’s having settled at 3190 on 02 April came three robust rounds of selling, price then closing at 2999 on 07 April.  The “big dip” — as you put it — merely indicates that the amount of money by points regression which flowed out of Gold hardly in full has flowed back in, even as price as risen to yet another All-Time High at 3372 this past Thursday, toward settling the abbreviated trading week at 3341.  In fact, across the past nine trading days (07 – 17 April), Gold’s day-over-day contract volume declined for six of them, (see too our closing graphic).

“Well, none of THAT was on FinTV, mmb…”

Nor would it be, Squire, given their WestPalmBeacher audience.  The point is:  MoneyFlow ultimately leads price.  And as you regular readers know, price at present remains technically well-extended above its BEGOS valuation line per this year-over-year graphic:

To be sure, “mis-valuation” — whether technical or fundamental — seems oft “forever” sustained in markets (a prime example being the S&P’s ongoing post-COVID extreme over-valuation).  Obviously, one cannot “will” price to be elsewhere.  For ’tis axiomatic that price itself net of its bids and offers is never wrong; Gold therefore by its weekly bars and parabolic trends from a year ago-to-date is ever right:

Gold’s All-Time Closing high was recorded this past Wednesday at 3358.  ‘Twas but half that at 1679 a mere 2.3 years ago as encircled in the following table of Gold’s closing price “doublings” since 1975, which was the first full year featuring Gold futures at the COMEX:

‘Course per the table’s footnote, Gold first achieved the 1679 closing level some 14 years ago on 08 August 2011.  That — for those of you scoring at home — means Gold was net “unch” after 11 years despite a harrowing route.

Veteran readers may remember back in 2011 our penning about price “having gotten ahead of itself”,  after which Gold was severely sold — indeed way oversold — to as low as 1047 on 17 December 2015.  ‘Twas exemplary of Gold’s trials and tribulations as it fell far behind the Dollar debasement curve, which is de facto the most acute tool to value the yellow metal per our opening Gold Scoreboard.

Fast-forward to today at 3341, Gold still is -13% below the Scoreboard’s value of 3833.  Assuming that flexing level is graphically eclipsed (and we’re still around), we’ll again write of Gold “having gotten ahead of itself”.  Certainly at present, the Gold hype is ripe with 4000 in sight … which likely means it shan’t get there anytime soon.  Again given Gold’s expected yearly trading range — and assuming the 2625 low (06 January) holds — 3400 may well be Gold’s top for this year should “TT” (“Trump Tariffs“) reach some accord and Europe not be sucked into war.

One wonders as well if the StateSide Economic Barometer has topped for the year.  ‘Tis speculated that “TT” are grinding the economy to a halt:  “You mean we gotta make our own stuff??  I just wanna stay at home with my phone!!”  (You tell ’em, Stoopid).

Further, there’s still evidence of inflation, disinflation, stagflation and now even deflation, the latter per Labor’s March data.  But wait, as we offer more confusion:  last week’s set of 13 incoming metrics for the Econ Baro found six having improved period-over-period, six having worsened, and one as “unch”.  Even those so-called six-figure “experts” are amiss:  their consensus for April’s Philly Fed Index was +10.0 … it came in at -26.4 … “Ooooh!”  Here’s the year-over-year view, wherein even “The Chair” perhaps is confused:

Note as well in the Baro our “live” Price/Earnings ratio for the S&P 500 is still a hair-raising 39.2x (summation of: current prices ÷ trailing 12-month earnings x capitalization weighting, wherein non-earners are assigned their price as P/E).  The good news is that Q1 Earnings Season — whilst still early with just 41 S&P constituents having thus far reported — recorded 73% as having improved year-over-year results, which is an above average pace.  The bad news is — as you’ve herein read a bazillion times — the overall level of earnings remains far too low to support price, the P/E ratio invariably reverting to its mean, especially given the S&P’s 1.462% yield versus the 4.205% annualized yield on risk-free 3-month U.S. Treasury Bills.

Far more broadly, if one can stomach the volatility, Gold also is risk-free.  Simply stated, the higher the amount of fiat dough, the higher Gold shall go.  Recall GEICO’s infamous quip:  “It’s so easy, a caveman can do it” … and according to archaeology evidence, they were Gold-aware away back in the BCs.

What we next find is Gold’s notably having outperformed Silver of late via the two-panel display of daily bars from three months ago-to-date for the yellow metal on the left and for the white metal on the right.  Last year from mid-May to mid-July, the Gold/Silver ratio basically resided in the 70s.  Today ’tis 102.7x, Sister Silver having yet again been led lower by cajoling Cousin Copper.  “For shame, young lady, for shame!”

Still, by their respective 10-day Market Profiles, Silver (below right) has managed to work higher, positioned therein quite similarly to that of Gold (below left).  And our sense is that Gold’s dominant volume supporter at the denoted 3237 price surely shall be tested in the new week:

To close it out, as earlier noted, Gold on Thursday reached an All-Time High of 3372, (indeed already +110 points above our year’s forecasted high of 3262).  Our being curious to see the FinMedia’s acknowledging of the fresh All-Time High, we went to three key website main pages:  Bloomy – no mention; Dow Jones Newswires: – no mention; CNBS – no mention.

Thus:  do pardon our forgetting that — at the end of the day — Gold remains an inert relic.  Or as ’tis said, “Nothing to see here” in this year-to-date chart of Gold, given every ounce bought must also be sold, (the “receding” volume, behold, per our MoneyFlow all told):

So, should Gold duly near-term flop, one ought fear not.  Rather:  be prepared to buy the drop!

Cheers!

…m…

The Gold Update: No. 804 – (12 April 2025) – “Gold Taps Our Year’s Forecast High of 3262”

by

The Gold Update by Mark Mead Baillie — 804th Edition — Monte-Carlo — 12 April 2025 (published each Saturday) — www.deMeadville.com

“Gold Taps Our Year’s Forecast High of 3262“

Yesterday (Friday) at 13:33 GMT, June Gold traded at 3262.  ‘Tis our forecast high for this year as selected at New Year, and completes the triad of our three Golden Goals for 2025.

As yesterday’s session further unfolded, Gold retrenched, but briefly then made it to a point higher still at 3263 — the new All-Time High — before settling the week at 3255.  And the five-day low-to-high run (2970-to-3263) of +9.9% was Gold’s best intra-week percentage gain since that ending 14 August 2020 when COVID covered the cosmos.

Yet on to “The Now” as straightaway we go to Gold’s weekly bars from a year ago-to-date, which look nothing but great, price having made it to 3262 plus that extra point as icing on the cake:

Given 2025’s eventual total of 252 trading days, Gold reached our forecasted 3262 in just 70 sessions, which for those of you scoring at home means 72% of the year is still in the balance.

Thus the obvious question begged is:  “Where Do We Go from Here?” –[Chicago, ’70].

Despite Gold having already achieved our upside goal, our call for getting there has been completely upside down.  En route to 3262, we’d anticipated Gold initially to pullback lower into the 2800s/2700s/2600s, even specifically to as low as 2507(!)  Instead through these first 15 weeks of 2025, just two have been down.  Such like stint hasn’t occurred since having penned the second edition of The Gold Update away back on 28 November 2009!

But to Pete Cetera’s above crooning question, remember our writing at New Year that “…applying the ‘expected yearly trading range’ method, the year’s low approximates … 2507.  Then would follow the ascent to [the] forecast high of 3262…”

Our good man Squire then later questioned:  “But mmb, what if the 2625 low is already in for this year?” to which we responded “…were that to turn out to be the case, then our forecast for a 3262 year’s high may be deemed in hindsight as modest.”

Similar was the case last year (for which we sought 2375, price then moving well beyond that to 2802).  And now year-to-date, the low of 2625 (06 January) remains in place.

And thus as just penned this past 22 March:  “…’IF‘ the low for this year is already in place … Gold has a shot at 3400 (or purely in the ‘expected yearly trading range’ equation, 3380), fundamentally supported by Federal Reserve interest rate cuts in concert with a slowing StateSide economy…”  Yep, no kiddin’, keep readin’.

However, one only gets one shot at a forecast; re-forecasting is verboten!  But given price’s present momentum, 3400 from here (+4.5%) seems a mere stone’s throw, barring it suddenly going all wrong for Gold.

That stated, the tug-of-war continues between Gold being technically near-term overbought vs. fundamentally broad-term undervalued.  The latter case is made evident by the opening Gold Scoreboard, price today (3255) being -15% below its Dollar debasement valuation of 3830.

But by our BEGOS Markets’ value method, the following year-over-year graphic of Gold vis-à-vis its smooth valuation line (2962) shows price presently as +293 points — i.e. +10% — too “HIGH”:

“So +293 points above value is pretty high, eh mmb?  Congrats on the call, by the way…”

Thanks Squire.  And indeed the current +293-point deviation is the second-highest century-to-date.  ‘Twas only higher by +311 points upon the then All-Time Closing Gold High of 1900 back on 22 August 2011, from which in two months Gold fell -15% (snowballing to a -44% fall per the end of 2015).  But more “recently” by percentage deviation, the last time ’twas by this much (+10%) was on 08 March 2022, after which price fell from 2058 to 1695 (-4.5%) come that year’s Bastille Day (14 July).

To be sure, if one labels “TT!” (“Trump Tariffs!”) as geopolitically Gold-boosting bedlam, price’s admirable rally is justifiable.  The Dollar Index just took quite a hit in sporting a weekly settle below 100 for the first time since that ending (believe it or not again) on Bastille Day 2023.  A Swiss Franc that day cost $1.1680 … today ’tis $1.2368.  Got Gold? Got Swiss??  Here’s the solid “Safe-Haven Two-Fer” that one cannot miss:  Miss Helvetia!

Such mirthful jubilation aside, you strident Gold aficionados well-understand what follows geopolitically-induced price spikes:  reversion to the mean.  Yes, we fully comprend that “It’s different this time” … ’tis always different this time … until ’tisn’t.  We thus remain sensitively wary for Gold’s price to be suddenly jerked into reverse.  Indeed such down stints have been lurking of late:  on each of 03, 04 and 07 April, Gold recorded intra-day declines of more than -100 points; they’ve just been lost in the sensationalized shuffle.

Shuffling down net-net since mid-February is the Economic Barometer.  Perhaps worse:  are we DEflating?  After all, the Bureau of Labor Statistics recording deflationary readings in three of its four key Price Indices for March:  the headline paces at both the Consumer and Producer levels were negative as was the latter’s core pace.  ‘Course the “Fed-favoured” paces of Personal Consumption Expenditures shan’t be released by the Bureau of Economic Analysis until 30 April.  But should negativity also therein lie, the Federal Open Market Committee surely shall cut their Bank’s Funds Rate per the 07 May Policy Statement.  Too, of the Baro’s nine incoming metrics this past week, just two were “positive”:  March’s Treasury Budget was less negative, and Wholesale Inventories for February were worked down.  So in going to the year-over-year picture, just as the stock market can be a hedge against inflation, so too can it be a broken dam to deflation as such ebbing tide lowers all boats:

Next we turn to trend consistency for the precious metals as measured by their baby blue dots.  Below for Gold on the left, despite price’s “mega-spike” of nearly +200 points for the past week, the “Baby Blues” have become a bit unglued; certainly so for Silver on the right, the aforeshown Gold/Silver ratio at present a whopping 101.1x:

Thus as we view the 10-day Market Profiles for the yellow metal (below left) and white metal (below right), ’tis not surprising to find Gold’s closing white bar near the top of the chart, whilst that for Silver is mid-range.  ‘Course the culprit there is Cousin Copper, the red metal within the past three weeks posting a high-to-low blow of -25% from 5.374 (26 March) to 4.030 (07 April).  Oh those “TT!”

Toward the wrap, here’s the stack:

The Gold Stack

Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3830
Gold’s All-Time Intra-Day High:  3263 (11 April 2025)
2025’s High:  3263 (11 April 2025)
10-Session directional range:  up to 3263 (from 2973) = +290 points or +9.8%
Gold’s All-Time Closing High:  3255 (11 April 2025)
Trading Resistance:  none by the Profile
Gold Currently:  3255, (expected daily trading range [“EDTR”]:  75 points)
Trading Support:  nearby 3247 and 3235, then 3160
10-Session “volume-weighted” average price magnet:  3116
The Weekly Parabolic Price to flip Short:  2970
2025’s Low:  2625 (06 January)
The 300-Day Moving Average:  2549 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

So does Gold’s stellar run stop here, essentially at our 3262 forecast high for this year?  Until we actually experience the coming effect of “TT!”, its babble and prattle shall the markets still rattle.  But like everything else, be it geopolitically, monetarily, financially or whateverly, “TT!” eventually will fall from the FinMedia headlines and, in turn, Gold experience descent to some extent.  Either way, what a gut-grippin’ Gold ride we’ve spent!

The Gold Update: No. 803 – (05 April 2025) – “Gold Comes Off; Stocks Finally Boffed”

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The Gold Update by Mark Mead Baillie — 803rd Edition — Monte-Carlo — 05 April 2025 (published each Saturday) — www.deMeadville.com

“Gold Comes Off; Stocks Finally Boffed“

Long-time readers of The Gold Update know our favourite final future headline is:  “World Ends, Dow +2”, (“The Dow” of course being that Index at which our parents used to look) … except these last two days instead brought Dow -3,911 … just in case you’re scoring at home.

“The Dow” thus having gone down, obviously, the world didn’t end, albeit as a seasoned investor here said earlier in the week:  “Nobody at Goldman has ever experienced a down market”.  Hence the hysteria over something way overdue, certainly so across these last few years.

Indeed on the heels of last week’s missive “Gold Aware, Stocks Beware”, an ever-so long-awaited Stocks Crash Catalyst was finally revealed in the form of a StateSide attempt for tax equality on imported goods.  (See our personal experience closing wrap on that).  More catalyst crash considerations later.  But first, let’s cut to the quick.

Thursday and Friday saw Gold — itself overdue to come off — finally so do whilst stocks got boffed … and Sister Silver summarily slaughtered in loss … all below summarized in this BEGOS Markets’ two-day net change table nonetheless featuring Gold now as 2025’s boss:

And still up +15.8% for the year, Gold this past Wednesday recorded another All-Time High at 3202:  that’s a mere 60 points away from our Golden Goal Three forecast high of 3262.  But then the selling ensued, price settling the week yesterday (Friday) at 3056.  Through the 14 trading weeks year-to-date, ’twas just the second that was down.  But yes, Virginia, Gold (below left) now at 3056 still shows technically near-term as +110 points “high” above its smooth valuation line of 2946, whereas the S&P 500 (below right) by the like metric for the futures is -787 points “low”:

Again, we emphasize that is technically near-term:  Gold is too high and the S&P 500 too low; (and you can find such stances as updated daily on the website’s BEGOS Market Values page).  But fundamentally broad-term, ’tis comprehensively au contraire, mes chères soeurs et frères!  True valuation of Gold is mathematically solved per debasement of the U.S. Dollar, whereas for the S&P ’tis by a rational generation of earnings.

Thus in the following table wherein Gold for the moment is +3.7% overvalued and the S&P -13.6% undervalued, of far greater importance is Gold being -20.2% undervalued (per our opening Scoreboard by Dollar Debasement) and the S&P +40.2% overvalued (per our “live” price/earnings ratio initiated a dozen years ago):

“So what you’re saying, mmb, is this sudden S&P ‘crash’ is just peanuts in the bigger picture, eh?”

Squire, throughout the 68-year existence of the S&P 500, the evolving average of its p/e always reverts to its mean.  We’ll spare you the math history, but per the above table wherein we’ve calculated price by p/e as +40.2% too high — assuming earnings growth remains rather muted — price “ought” correct from here by another -28.7%, ultimately placing the S&P in the 3600s.  Remember:  had COVID never happened, regressing the S&P’s growth track puts it today at best in the low 3000s.  But therein lies the good news:  the $7T post-COVID “accounting entry” (by which the S&P made it up into the 6000s) remains in the monetary system:  thus just as swiftly as dough has left the S&P, so too can it go back into the S&P, see?  For the investor, ’tis at present high stress.  For the trader, ’tis as present high times.  Either way, a ferocious “relief rally” for the S&P wouldn’t surprise us a wit.

That said, this next graphic does not portend well for the S&P 500 as it shows a provisional negative MACD (moving average convergence divergence) crossover on the monthly candles.  ‘Course, it would confirm at month-end, (barring first a significant recovery).  Yikes…

 

And as earlier noted with respect to a long-awaited Stocks Crash Catalyst, we’ve oft referred to the “Look Ma, No Earnings!” crash and/or the “Look Ma, No Money!” crash.  To be sure as we’ve underscored ad nauseam across many-a-missive, earnings have become meaningless, and the amount of money “invested” in the S&P 500 (aka “Casino 500”) is better than twice the size of the actual readily-available money supply to cover it all.  But in awaiting the now appointed “Tariffs!” catalyst, recall what we penned back on 22 February:  “Is this at long last the beginning of the end of the Investing Age of Stoopid?  Either way, as to the media’s perfect scapegoat upon whom to lay blame… think about it.”  Bingo.

But these past five days were not an ongoing “Bingo!” by Gold’s weekly bars as next shown.  The rightmost bar high-to-low was by percentage (-5.3%) Gold’s worst intra-week loss since that ending last 22 November, whilst on a points basis (-187) the worst since that ending 14 August 2020.  ‘Course year-to-date, again, +15.8% is great.  But Silver’s -15.6% two-day slaughter pushed her ratio from Gold up to 103.5x, the highest reading since 14 May 2020.  Priced instead to the century-to-date evolving average of 68.9x Silver right now would be +50% above her present 29.53 level at 44.38!  “GOT SILVER?“  More on her in a bit.  Here’s Gold’s graphic:

As to the Economic Barometer, the past week gave it a bit of a boost:  seven of the 12 incoming metrics improved period-over-period, the best standout being March’s ADP Employment data which also beat consensus as well as having February revised upward.  Negatively however, Unemployment picked up a pip whilst both the Institute for Supply Management’s Manufacturing and Services Indices declined.  ‘Course, the obvious lowlight in the graphic is the S&P 500 (red line).  Here’s the year-over-year view:

On to the precious metals daily bars for the past three months-to-date and 10-day Market Profiles.  First we’ve those for Gold, her “Baby Blues” (at left) of trend consistency appearing to run out of puff; in the Profile (at right) we find it mostly populated by overhead resistors as labeled:

Second, there’s the like drill for poor ol’ Sister Silver:  Slaughtered, creamed, annihilated, ’tis one of her worst graphics on record.  So much so, that we present last week’s five trading days using red bars on the left.  As for her Profile, ’tis nothing but resistance on the right.  And specific to these past two days, Silver abandoned her precious metal pinstripes for her industrial metal jacket in inebriated sympathetic (indeed simply pathetic) decline (-15.6%) with Cousin Copper (-12.8%).  In fact, Silver percentage-wise lost in just two days what Gold has gained year-to-date (+15.8%)!  We can’t bear to look!

We’ll wrap up here for this week with a little personal experience tariff talk.

We (on the very rare occasion) make a purchase that is shipped from the United States.  Our most recent case was $99 worth of a specific popping corn we simply cannot find on this side of The Pond.  The shipping charge was $25, and thus the all-in cost paid to the exporter was $124.

Then came the fun part in order to take receipt of the shipment.

A customs tariff of €28 ($29) was levied along with the beloved value-added tax of €35 ($37) for an all-in cost of $190 for $99 worth of popping corn.  Ex-shipping, 40% of the cost went to tariff and tax.

No wonder the “Leader of the Free world” is fired up.  Just don’t let ’em get your Gold!

A team player, our Squire.  Cheers!

…m…

The Gold Update: No. 802 – (29 March 2025) – “Gold Aware, Stocks Beware”

by

The Gold Update by Mark Mead Baillie — 802nd Edition — Monte-Carlo — 29 March 2025 (published each Saturday) — www.deMeadville.com

“Gold Aware, Stocks Beware“

Well!  Can we all say “Gold 3100!”  After all, why stop at 3000?  For this past Thursday as Gold’s contract volume rolled from April into that for June came +29 points of fresh price premium and (per Tag Team from ’93): “Whoomp! There It Is!” as 3100 June Gold traded, indeed yesterday (Friday) to as high as 3124!

‘Course, from the “Nitty-Picky Dept.”, spot Gold didn’t quite get there, reaching up to only 3085, with the April contract going off the board at 3090.  Yet given our year’s Golden Goal Three forecast high of 3262, (let alone the above Scoreboard’s Dollar debasement Gold valuation of 3825), ’tis merely a  matter of time for spot 3100… and beyond!

Regardless (and you knew this was coming):  all the new-found Gold euphoria aside, yes, we remain expectant for some material degree of price decline.  ‘Tis technically so by our BEGOS valuation of Gold depicting it as +173 points “high” (price then always reverting to valuation).  ‘Tis fundamentally so by inflation’s inability to efface toward a “Fed-favoured” pace.  Let’s have a look.

Technically we’ve our year ago-to-date chart of price’s daily closes vis-à-vis the smooth valuation line which assesses Gold’s movement relative to those of the four other primary BEGOS Markets, namely the Bond, Euro, Oil and S&P 500.  As shown, Gold is presently priced at 3090, but the valuation line is 2917:  thus we’ve the +173-point difference which will get closed, aided as well by the smooth line itself being on the rise:

 

Fundamentally for inflation through February, ’tis said you can “pick your poison” per our puke-green table below, wherein:

  • Should you side with The Bureau of Labor Statistics (which calculates both the Consumer Price Index and Producer Price Index), the pace of inflation slowed for the month, the core PPI itself being deflationary;

  • If instead to go with the Fed, The Bureau of Economic Analysis‘ Personal Consumption Expenditures data came in well-ahead of the Federal Reserve’s preferred annualized rate of +2.0%.  

But:  to average the six annualized measures for February, ’tis magically spot-on at +2.0%  So if you’re an Open Market Committee member, query:  Who to believe?  What to do?  Lower, maintain, or raise?  (To be sure, ’tis FinMedia-verboten to even mention the phrase “Fed rate raise”).  Yet what? No cut? Cue King Crimson crooner Greg Lake from ’69: “Confusion will be my epitaph…”  as here’s the table:

Either way, Gold is the momentum play … or is it?  There being but one trading day remaining in March, indeed in Q1, let’s see where the real year-to-date momentum is as the Metals Triumvirate still tops our BEGOS Markets Standings, the podium placers being the red metal (+27%), the white metal (+19%) and the yellow metal (+17%)  “Got inflation?”  Gold aware, stocks beware:  look at last place.  Here’s the whole bunch:

“But with Copper making all-time highs, isn’t that great for the economy, mmb?”

Traditionally, Squire, Copper is said to lead the economy.  ‘Course with “TT” (“Trump Tariffs”) dominating the newsflow, Copper naturally gets a surge, initially as a negative given it can increase inflation’s pace, but perhaps more broadly as a positive should manufacturing materially return StateSide and elicit higher real Gross Domestic Product.  But definitely mind Copper as it does tend to lead the price of Gold, the red metal having fallen these last two days in-a-row.

As for the noted cellar-dweller in the above Standings, we’ve the S&P 500 -5% year-to-date.  You may well have read that oft-dubitable Goldman Sachs just reduced their year-end S&P target to 6200.  “Ahh, youth!”  Our sense is to replace their “6” with a “4”.  Still to their credit, that post-COVID $7T continues to slosh about … but are equities finally losing their “only game in town” status?  For those of you scoring at home:  annualized, the riskfull S&P yield is now 1.368%; the riskless three-month U.S. T-Bill’s is now 4.188%.  Even those WestPalmBeachers down there can discern which is better; (well, maybe not…)

“But, mmb, the Bipartisan Policy Center just said the ‘X-Date’ for Treasury default is July-October…”

Squire loves welcoming Wall Street to real life.  And welcome to Treasury, Scott “This we got” Bessent.

Really real life is enjoying Gold about to complete its tenth winning month of the past 13.  On a mutually-exclusive basis, 10 wins out of 13 has occurred but three other times so far this century.  And by the week from a year ago-to-date, below is our graphic of the enduring Gold streak.  Therein, just 18 weeks have been down whilst basically double that — 35 — have been up.  Here’s the Long and Short of it:

And in keeping with our month-end mode, let’s next look at leverage via the year-over-year graphic for the Golden percentage tracks of Gold & Bros.  From low-to-high, there’s Franco-Nevada (FNV) +37%, both Gold itself and Newmont (NEM) +41%, the Global X Silver Miners exchange-traded fund (SIL) +52%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +53%, Pan American Silver (PAAS) +86%, and Agnico Eagle Mines (AEM)+92%.  Too, a magnificent charter reader has asked we give special mention to Alamos Gold (AGI) aka “The Agnico of the Mid-Tiers” which +84% year-over-year would be tucked in just below AEM and PAAS.  “Remember the Alamos!”

Near-term for  the precious metals, these are their 10-day Market Profiles featuring Gold on the left and Silver on the right.  Notable volume apices of the past fortnight are as labeled, the yellow metal (quoted by the June contract) showing support initially at 3114, then more so in the 3068-3055 zone, whilst the white metal’s key supporters are 34.75 and 34.25:

Broad-term for Gold we’ve the 16-year monthly candles across price’s structure.  Remember the old trading axiom that “Triple tops are meant to be broken”?  Oh my goodness…

Thus it again being month-end, we go ’round the horn for all eight BEGOS Markets for the past 21 trading days (one month) along with their grey trendlines and baby blue dots depicting the day-to-day consistency of each trend.  And yields having been a bit on the rise find the Bond’s price in recent demise, albeit gaining a safe-haven Friday bid as the S&P 500 fell from the skies.  Note, too, per the website’s Prescient Commentary a couple of weeks back when Oil was in the 65s that the “Baby Blues” were then heralding a run to the low 70s … et voilà:

So as tomorrow we slide EuroSide to summer hours, let’s close it out for this week with (yet another) shocking stat for the S&P 500.  ‘Course, you regular readers know the two “ongoing-in-perpetuity” shocks of 1) the “live” price/earnings for the S&P now at 40.2x — yes, that’s after Friday’s -2.0% fall — and 2) the current market cap of the S&P now $49.1T versus a “readily available” M2 money supply of less than half that at $21.8T.  (Is your brokerage preparing its IOUs?)

Here’s our next shock.  Per the aforeshown BEGOS Markets Standings, again the worst year-to-date loser is the S&P -5.1%.  If we regress by the day from New Year the track of the S&P’s closing price (which currently is 5581), and extrapolate such trend to year-end, the Index then first settles in the 4000s come 12 August, on track to finish the year -25% at 4386.  This varies a bit from Goldman’s 6200, but we tend to notice little things like that.

Because we don’t forget big things like this:

The Gold Update: No. 801 – (22 March 2025) – “Gold’s Year of the Bid”

by

The Gold Update by Mark Mead Baillie — 801st Edition — Monte-Carlo — 22 March 2025 (published each Saturday) — www.deMeadville.com

“Gold’s Year of the Bid“

Thus far in 2025, ’tis been the year of the Gold bid.  Folks who are clueless on Gold are abashedly asking about it.  “How much is it?”  “How do I buy it?”  “How much is in Fort Knox?” “How do I store it?” “How much is it taxed?” “How do I get it outta the UK?”

Indeed, we too query:  has our having penned 800 Gold Updates finally made the world Gold crazy?  That century-to-date — although the S&P 500 is + 329% (from 1320 to 5668) — that Gold’s growth is triple that at +1,005% (from 274 to 3028)?   ‘Tis clear that this year the Golden lightbulb has suddenly gone aglow and everybody’s excited to give Gold a bid, even wee London:

Naturally, we’re also excited.  Based on the linear regression pace at which Gold is rising so far in 2025, ‘twould reach our year’s forecast high — Golden Goal Three of 3262 — on 07 May:  that’s a mere 32 trading days from now, with then nearly eight months left in the year’s balance!

“I dunno mmb, but if it happens that fast, then what?”

Two generalizations there, Squire. “IF” the low for this year is already in place (2625 on 06 January), Gold has a shot at 3400 (or purely in the “expected yearly trading range” equation, 3380), fundamentally supported by Federal Reserve interest rate cuts in concert with a slowing StateSide economy.  Contrarily, stagflation sets in and the Fed is stuck, perhaps even having to raise its FundsRate to slow rising costs, the Dollar then getting the bid away from Gold, which in turn travels toward such downside range in revisiting the 2700s, 2600s, 2500s.  In the meantime, next Friday (28 March) bring February’s “Fed-favoured” inflation gauge of Personal Consumption Expenditures.

For as can be the case with markets — excitement breeds near-term excessiveness.  Through this year’s 55 trading days-to-date, Gold (as is its current case) has been “textbook overbought” for 45 of them.  We refer to it as “textbook” as ’tis visible to the trading public at large should they care to access such available mix of standardly-used technical studies, our preferred cocktail consisting of John Bollinger’s Bands, Relative Strength and Stochastics.

Better still (albeit far less publicly-viewed) is the website’s BEGOS Markets Value for Gold, which just completed a 52nd consecutive trading day above its smooth valuation line, price next shown as +139 points “high”:

Hardly is 52 days above that line a record (the most in the past 25 years being 75 days); however upon reaching 52 days, price then on average within the ensuing 63 trading days (which for you WestPalmBeachers down there is one trading quarter) has fallen -7%.  Thus per Gold having settled the week yesterday (Friday) at 3028 — posting  en route a fresh All-Time High at 3065 — a slide within such -7% vacuum would be some -200 points from here, i.e. relatively in line with our having suggested that the road to Golden Goal Three of 3262 may well first travel through the 2700s-2600s, even to as low as 2507 … just in case you’re scoring at home.  For unlike the Nvidias or Palantirs or Gamestops or even Bitcoins of the world, Gold is not (barring a U.S. Treasury default) going to go straight up:  ’tis too globally liquid for the offers to just “vanish”.

The point is: be thee not discouraged should price pullback a few hundred points, for the ultimate Gold target as ever remains the opening Scoreboard’s Dollar debasement value which at present is 3803.  Hence as depicted in the above graphic:  “Near-term, Gold is too high … ‘Course broadly, Gold is too low!”

Either way, Gold’s year-over-year trend remains nothing short (pun!) of amazing!  To wit, Gold’s weekly bars from a year ago-to-date astride the ever-rising parabolic Long trend per the rightmost blue dots:

And therein note the Gold/Silver ratio is back above 90x, the current 90.3x level being the second-highest weekly close so far this year.  Priced to that ratio’s century-to-date average of 68.8x, Silver — rather than being 33.53 today — would instead be +31% higher at 44.00  “Got Silver?” … (a rhetorical question for our resourceful readers).

From having recently been less resourceful to flatlining this past week is the Economic Barometer.  Oh, there were incoming metrics aplenty:  16 of ’em … of which seven bettered their like reading of the prior period and nine were worse.  The week’s best winner was February’s Existing Home Sales which bettered both consensus and January’s number, such prior month also revised higher.  But the stinkers were March’s National Association of Home Builders Index taking quite a tumble (from 42 to 39), as did the month’s New York State Empire Index (from +5.7 to -20.0).

‘Course, the week’s non-event highlight was the Federal Open Markets Committee’s “sitting on its hands” Policy Statement.  But in conspicuous contrast to the sudden stumble by the Econ Baro, did you read the FOMC’s opening sentence of its Statement?  ‘Tis below embedded:

Not to be overly critical of The Fed, but might its referred “recent indicators” be from last September during which time the Baro — as you can well see — was firmly rising?  After all, you know the long-running saying that “The Fed is behind the curve.”  Perhaps esteemed voting member (and ChiFedPrez) Austan “The Gools” Goolsbee could shed some light on such recent “solid pace”.  Anyway, we’ll instead stick with the actual math.

Turning to the math that makes our “Baby Blues”, they are ever-smoothly in synch with Gold’s moves, either up or down.  Such measure of regression trend consistency as below shown on the left is fairly well-paired with price across the past three months, albeit Gold has dropped for two successive days even as the dominant trend is up.  And on the right in Gold’s 10-day market Profile we see 3043 as the highest-volume handle traded these past two weeks, its role at present that of overhead resistance with notable near-term volume support at 2996:

As for poor ol’ Sister Silver, she has declined for three straight sessions, her like graphic from three months ago-to-date below left and Market Profile below right.  Therein, her dominant volume resistor is 34.35:

Gold’s Year of the Bid indeed!  We’re a bit surprised to see the yellow metal moving so swiftly toward Golden Goal Three of 3262.  Through the year’s first 12 weeks, only one has been down:  such stints of 11 up weeks in 12 have only occurred (as a mutually-exclusive basis) on five other occasions so far this century.  The average price fallout following those five instances within the ensuing three months?  -9%, which again “suggests” similar downside to the aforeshown currently streaking Market Value’s “price over valuation differential” that has historically then led to an average -7% drop.  But as we on occasion caution:  “Average is not Reality” especially given Gold’s strong bid this year.  Still as stated, we shan’t be surprised to see Gold revisit the 2700s, etc.

And in Gold’s year of the bid if such pullback must be, better it indeed be prior to our 3262 Golden Goal Three!

The Gold Update: No. 800 – (15 March 2025) – “Beware the Ides of March — ‘Tis Gold Update No. 800!”

by

The Gold Update by Mark Mead Baillie — 800th Edition — Monte-Carlo — 15 March 2025 (published each Saturday) — www.deMeadville.com

“Beware the Ides of March — ‘Tis Gold Update No. 800!“

Long-time (really long-time) readers of The Gold Update know that our microphones are just about everywhere as was the case in Rome’s Curia Pompeia (a little Latin lingo there) on this day in 44 B.C.  Let’s roll the tape:

  • Soothsayer:  “Hail Caesar!”

  • Julius Caesar:  “Whaddya got, Soothie…”

  • Soothsayer:  “We who embrace Caesar, whose name is magnificent, whose presence is ever-accessible, who makes our world wonderful, we turn our hearts to thee, oh Caesar…”

  • Julius Caesar:  “Oh just get on with it, Soothie…”

  • Soothsayer:  “Oh great Caesar!  Beware the Ides of March!  For on this very day 2,068 years hence shall come the 800th consecutive Saturday edition of The Gold Update!”

  • Julius Caesar:  “Soothie…  Get out!”

Following which of course out came the long knives and the rest — as ’tis said — is “histoire”.

Welcome to the 800th Gold Update, our having missed nary a Saturday throughout.  ‘Tis again a “milestone” for us, and we shan’t forget those who’ve substantively got us here, most notably the Mighty Moriarty of 321Gold, along with Goldseiten, Gold-Eagle, Kitco, Investing.com, TalkMarkets, GoldSeek and YOU: the most savvy Gold readers ’round the world.  Our truly heartfelt thanks to everyone.

Moreover, welcome to Golden Goal Two, such “milestone” level of 3000 by the April futures contract having been reached this past Thursday evening @ 20:49 GMT with spot Gold then following yesterday (Friday) morning @ 10:10 GMT.  A doubly-beautiful thAng!

Further, a hardened aspect of The Gold Update these many years is that when we’re way wrong, we so say!  In this case, we’ve of late been anticipating Gold reaching lower price levels, certainly so from the week ending 28 February wherein Gold high-to-low fell -130 points from 2974 to 2844.  Instead, 3000 was just tapped.

Indeed, whilst our Golden Goal Three for the year is still a projected a high of 3262, we’ve this reminder (from 04 January) as to Gold’s potential downside :  “…applying the ‘expected yearly trading range’ method, the year’s low approximates…2507…”  And should that eventuate, our sense remains it comes prior to 3262 “Goo goo g’ joob” –[Lennon, ’67].

But should we remain wrong (i.e. Gold not materially decline en route), ‘twould be great, for 3262 shall then appear in hindsight as having been a modest mandate.

Either way, Gold settled yesterday at 2994 in reaching a new All-Time High of 3017, the Monday-Friday net gain both by points (+76) and percentage (+2.6%) being the best of the year’s 11 weeks-to-date, within which (as aforenoted) only one has been down.

“Which begs the question mmb, is that an 11-week record?  Congrats on 800 by the way…”

Thanks dear Squire:  we couldn’t have made it this far without you.  As for similar 11-week periods with but one (or even none) as down, on a mutually-exclusive basis ’tis happened century-to-date on seven other occasions, the prior case being within the grips of COVID from the weeks ending 29 May 2020 through 07 August 2020.  Gold for that 11-week stint posted a net gain of +18.0%.  This time ’round ’tis +13.5%.  Regardless, as to “The Now”, all looks great in GoldLand:

And by the above weekly bars from a year ago-to-date, the rightmost blue-dotted parabolic Long trend is now eight weeks in duration, the “flip-to-Short” level of 2760 affording Gold 234 points of wiggle room, (albeit the blue dots are now swiftly speeding upward at a rate of +42 points per week).  Still, by the above graphic, again we say, “Gold is looking as good as it gets!”

However:  in measuring Gold by its smooth valuation line, price’s movement relative to those of the other four primary BEGOS Markets (Bond / Euro / Oil / S&P 500) presently appears some +122 points “high” above that smooth grey line…

…to which price always returns, acknowledging ‘natch that the smooth line itself is in ascent.  So again, some price descent many be in near-term order.  But of broader import — per the opening Gold Scoreboard — price today at 2994 is -807 points beneath the Dollar debasement appraisal of 3801.  Or apropos of this 800th missive, let’s reprise the deserved decree from late great Richard Russell:  “There’s never a bad time to buy Gold!”  Price upon his 20 November 2015 passing was 1077:  wherever in the Gold ether he now is,  the +180% 10-year gain must be most satisfying.

But suddenly not so satisfying is the state of the StateSide economy, which by the Economic Barometer across the past two weeks has suffered a bit of a “whoopsie…” (technical term).  The marked month-over-month braking in the pace of inflation suggests a slowing of activity, although February’s “Fed-favoured” read via Personal Consumption Expenditures is still two weeks away.  But initially for the month at both the headline and core readings, the Consumer Price Index substantially slowed, whilst the Producer Price Index actually hinted at deflation, the headline number’s pace at zero and that for the core coming in negative.  Does that mean the regular stuff yer now buyin’ this month is cheaper?  Well, maybe not, as the University of Michigan’s “Go Blue!” Sentiment Survey for March just suffered its third-worst month-over-month drop since COVID.  “Whoopsie!” indeed.  Here’s the Econ Baro:

Specific to the precious metals, ’tis been anything but “Whoopsie!” in turning to our two-panel graphic of Gold’s daily bars from three months ago-to-date on the left with those for Silver on the right.  For both markets, their respective “Baby Blues” of day-to-day trend consistency just recently breached below the 0% axes, only to then reverse back upward as the 21-day downtrends came to an end:

In next turning to the 10-day Market Profiles for Gold (below left) and for Silver (below right), the standout feature is the yellow metal depicting “A dearth of volume support” which is created when price rapidly covers a large range of points.  ‘Tis merely something of which to be aware should price suddenly skid back down to the 2924 volume-dominant support level.  As for the white metal, she sports a bit of a volume gap from her present 34.35 price down to 33.70, but with firmer support in the 33.20-32.90 zone as labeled:

Thus there we are for No. 800.  It being a “milestone” for us in tandem with Golden Goal Two of price having achieved the 3000 “milestone”, let’s go to the stack.  Therein note:  nothing is listed in the 2800s.  So swift has been Gold’s recent rise, that after having settled a total of 59 days in the 2600s and then 30 days in the 2700s, there’ve been but 11 settles in the 2800s, (just in case you’re scoring at home).  Indeed, a word to the wise is sufficient.  (What that means for you WestPalmBeachers down there is don’t be surprised should selling ensue).  Here’s the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3801
Gold’s All-Time Intra-Day High:  3017 (14 March 2025)
2025’s High:  3017 (14 March 2025)
10-Session directional range:  up to 3017 (from 2870) = +147 points or +5.1%
Gold’s All-Time Closing High:  3001 (13 March 2025)
Trading Resistance:  2996
Gold Currently:  2994, (expected daily trading range [“EDTR”]:  43 points)
10-Session “volume-weighted” average price magnet:  2930
Trading Support:  per the Profile, nothing substantive until 2924
The Weekly Parabolic Price to flip Short:  2760
2025’s Low:  2625 (06 January)
The 300-Day Moving Average:  2479 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

To close it out, we again (as is on occasion a Gold Update tradition) grin over further “FinMedia Freakout!”.  Our FinMedia friends pride themselves on their technical stock market expertise of which they know not just one, but two measures.  They are called “The 200-day Moving Average” and “The 10% Correction”.

In this case, ’tis the latter which came to the fore across this past Thursday’s FinMedia spectrum as a result of the S&P 500 having reached down -10% from its recent all-time high of 6148, (the Index today at 5639).  Rife was the air with panicky hysteria!  From one FinMedia page to the next, the leading heading was nearly identical:  “S&P 500 Enters Correction”.  (Note:  here at deMeadville, the correction commenced three weeks ago upon the S&P futures crossing below their own smooth valuation line as featured daily at the website, hint hint, wink wink, nudge nudge).

The good news is, by the time the FinMedia typically figures this out, ’tis oft a fabulous buy signal.  Indeed prior to yesterday’s +117-point S&P rally, we internally texted it ought be bought.  Boom!  Following which came this hilarious rationale courtesy of CNBC:  “Stocks bounced after a lack of new headlines out of the White House related to tariffs, easing concerns around escalating tensions for the time being.”  (We’re curious as to how may hours may be the “time being”).  The Ides of March, indeed.  On verra…

That stated, we still view the S&P as treacherously overvalued en route to a down year.  But counter to that remains the question:  “Where then is COVID’s $7T ‘relief fund’ that all ended up in the stock market gonna go?”

“Which again begs the obvious question, right mmb?”

Better yet, Squire, as a statement:  How about into Gold!

The Gold Update: No. 799 – (08 March 2025) – “Gold Goes Inside; Stocks Maintain Slide”

by

The Gold Update by Mark Mead Baillie — 799th Edition — Monte-Carlo — 08 March 2025 (published each Saturday) — www.deMeadville.com

“Gold Goes Inside; Stocks Maintain Slide“

Whilst we’ve still our near-term negative bent for the price of Gold, nonetheless let’s reprise this from last week’s missive:  “…one thing to watch is a stirring of geo-political jitters which as you regular readers know can quickly send Gold higher — but generally just briefly — before returning down from whence it came…”

And from the prior Friday’s White House brawl to yesterday morning’s RUS/UKR missile-drone attack, such geo-political jitters — in tandem with tariff tantrums — have kept Gold aloft, price settling the week at 2918 for a net five-day gain of +1.8% (+50 points).

Yet, ’twas a so-called “inside week” for the yellow metal, meaning Gold printed both a higher-low but lower-high than in the week prior.  ‘Tis depicted below in the left hand panel wherein the outermost green and red horizontal lines are the prior week’s range and the innermost two this past week’s range, the diagonal slants showing the difference.  Still, in spite of it all, Gold’s “Baby Blues” of trend consistency continued to fall, paired here with the S&P’s folderol and Silver’s attempting a grip on the ball:

“But mmb, that’s more than just S&P folderol ’cause it’s down -6% from its high!”

We’ve on occasion been queried if Squire is paid for such “teeing-up” comments.  (Rather, for the privilege of his presence on this page, he pays us).

But to the point, yes, the S&P 500 (now 5770) has lost -6% of its value from the all-time high (6147) of just 13 trading days ago (19 February).  Yet from our purview ’tis “nuthin’ but noise” given the mighty Index today is +765% above its FinCrisis low of 667 (06 March 2009) as well as +163% over the COVID low of 2192 (23 March 2020).  Thus for you WestPalmBeachers down there, the S&P’s -6% pullback is a statistical irrelevancy.  And as our regular readers know all too well, relevancy shall have returned upon the S&P’s price/earnings ratio (the “live” reading now 41.0x) having reverted to its reasonable mean in the low 20s, (which always has occurred — either up or down — since the S&P 500’s inception 68 years ago in March 1957) And in turn, the otherwise ongoing Investing Age of Stoopid shall have been eradicated.  (Nevertheless, we’ve more on the FinMedia “Panic!” toward today’s wrap).

As to Gold’s ten trading weeks year-to-date, this past one (the rightmost green bar) is the first to be characterized as “inside”.  Again, the inference as Gold continues to work off its extreme overbought condition is price having benefitted from geo-political and tariff trepidation; hence this past week’s buoyancy:

To be sure, Gold’s blue-dotted weekly parabolic remains safely Long.  However, by our BEGOS Markets Values measure (in placing a near-term value on Gold per its movements relative to those of the four other primary BEGOS components, i.e. the Bond, Euro, Oil and S&P 500), price is still some +70 points “high” above its smooth grey valuation line; and of course, the two inevitibly shall eventually meet.  Here they are from three months ago-to-date:

And again as you well know, we fully expect Golden Goal Two of “milestone” 3000 to trade this year, and further our forecast high for Golden Goal Three of 3262.  Yet as the “Not in a Straight Line Dept.” reminds us, we see the route thereto traveling through the 2703-2641 zone, just in case you’re scoring at home.

‘Course, how lovely ‘twould be to be wrong and instead see Gold proceed from here at 2918 right up the road to the opening Scoreboard’s Dollar debasement value of 3798.  Highly unlikely anytime soon, although in responding at a gathering this past week to the query “Is Gold now going to 10,000?” we said “No, and likely somewhat lower near-term, yet 4,000 perhaps is possible in two years or so…”

But obviously the bogeyman in the room is inflation — which most broadly is a Gold positive — but intermediately a threat to price should the Federal Open Market Committee resort to raising rates.  The good news there, however, is both retail and wholesale inflation by consensii are expected to have somewhat slowed their February paces from those for January.  Next Wednesday (the Consumer Price Index) and Thursday (the Producer Price Index) shall tell the tale.

Indeed let’s segue to the Economic Barometer which took a bit of a boffing during the week.  Of the 15 incoming metrics, only five improved period-over-period.  Most impressive were January’s Factory Orders which increased from December, that month’s decrease being favourably revised, and which beat consensus.  But the stinker was the backup in January’s Wholesale Inventories, which accumulated over those for December, that month’s depletion revised to a slower pace, and were a bit more bloated than consensus.  Too came the not so rare dichotomy of February’s Payrolls taking a rather severe hit per ADP, but by the Bureau of Labor Statistics actually increased.  “What’s your source?”  Here’s the Baro:

 

Meanwhile, let’s assess the state of the 10-day Market Profiles for both Gold on the left and Silver on the right.  Notably for the yellow metal, price spent much of yesterday’s week-ending session clustered ’round the now volume-dominant 2927 level.  As for the white metal, she settled the week smack on her volume-heavy 32.90 support/resistance bar:

More broadly with respect to Gold’s 300-day moving average across the last 14 years, price generally pulls back when ’tis +20% or higher above that measure (the blue line in the graphic).  Just prior to the start of the current near-term price correction (which began from the All-Time High of 2974 on 24 February), Gold had settled as high as +22.2% above said average; at present ’tis still a lofty +18.4% above same.  So again, we ought not be surprised should Gold further subside:

Toward closing, in light of the S&P 500 (which year-to-date is now down -1.9%, “OMG!”) having just recorded its weakest week (-3.1%) of the ten thus far this year, as we earlier teased, let’s check in with a few of Friday’s “FinMedia Freakout” finales:

Bloomy:  “Wall Street’s Big Selloff Puts Pressure on America’s Rich Households”  Lovin’ this one, for how many times have we written:  “Marked-to-market everyone’s a millionaire; marked-to-reality nobody’s worth squat”;

DJNw:  “Most Americans can’t afford life anymore…”  So is DJNw’s assumption here the alternative?  That’s a bummer.

CNBS:  “The oversold stocks due for a technical bounce after a brutal week.”  Truly ’tis dumbing down of the word “brutal”; we’ve haven’t had “brutal” since March 2020; and from 2008 into 2009, we regularly ate “brutal” for breakfast.  So what leads to “brutal”?  The aforenoted “live” S&P P/E of 41.0x.

“So then is the S&P about to crash, mmb?”

Obviously no one knows, Squire.  What will eventuate over time is the reversion of the S&P’s P/E to a level of normalcy, as earlier cited in the low 20s via:  1) a doubling in earnings without the stock market rising, or 2) a 40%-50% stock market “correction”, or 3) a“Combination of the Two” –[Big Brother and the Holding Company, ’68]

Either way, we wrap with a wry note:  per this penning, there remain two full weeks of winter.  Yet for some reason of absurdity, StateSide folks early tomorrow move their clocks to summer hours.  What that means for The Gold Update is — by adhering to its time-honoured traditional uploading each Saturday at 11:00 PacCoastTime — ’twill be an hour earlier here EuroSide at 19:00 for our next three editions (15, 22 and 29 March) until we then nudge our clocks forward come 30 March.

And specific to next week’s piece, beware the Ides of March, for it brings our 800th consecutive Saturday edition of The Gold Update…

The Gold Update: No. 798 – (01 March 2025) – “Thank Goodness Gold Finally Falls”

by

The Gold Update by Mark Mead Baillie — 798th Edition — Monte-Carlo — 01 March 2025 (published each Saturday) — www.deMeadville.com

“Thank Goodness Gold Finally Falls“

Not that we’ve been rooting for Gold to fall, but it being one of the world’s most substantive liquid markets, it implicitly both rises and falls in its interactive role — that reflecting the cost of currency debasement — as one of the five most important financial stores of value along with the Bond (the cost of money), the Euro (or major currency of your choice as the cost of foreign flows), Oil (the cost of the global economic engine) and the S&P 500 (or major market index of your choice as the cost of equity risk).  We of course refer to this high-level grouping as BEGOS:  (Bond / Euro / Gold / Oil / S&P 500).

And from one trading day to the next, each of these five markets at the macro level basically receive and distribute money from one another.  In turn, their combined changes in price elicit a valuation for each component as updated daily on the website’s Market Values page.  And if you’ve been paying attention, Gold across the past few weeks was getting wildly up beyond valuation, our having emphatically pointed to such state in the prior two missives.  But now finally facilitated is Gold’s requisite fall, healthy in spite of it all:

‘Course contra to our wary stance — courtesy of the FinMedia —  emerged the “Suddenly Everybody’s a Gold Expert Dept.” proclaiming the price of 3000 being imminent.  And thus it did not happen, oft normal in such market-amateur hysterias.

Rightly instead, Gold as anticipated whirled ’round down to record its third worst week in better than a year, this time dropping -2.8% (-82 points) in settling yesterday at 2867.  Or to put it to music, we cue the Swiss rock band Gotthard from their ’07 song “The Call”: “The higher they fly, the harder they fall…”

“And, mmb, that really applies now to the stock market, eh?”

Frighteningly so, Squire.  Indeed to quote George Kennedy in “The Eiger Sanction”  (Universal, ’75):  “They won’t even know it’s coming until it hits.”  Or as a valued charter reader of The Gold Update has on occasion queried:  “Does it really matter which snowflake causes the avalanche?”

Then this past Thursday (per our daily Prescient Commentary) came Gold’s “Baby Blues” of trend consistency at long last breaking down below their +80% axis (as we’ll later see), which is key in having generated this signal in the end-of-day work spree:

“The obvious question then is, mmb?”

Squire, “How low is low?”  Thus here we go:  should the present selling become more substantive from the current 2867 level, ‘twould be reasonable to find price reach down into the 2703-2641 zone.  To be sure:  we still expect Golden Goal Two of “milestone” 3000 to eventually trade, directly or indirectly en route to Golden Goal Three of 3262 as our forecast high for this year.  But as we’ve herein reminded since New Year (Gold then 2639), the road to 3262 can quite fairly pass through the lower 2500s.  Is that to where this down run is heading?  Nobody knows.  But ’tis better to get the year’s low place before the high.

And as we been emphasizing, a wayward wrench dropped into the Gold works is inflation.  Recall our title from two missives ago included the phrase “Fed’s Next Hike”.  Apparently “hike” is not an allowable utterance at large.  Rather, press musings oscillate between “cut” and “pause”, with a lean of late toward the latter.  This results from their not implementing math.  Most notably came yesterday’s “Fed-favoured” inflation report for January’s Personal Consumption Expenditures.  The headline number — rather than easing — remained steady at +0.3% whilst the core number’s pace increased from +0.2% to +0.3%.  Here thus is our inflation summary for January:

No, thy eyes do not thee deceive.  Across the six measures, January’s average annualized inflation pace was +4.4%, more than double the +2.0% ultimately desired by the Federal Open Market Committee, nearly double December’s +2.6% rate, and the most since February a year ago.  But absent the use of mathematics, the once mighty Barron’s (which in recent years we’ve designated as a “children’s pool”) ran yesterday with “Inflation Eased…”  Seriously.  No wonder “The Dow” (that Index at which our parents used to look) gained +601 points.

So with the inflation scare in the air, Gold duly dropped as it needed to so do anyway, price as below shown arriving smack on the ascending regression trendline from one year ago-to-date per the weekly bars.  Note the parabolic’s flip to Short price is now 2683, which is quite centered in our aforementioned “how low is low” 2703-2641 zone.  Too, the Gold/Silver ratio is back above 90x, the white metal retreating more swiftly than the yellow metal:

Lower Gold to be sure, but ’tis not to be distressed.  For with two months of 2025 now in the books, we go to our BEGOS Markets Standings year-to-date to again find the Metals Triumvirate leading the whole pack, Copper now atop the stack +13.4% as the red, yellow and white metals dominate the podium:

And with further specificity to the precious metals, here we’ve the year ago-to-date percentage tracks of Gold along with key of its equities kin, therein finding Agnico Eagle Mines (AEM) having doubled at +100%, followed closely by Pan American Silver (PAAS) +91%, and then the VanEck Vectors Gold Miners exchange-traded fund (GDX) +53%, the Global X Silver Miners exchange-traded fund (SIL) +51%,  Newmont (NEM) +43%, Gold itself +40%, the bunch rounding out with Franco-Nevada (FNV) +36%.  ‘Tis about as good as it gets, even as near-term price decline has set in:

Hardly in decline since Halloween is the Economic Barometer, instead sporting on balance the mildest of rises.  ‘Course as we’ve pointed out across some 27 years of maintaining the Baro, increasing inflation works as a positive influence as it raises the nominal values of many-a-metric.  Either way for this past week’s 11 incoming metrics, five bettered their prior period, five were worse, and steady was the first revision to Q4’s Gross Domestic Product at an annualized  +2.3% pace:

As for yesterday’s S&P 500 big post-White House brawl rally, we eye it as a “dead cat bounce” given the significant deterioration of late in the Index’s Moneyflow regressed into S&P points.  By the website’s S&P Moneyflow page, the Index per this leading indicator “ought be” some 180-to-230 points lower than currently ’tis (5955).  Still, a tip of the cap to just concluded Q4 Earnings Season:  therein, 454 S&P 500 constituents reported, 69% of them bettering their bottom lines from a year ago, which across the past 31 reporting quarters has averaged 66%.  But as we point out ad nauseam, the overall level of earnings remains terribly weak given the price of the Index, the “live” price/earnings ratio of the S&P now 43.3x.  So stay suspect when it comes to stocks.

Not suspect a wit (per the “SELL” in the table earlier displayed) is the inevitable cascade in Gold’s “Baby Blues”, the red-encircled dot below confirming such signal.  So as is our month-end wont, here we go ’round the horn for all eight BEGOS components across the past 21 trading days (one month).  And you know the jingle: “Follow the blues, instead of the news, else lose yer shoes”:

Next we’ve the 10-day Market Profiles for Gold on the left and for Silver on the right.  Clearly at 2867, Gold is better than -100 points below its recent All-Time High (2974 this past Monday), whilst Silver has traveled from the 34s back to the 31s.  Notable volume-dominant prices are as labeled:

And with February now in the books, ’tis once again Gold Structure time by the month across some 16 calendar years.  Take note of “The Infamous Triple-Top” whereby each candle closed well below its respective month’s high, price then declining over the ensuing months:  our rightmost candle now for February has the same characteristic.  The good news “as ever” is Gold by currency debasement remains very cheap indeed.  Nonetheless, here’s the graphic:

So thus far for 2025 we’ve two months down (both net-net up for Gold) and ten to go.  As noted, in the year’s balance remain Golden Goal Two of “milestone” 3000 and our projected Golden Goal Three of 3262 for the high.  Yet ahead of such ascent we’ve this current descent, for which as stated we are thankful given major markets are not unidirectional.  However, one thing to watch is a stirring of geo-political jitters which as you regular readers know can quickly send Gold higher — but generally just briefly — before returning down from whence it came.  Either way, in the words of The Gold Update’s first ever reader away back in 2009 (JGS):  “We’ll watch it together.”

So be a cool cat and stay with your Gold!

The Gold Update: No. 797 – (22 February 2025) – “Gold Higher Every Week Year-to-Date”

by

The Gold Update by Mark Mead Baillie — 797th Edition — Monte-Carlo — 22 February 2025 (published each Saturday) — www.deMeadville.com

“Gold Higher Every Week Year-to-Date“

Let’s commence with another infamous Gold Update quiz!  Ready?

Since at least this very day a month ago (22 January), what technically until yesterday (21 February) have both Gold and the S&P 500 had in common?

“They’ve been overbought day-after-day, right mmb?”

Spot-on there, Squire.  Per near-term widely-used “textbook technicals”, (in our case the potent cocktail of John Bollinger’s Bands, plus Relative Strength and a generous dash of Stochastics), we’ve Gold now “overbought” through the past 29 trading sessions (since 08 January), as had been the case for the S&P 500 through 21 trading sessions (since 22 January) until finally yesterday it began to all go wrong.

But of greater import than technical excess, fundamentally both Gold and the S&P instead remain 180° out of phase.  As we regularly remind, whilst the major markets are never wrong, they can be terrifically misvalued.  And ’tis quite stark for this pair:

  • Gold, in settling the week yesterday (Friday) at 2950, is still well shy of the opening Scoreboard’s Dollar debasement valuation level of 3843; in other words, Gold is trading at a -23% discount to its true value.

  • The S&P 500, in settling its week at 6013, remains maniacally expensive, the honestly-calculated price/earnings ratio now 45.7x versus the 25.4x reading a dozen years ago; in other words, the S&P 500 is trading at a +80% premium to such normalized value.

Or if you prefer, the S&P is today at a +154% premium vis-à-vis Jerome B. Cohen’s “in bull markets the average [p/e] level would be about 15 to 18 times earnings”.  But we digress…

The point specific to Gold is:  to be sure, ’tis still today a magnificent value, even in having achieved yet another marginal All-Time High this past Thursday at 2973.  In fact, through these first eight trading weeks of 2025, all have been up for Gold, price itself year-to-date now +12%.  Moreover — in the pure vacuum of linear regression — Gold is on pace to finish this year +93% at 5093(!)  ‘Course, such level would be ridiculously overvalued above Dollar debasement, and again (as we did pen back in 2011) Gold shall “have gotten ahead of itself”.  No, this year ’tis not going to happen.

But in context with our missive’s title, Gold has reached rarified air in terms of consecutive up weeks.  Its last down week was that ending last year.  And now for just the fifth mutually-exclusive (which for you WestPalmBeachers down there means non-overlapping) instance — for the 1,260 weeks thus far this century — Gold has recorded eight or more consecutive up weeks.  Here’s the summary, the current up streak emboldened therein:

Indeed per our prior piece, we’d a bit of a bias toward last week being down.  Not so much given Gold’s “textbook overbought” state, but rather by our proprietary, reliable measure of price versus its smooth valuation line, which as you regular readers knows gauges Gold’s movement relative to those of the primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500).  Here’s the updated graphic from a year ago-to-date, the red encirclements indicative of price essentially being +200 points “high” above the smooth line.  Note when this last occurred in April a year ago, price swiftly sank from 2400 to 2300, then to remain stalled in that range until July:

“But the news says everybody’s buying, mmb…”

We love Squire’s tee-up comments, and the FinMedia certainly is taking a rare above-average notice of Gold.  ‘Course — courtesy of the “It Takes Two to Tango Dept.” — if “everybody’s buying” then too “everybody’s selling”; ’tis just that more offers are being hit than bids, price thus rising.  And as stated, such has been the case through this year’s first eight weeks as we go to Gold’s weekly bars from a year ago-to-date, the rightmost eight closing nubs ascending in green:

Too, never has the phrase “Gold 3000!” been so bandied about by “everybody”.  You’ll recall from last week’s wrap our referring to the late Art Cashin (best last name ever for a stock market maven) having quipped that should a stock reach up to the price of 90, then 100 shall trade.  And thus Gold having already had 2900 trade would correspondingly see 3000, (which obviously it ultimately shall).  For as you know,  we’ve Golden Goal Two of “milestone” 3000, and then by year-end, Golden Goal Three of 3262 as our forecast high.

But having been in this business across many-a-decade, one learns that when something “Well obviously!” is imminent to happen … it oft doesn’t.  As we’ve clearly set forth, the price of Gold near-term is significantly stretched to the upside such that a series of pullback weeks may well now be in order.  Too, as mentioned back at New Year in forecasting 3262 for this year’s high, we specifically stated that the road to that level can reasonably pass through the lower 2500s.  And what an additional buying opportunity that would be.  As is regularly said in this business, we’ll see…

In seeing to the StateSide economy, the Conference Board issued January’s “Leading Indicators” as having had an on-balance decline of -0.3%, whereas as next depicted in the Economic Barometer, that month’s metrics have instead sported a bit of an up bend.  The difference lies in the Conference Board’s assemblage of 10 key monthly indicators versus our aggregation of some 50 metrics.  To the Board’s credit, they regularly make prior month revisions such that come February’s report (20 March) we may see January’s result bumped back up a pip or two: 

Either way, February metrics from last week showed quite notable month-over-month declines in the National Association of Home Builders Index, the Philadelphia Fed Index, and in the revision to the University of Michigan’s “Go Blue!” Sentiment Survey.  And the ensuing week brings the “Fed-favoured” inflation gauge for January of Personal Consumption Expenditures.

But stranger still:  the stock market actually went down on the poor news!  This hasn’t materially happened (without looking it all up) since the March 2020 onset of COVID.  Indeed the new paradigm since then has strictly been “Earnings and economic data are irrelevant because bad news means the Fed has to cut rates!”  Or has that strategy of buying stocks on negative news just stopped working?

With the aforementioned S&P 500 p/e ratio now 45.7x, are earnings soon to matter again?  With the annualized dividend yield on the S&P now 1.253%, is investing $100,000 in the mighty Index worth the $1,253 return in addition to it being hoovered away and then some should stocks suffer?  After all, for the 45 years from 1980 through 2024, the S&P has actually posted years that were down, (’tis said younger traders don’t understand that), in fact on average once every four years … but there’s been only one down year in the past six!  Oh no, say it ain’t so!

And yet, $100,000 invested in the U.S. One-Year Treasury Bill now shall return $4,168:  that’s more than triple the S&P’s yield and you get your money back!  What a concept, eh?  Is this at long last the beginning of the end of the Investing Age of Stoopid?  Either way, as to the media’s perfect scapegoat upon whom to lay blame … think about it.  Once again, on verra…

Too scary, let alone risky, is the stock market.  So let’s get back to Gold …  Good ol’ Gold!

And turning to our two-panel Gold graphic of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right, never in our immediate memory have we ever seen such a pasting on the ceiling for the baby blue dots of trend consistency.  Year-to-date, price has been as close to “straight up” as is conceivable.  ‘Course, Gold being a major liquid market, such trend shan’t last; but ’tis been the most amazing ride of late.  As for the Profile, note that volume-dominant support falls away below 2931:

Then there’s “poor ol’ Sister Silver”, albeit trading in the 33s, hardly is she “poor”.  But in her like graphic, she’s not been (at left) as robustly up as has been Gold, whilst per her Profile (at right) she’s jammed into the center of a trading range essentially spanning from 32.25 up to 33.40.  Yet priced to the century-to-date 68.8x average of the Gold/Silver ratio (the actual ratio currently 89.9x), Silver rather than at 32.83 today would instead be +31% higher at 42.90 … just in case you’re scoring at home:

Speaking of scoring, to wrap, the U.S. Treasury (as you’ve no doubt read) presently “scores” the United States Bullion Depository supply of Gold at $42/oz.  Therein said facility — just on the outskirts of Fort Knox, Kentucky — is “officially” (in round numbers) some 147,300,000 ounces of Gold according to “AI” (“Assembled Inaccuracy”), for an accounting value of $6,174,000,000.  That is how much the U.S. Federal Government spends about every 10 hours.  (Do the math if you must, starting with the annual spend of $6,740,000,000,000).  Makes ya feel kinda small, what?  However:  marked-to-market at $2950/oz. puts the value — were it all liquidated at that price — to a supply total of $433,650,000,000 which essentially would run the federal government for one month.  That’s it.

The Gold Update: No. 796 – (15 February 2025) – “Gold’s Price Spike; Fed’s Next Hike”

by

The Gold Update by Mark Mead Baillie — 796th Edition — Monte-Carlo — 15 February 2025 (published each Saturday) — www.deMeadville.com

“Gold’s Price Spike; Fed’s Next Hike““

“This is where it starts to get fun.”

If said phrase ran across your mind during this past week, worry not: for it, too, ran through our mind.  And thus it having run through both your mind and our mind, then it also ran through the many minds of those financially math-inclined.  For there was more meat in this past week than one might have expected to digest (barring having imbibed in a settling digestive).

First, per our title, let’s assess “Gold’s Price Spike”. For en route to (barely) completing a seventh consecutive up week, Gold on Tuesday made a “Trump Tariffs!” spike up to as high as 2968, a mere 32 points from achieving the Golden Goal Two of “milestone” 3000.  For whilst much of the western world slept, Gold took off like a jet from Tuesday’s open at 2937 to 2968, a +31-point spike in just three hours.  ‘Course it being a price spike, ’twas swiftly short-lived and then some within the 30 minutes that followed.

Further, given fears of renewed inflation made manifest come Wednesday’s StateSide Consumer Price Index, Gold gave up the entirety of the week’s gain to that point on the metric’s staggering shock.  But, another “Global Trade War!” buying binge nonetheless ensued, only to be purged anew, Gold then settling yesterday (Friday) at 2894 for a bare gain of just +8 points for the week.  Here are those five days (10-14 February) by the hour:

And no, thy eyes do not thee deceive, for on the graphic ’tis queried “Fed Rate HIKE?”  Indeed, with respect to the balance of this week’s title, recall these statements from the past two editions of The Gold Update:

1)  01 February:  “…an inflation scare followed by a Federal Reserve rate hike, should they dare, something for which the financial world at large seems unaware…”

2)  08 February:  “…an inflationary scare could cause a Fed flare (again, should they dare), in turn substantiating a Gold price pare…“

Indeed a scare:  January’s headline CPI pace of +0.5% was well beyond experts’ consensus of +0.3%, as too was the core of +0.4%.

But wait there’s more:  The Producer Price Index then arrived Thursday — also above consensus — with headline and core respectively +0.4% and +0.3% … but did you see the revisions to December’s paces?  Headline PPI was recalculated from +0.2% to +0.5% and core from a flat 0.0% to +0.4% –> Across the 27 years of maintaining the Economic Barometer, ’tis but the third time headline PPI has been revised by +0.3% (and never greater) and the very first time core has been revised by as much as +0.4%.  Is this a result of too much holiday consumption of “egg nog” over there at the Bureau of Labor Statistics?  Such are the optics…  Again per our opening statement “This is where it starts to get fun.”

As to Gold’s rightmost price spike — indeed to another All-Time High of 2968 — here ’tis graphically portrayed by the weekly bars from one year ago-to-date, the blue-dotted parabolic Long trend now four weeks in duration:

Certainly still in play is our Golden Goal Two “milestone” level of 3000.  And yes, ’tis still quite reachable during the course of this current Long trend.  Yet that said, we see (at least one) down week ahead.  To be sure, Gold today at 2894 fundamentally remains -25% undervalued vis-à-vis the opening Gold Scoreboard’s Dollar debasement value of 3837.  But near-term Gold is technically overvalued as we again bring up our BEGOS Markets’ (Bond / Euro / Gold / Oil / S&P 500) metric for pricing Gold per its movement relative to those of the other four components.  And by the lower panel oscillator of price less value, Gold now reads as +160 points “high” above its smooth valuation line:

Moreover by standardized technical measures (our cocktail of Bollinger Bands, Relative Strength and Stochastics), we’ve Gold now “textbook overbought” through 25 consecutive trading sessions dating back to 10 January … just in case you’re scoring at home.  So whilst Goal Two for “milestone” 3000 remains well in the cards, (not to mention Goal Three of 3262 for this year’s forecast high), uni-directionality applies neither to Gold nor any major market, which for you WestPalmBeachers down there means Gold shan’t go straight up.

Still, making a bit of a turn up of late is the aforementioned Econ Baro.  As you long-time readers know, inflation — which just “suddenly” leapt back onto center stage — when rising is a Baro positive as nominal levels of various metrics increase in kind.  ‘Course as we’ve herein mentioned, ’tis stagflation that’s the worry.  Recall this from two missives ago with respect to the first peek at Q4’s Gross Domestic Product:  “…per the ‘Chain Deflator’, whereas inflation contributed to 38% of nominal Q3 GDP growth, for Q4 the inflation component increased to 49%.  Thus … slowing growth + increasing inflation = stagflation…“  And did you note the downswing in January’s Retail Sales by -0.9% versus +0.7% for December?

“But mmb, that’s just seasonal after holiday spending…”

Au contraire, mon Squire cher.  Through the past 27 years, only 12 (44%) of such December-January seasonal shifts have been negative.  A bit too much information perhaps, but conventional wisdom is oft oxymoronic.  Here’s the Baro:

Meanwhile, the stock market as measured by the S&P 500 (6115) is but a wee -0.2% below its intrad-day all-time high (6128 this past 24 January).  In turn, our honestly-calculated “live” price/earnings ratio is now 47.7x.  (Yes, we comprehensively understand that earnings have become completely irrelevant to pricing shares; otherwise, the S&P today would be just either side of 3000).

So instead, ’tis “Nuthin’ but Fed!”  And therein lies the confusion.  The StateSide President is insistent that the Fed further cut rates.  FedChair Powell sees the economy as too robust to warrant rate cuts.  And we see inflation as reasonably rampant to warrant rate hikes.  For not only has inflation not calmed down to the Fed’s preferred +2.0% annualized target, ’tis instead now moving further up and away from it.  Still, the “Fed favoured” inflation gauge (Personal Consumption Expenditures) for January doesn’t arrive for another two weeks (28 February). If that too has popped, words such as “hike” and “raise” shall start to be FinMedia propped.

Left without a prop on Friday were both Gold and Silver:  the yellow metal’s intra-day drop of -2.5% was the worst since 18 December, whilst that for Silver of a whopping -5.5% was its worst since 12 December.  Both cases are below shown by their rightmost bars for Gold on the left with Silver on the right.  ‘Tis been a fine move — especially for Gold — across the past three months-to-date, albeit Friday might be referred to as a “technical failure” rather than an imminent trip toward Goal Two (“milestone” 3000).  That stated, as technically overbought is our Gold, ’tis primarily at present being fundamentally driven from one headline to the next, (per our hourly chart earlier displayed).  And as ever, mind those “Baby Blues” of trend consistency(!): 

Too for the precious metals we’ve next their 10-day Market Profiles for Gold (below left) and for Silver (below right).  The yellow metal (currently 2894) may turn dicey sub-2888, whilst the white metal (currently 32.66) has just slipped under her 32.75 dominant volume support price:

So if you are thinking that we are thinking “down” is Gold’s watchword for this ensuing week, yes we agree, albeit as aforementioned, price of late is being headline-driven.  Still as we turn to the stack, Gold year-to-date is well in the black:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3837
Gold’s All-Time Intra-Day High:  2968 (11 February 2025)
2025’s High:  2968 (11 February)
10-Session directional range:  up to 2968 (from 2802) = +166 points or +5.9%
Gold’s All-Time Closing High:  2957 (13 February 2025)
Trading Resistance:  notable overhead Profile nodes 2931 and 2944
10-Session “volume-weighted” average price magnet:  2903
Gold Currently:  2894, (expected daily trading range [“EDTR”]:  34 points)
Trading Support:  most notably 2888, then 2875
2025’s Low:  2625 (06 January)
The Weekly Parabolic Price to flip Short:  2607
The 300-Day Moving Average:  2424 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

Next week brings just a moderate dose of data for the Econ Baro, notable of which come Thursday (20 February) is the Conference Board’s Leading Indicators for January.  Again for regular readers, you know our penchant for referring to such metric as “lagging” given the Baro has already told the tale.  Thus the consensus for a flat January — or maybe +0.1% at best — makes sense. 

Just ensure your Gold and Silver portfolio shares are many percent!

Cheers!

  …m…

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

The Gold Update: No. 795 – (08 February 2025) – “Gold Teases 2900; to 3000 Unencumbered?”

by

The Gold Update by Mark Mead Baillie — 795th Edition — Monte-Carlo — 08 February 2025 (published each Saturday) — www.deMeadville.com

“Gold Teases 2900; to 3000 Unencumbered?“

The price of Gold just completed its sixth consecutive up week, within which the past three thus far comprise the newest weekly parabolic Long trend.  Indeed through this latest week, Gold continued to attain All-Time Highs, teasing yesterday (Friday) up through 2900 to 2910 before settling at 2886.

Moreover as you regular readers already know, our Golden Goal Two (of three) is the “milestone” level of 3000.  And given Gold’s expected weekly trading range is now 93 points, within that vacuum, 3000 (+114 points from here) is certainly “within range” by month’s end.  But are six consecutive up weeks already getting a bit long in the tooth for Gold?

Just in case you’re scoring at home, century-to-date there are now 1,258 trading weeks in the books.  And therein we’ve had 176 Gold up streaks of two or more weeks.  However, Gold’s having completed an up streak of at least six weeks (such as to now) has only happened 14 mutually-exclusive times, the record being 12 up weeks from 20 August 2007 through 09 November 2007 for a net price gain of +26%.  As stated, this new weekly parabolic is but three weeks young per the rightmost blue dots…

…and as comprehensively detailed in our 25 January missive “Gold Goes Long with Three Golden Goals”, the average duration of the prior 10 such Long trends (dating back to December 2020) was 12 weeks.  Further, the average price gain was +10.5% which as penned per our “Moderate assessment … would bring Gold 3069″.

‘Course, neither you, nor we, nor anybody “knows” when Gold 3000 shall trade.  But because we do the math, hardly would we bet against it ever happening, and reaching 3000 not only this year but on this current weekly parabolic Long trend — even as noted with this month — is quite reasonable.  And lest we forget more broadly, Golden Goal Three is our 3262 forecast high for this year, beyond which per the opening Gold Scoreboard, price by Dollar debasement already “ought be” 3833. 

Still, six consecutive up weeks for Gold and our being aware of an inflationary scare could cause a Fed flare (again, should they dare), in turn substantiating a Gold price pare.  For did you note yesterday’s +0.5% Hourly Earnings increase within January’s StateSide Non-Farm Payrolls?  That ties as the largest such increase for just the third time across the past 27 months.  And century-to-date, the average monthly increase is but +0.3%, itself annualized being +3.6% and thus above the Federal Reserve’s desired overall +2.0% pace.  Oh that wily wage-push inflation!   “Whoopsie…”

Too, by Gold’s broad-based 300-day moving average, price today is nearly +20% above such stalwart measure.  Historically since 2001, such excesses have been met with an average decline of nearly -9% during the ensuing three months.  Here’s Gold by the day since the 22 August 2011 then All-Time Closing High of 1900, the 300-day moving average as ever in blue:

Also using our BEGOS Markets’ (Bond / Euro / Gold / Oil / S&P 500) valuation tool which assesses the state of Gold relative to its movement vis-à-vis that of the other four components, price is at present +174 points above its “smooth valuation line” as is below seen per the lower panel oscillator (price less value).  Whilst that can be deemed as “high”, ’tis nevertheless a testament to Gold’s year-over-year brilliant bull run:

Sporting a far more flat run for nearly the past six months is our Economic Barometer.  To wit for the 16 incoming metrics during the week just past, period-over-period, eight improved and eight weakened:  “flat” indeed.  Amongst the standouts however, January’s ADP Employment data and both December’s Construction Spending and Consumer Credit levels all bettered their prior readings, all of which were in turn revised upward, and beat consensii.  But those losing out in all three like categories were January’s Average Workweek (in hours) along with the Institute for Supply Management’s Services Index, December’s Factory Orders and Trade Deficit, plus the prior week’s Initial Jobless Claims.  A clash of many metrics indeed!  Here’s the Baro:

As for the S&P 500, its futures contract these past two Mondays saw substantive opening down gaps such that price intra-day fell -3.0% (27 January) and -2.1% (03 February); but in both cases, the gaps filled all the way back up.  Has investing become this easy?  Indeed, has the Investing Age of Stoopid become an eternal paradigm?  Recall the Wall Street Journal front-and-center piece back pre-DotComBomb about some folks actually believing stock prices only go up?  For all who still frolic in the complacent equities’ froth, we again humbly offer this one reminder:  the same-day “lock limit down” halts for the S&P futures are -7%, then -13%, and finally -20% (which for you WestPalmBeachers down there means “TILT! Game Over!“)

But for Gold, ’tis been nothing but “Game On!”  Below we’ve our two-panel display featuring the yellow metal’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  The baby blue dots of regression trend consistency quite literally have pasted themselves upon the ceiling, which if we may reprise, suggests this fabulous uptrend may seeking at least some near-term bend.  Per the Profile, Gold’s volume-dominant support levels are 2845, 2797 and 2772:

Again perhaps not as robust as that for Gold — but sterling nevertheless — is the like graphic for Silver, her daily bars (below left) and Profile (below right).  And as we’ve be saying week-in and week-out for some four years, Silver as gauged by her ratio from Gold (currently 89.7x) remains cheap, the ratio’s century-to-date average being 68.7x.  Indeed priced to that average today, Silver rather than at her current 32.19 price would instead be 42.00.  But we know you shan’t forget Sister Silver:

So to sum it all up:  Gold is having a fabulous run, that realistically shall become at least a bit undone given the reality which herein penned a week ago that “hardly are markets unidirectional”.

Yet so stated, per our title, is the tease at 2900 to in turn bring 3000 unencumbered?  Such query puts us back in mind better than 20 years ago when (admittedly out of ignorance) we’d gawk at FinTV thinking we could be on the cutting edge of markets’ directions.

“Oh that was pretty ignorant, mmb…”

Squire, your affirmation of such is illustriously inspiring.  But to our point:  rumbling ’round the floor of the New Stock Stock Exchange in those days was one Arthur D. Cashin, Jr.  And we’ve always remembered this quip from him:  “Usually, if a stock gets to 90, it’s goin’ to 100.”

Thus by such theory you can see where we’re going with this:  Gold having now reached 2900 means ’tis going to 3000, albeit by what we’ve herein noted today, perhaps not directly … but eventually.  Because as aforementioned, Golden Goal Three for this year remains our forecast high for 3262!

Cheers!

  …m…

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

The Gold Update: No. 794 – (01 February 2025) – “Gold Achieves Golden Goal 1 of 3 – A Fresh All-Time High”

by

The Gold Update by Mark Mead Baillie — 794th Edition — Monte-Carlo — 01 February 2025 (published each Saturday) — www.deMeadville.com

“Gold Achieves Golden Goal 1 of 3 – A Fresh All-Time High“

As anticipated would happen this past week per “Gold Goes Long with Three Golden Goals”, Goal One “the next All-Time High for Gold”, was achieved upon the February contract price crossing above 2802 on Thursday at 13:39 GMT, in furtherance moving to as high as 2838 before settling yesterday (Friday) at 2809.  Now add in +23 points of April contract premium (February having yesterday gone off the board) and Gold’s “continuous contract” stands today at 2832.  Indeed as herein penned a week ago, getting to Goal One would be EPLS (“easy-peasy-lemon-squeezy”).  Waiting in the wings is the Goal Two “milestone” of reaching 3000, followed during the balance of the year by Goal Three being our forecast high of 3262.

All very bullish to be sure, but we’ve wariness as well that markets do not move in a straight line.  For as depicted back in this year’s opening missive, the route to 3262 may well pass through the very low 2500s, especially should the new weekly parabolic Long trend be short-lived notably from an inflation scare followed by a Federal Reserve rate hike, should they dare, something for which the financial world at large seems unaware.

“Oh, c’mon mmb, there’s no way they’d raise, right?”

‘Tis at present not expected, Squire.  The StateSide President is glowering over the Fed to resume cutting its rates.  We instead are scouring inflation rates.  And with December’s key inflation measures  now in the books, one may say the Open Market Committee’s unanimously voting per last Wednesday’s Policy Statement to “maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent“ was arguably the right thing to do.  For little did the en masse state of inflation change month-over-month.  Problematic thereto, however, is that every inflation metric save for the Core Producer Price Index — be it by 12-month summation or by December’s pace annualized — is still above the Fed’s goal of 2.0%.  To wit, our updated inflation table, paces with red backgrounds in excess of 2.0%:

Thus we await inflation reports for January and February toward the FOMC’s next decision due 19 March.  Conventional FinMedia wisdom apparently assumes rate cuts are to resume, whereas we’ll side with the math for what the Fed may decide.

As to “The Now”, decisiveness for the BEGOS Markets Standings year-to-date sits with Silver getting the best bid so far with our Metals Triumvirate dominating the podium.  We’ve advocated for some four years “Don’t forget the Silver!” as the Gold/Silver ratio since March 2021(then 66x) has climbed up and away from its century-to-date average which today is 68.7x versus the actual ratio now of 87.8x.  So yes, Sister Silver is leading the BEGOS bunch, but she’s still cheap!  Here’s the whole gang:

Indeed speaking of Silver, let’s take a peek at Pan American Silver (PAAS) which year-over-year is +71%, second only amongst the key precious metals’ equities brethren to Agnico Eagle Mines (AEM) that is +88%.  Filling out the following graphic of their respective percentage tracks, we also see the VanEck Vectors Gold Miners exchange-traded fund (GDX) and Gold itself both +38%, the Global X Silver Miners exchange-traded fund (SIL) +34%,  Franco-Nevada (FNV) +26%, and the lately laggard Newmont (NEM) finally +24%:

Specific to Gold, as noted ’tis in a new weekly parabolic Long trend per the next chart’s two rightmost blue dots.  To be sure, the trend across the whole one-year graphic is ever so pristinely positive.  In fact, extrapolating the dashed regression trendline through the final 47 remaining weeks in 2025 puts the year-end price at 3452 (some +190 points above our forecast 3262 high).  But again as duly written, hardly are markets unidirectional, and for Gold on this present parabolic Long trend to achieve Goal Two of the 3000 “milestone” would be fabulous.  Indeed were the dashed trendline’s pace to be maintained, Gold would reach that goal in 14-weeks’ time by that ending 08 May.  Not to hold one’s breath, but ’tis for something to play:

Turning to the StateSide economy, if you’re like us, upon the FOMC releasing a Policy Statement, we absolutely avoid exposing ourselves to the FinMedia and their excitedly emotional excesses.  Rather, we simply read the actual Statement.  And if you so did this past Wednesday, you’ll recall the opening sentence:  “Recent indicators suggest that economic activity has continued to expand at a solid pace.”

Now in the Fed’s defense (assuming by Wednesday they were not tipped off by the Bureau of Economic Analysis’ Q4 GDP data and December’s PCE data, respectively released Thursday and Friday), the FOMC did not see the stagflative suggestions therein.

“You say ‘stagflative’, mmb?”

Indubitably so, dear Squire.  First to Gross Domestic Product, for which “real” Q4 growth came in at a +2.3% annualized pace, having thus slowed from +3.1% in Q3.  But wait, there’s more:  per the “Chain Deflator”, whereas inflation contributed to 38% of nominal Q3 GDP growth, for Q4 the inflation component increased to 49%.  Thus as you learned in “B” school:  slowing growth + increasing inflation = stagflation.  Further, both of the Personal Consumption Expenditures readings increased for December, such “Fed-favoured” inflation gauge increasing from +0.1% to +0.3% (headline) and +0.1% to +0.2% (core).  What it all means for you WestPalmBeachers down there is you’re growing less but paying more.  Here’s the Baro:

However, on balance for the week the Baro managed a wee uptick.  Yet fickle amongst the 12 incoming metrics was Home Sales data.  For December, New Home Sales increased, beat consensus, and had November revised upward; but in a mirror image, December’s Pending Home Sales decreased, missed consensus, and had November revised downward.

As for the S&P 500 which fundamentally remains catastrophically overvalued given puny earnings, we’ve gone on-and-on since COVID that — earnings aside — the math-challenged FinMedia had remained rather vapid for coming up with a crash catalyst.  But now, per the above graphic and to use an expression from the old Westerns, “They’ve got their man!”  Who better, eh?   More on the S&P in our wrap.

But next let’s wrap ourselves ’round the BEGOS Markets of late.  Earlier, you saw their Standings.  Now here are the past 21 daily bars bars for all eight components with — save for Oil — all in linear regression uptrends, even as the Dollar is (barely) not net down for the year.  The baby blue dots are, of course, the day-to-day depiction of each grey trendline’s consistency.  And those for Copper (in certain circumstances considered to be a leader of precious metals’ prices) are in retreat; something for which to be sensitive:

As to the 10-day Market Profiles for the precious metals, with Gold on the left the upper 2700s appear supportive, whilst with Silver on the right same can be said for the lower 31s:

And it being month-end, ’tis time to update our view of Gold’s layered structure by the month across the last 16 years.  Indeed January was a fine start to the year for Gold:

To wrap, as noted we’ve (yet another) cautionary note with respect to the S&P 500.  The Index’s all-time closing high is 6119 as of just seven trading days ago on 23 January.  But since the ensuing six trading days — including the “Daunt de DeepSeek” of Monday, 27 January (prior to which you’ll recall we’d last week penned “…the next … ‘correction’ … shall morph Wall Street emotion from ‘No Fear!’ into ‘Nuthin’ BUT Fear!’…”) — the S&P has lost a net -78 points to now sit at 6041 (en route having been down as many as -156 points to 5963 during that Monday’s quickie-crash).  Moreover, (hat-tip Dow Jones Newswires), Deutsche Bank suggested such “…impact may see market deflate as in dot-com bust…”  Yet it giddily then came all the way back to “fill the gap”.  Oh is Wall Street — albeit now terribly fragile — ever so relieved that it didn’t all go wrong (yet).

But here’s the part for which they’ve not been informed (barring their following the website’s MoneyFlow page):  the S&P’s net change from the all-time high to right now via the MoneyFlow regressed onto the  S&P scale is -668 (“minus six-hundred sixty-eight”) points.  In other words for those of you scoring at home:  the S&P is now -78 points below its all-time closing high; but by its MoneyFlow ’tis -668 same-scale points below same.  And as you know, flow leads dough:

Or to reprise Bachman Turner Overdrive from back in ’74: “You Ain’t Seen Nothing Yet…”

Thus let it be Gold that gets your dough!

Cheers!

  …m…

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

The Gold Update: No. 793 – (25 January 2025) – “Gold Goes Long with Three Golden Goals”

by

The Gold Update by Mark Mead Baillie — 793rd Edition — Monte-Carlo — 25 January 2025 (published each Saturday) — www.deMeadville.com

“Gold Goes Long with Three Golden Goals“

Gold’s weekly parabolic trend finally (after a 10-week Short run) flipped to Long this past Tuesday at 15:19 GMT upon price eclipsing the 2759 level toward settling the week yesterday (Friday) at 2777.  ‘Twas a beautiful thAng, and in thanking our valued republishers we penned:  “…we look forward to a modicum of rejoicing in next Saturday’s edition …”

Thus without further ado, ’tis to rejoice:

Nevertheless, we indeed employ the noun “modicum” as in this business we know to be measured and math-oriented (unlike much of the modern-day shameless pap that passes for “analysis”:  “Well, ya know, the stock’s gonna triple in the next two weeks…” Good grief.  Put a sock in in it).

“But to your title’s point about ‘Three Golden Goals’, mmb?” 

And point-blank here they are, dear Squire, each being a key Gold price:

  • Goal One: 2802 = the next All-Time High for Gold.  The present such high (precisely 2801.8) was achieved this past 30 October.  When is the next?  As soon as Monday given present price (2777) is just -25 points below 2802 with Gold’s EDTR (“expected daily trading range”) per the website now 33 points.  Or certainly so within the new week given the EWTR (“expected weekly trading range”) is now 87 points.  Thus barring Gold only dropping like a stone from the get-go on Monday, 2802 is (to use a technical term) “easy-peasy-lemon-squeezy” (EPLS).

  • Goal Two:  3000 = nothing more than a “milestone” level up through which price shall eventually proceed.  Were our numerical world calculated in “Base 8” rather than “Base 10”, 3000 would instead be 5670, bereft of “milestone” meaning.  Regardless, Gold 3000 ought bring the mo-mo crowd to the fore in propelling price up even more.  ‘Tis achievable during this new Long trend.

  • Goal Three:  3262 = our forecast Gold high for this year as reasonably penned in our opening missive this year on 04 January.  But is that out of reach for the new Long trend?  Probably, (yet see below…)

So in specific context to the above three Gold price goals, let’s go straightaway to the math of what to rationally expect for Gold’s price rise near-term.  And no better foundation for which to measure this next Gold up leg than by reviewing price’s performance across the prior ten weekly parabolic Long trends commencing back on New Year’s Eve at the end of 2020.  The following table depicts Gold’s respective maximum gains by both price and percentage recorded for each Long trend.  We’ll then assess for this new Long trend its potential upside on a conservative, moderate, and aggressive basis:

Conservative assessment:   as aforementioned, Gold can simply drop like a stone from here, thus rendering useless the above table.  But let us focus on the rightmost column “Max Pct. Gained” during the life of each Long trend.  Therein the weakest of the bunch is +1.9%.  Repeat only that distance this time ’round would nonetheless bring Gold from its present 2777 to 2830 … and thus the attainment of Goal One (2802) as a fresh All-Time High.  A bit more realistically, note the average gain of +10.5% — less the standard deviation of -6.3% — in turn leaving +4.2% as a suggested “minimum expected gain”:  that yields Gold 2894.

Moderate assessment:   simply that average gain of +10.5% which would bring Gold 3069 … and thus the attainment of Goal Two (3000) as a “milestone”.

Aggressive assessment:   note in the same  “Max Pct. Gained” column there are two instances of Gold exceeding gains of +17%.  ‘Tis admittedly a bit of a stretch, but from 2777 to our Goal Three (3262) forecast high becomes a gain of +17.5% … just in case you’re scoring at home.  However, given our measured thinking, we’d “expect” at least one more weekly parabolic Short trend to intervene before Gold flies to the 3262 prize.

Indeed, Gold’s low thus far this year is only 2625 (06 January).  Recall from our 04 January piece:  “…applying the ‘expected yearly trading range’ method, the year’s low approximates … 2507.  Then would follow the ascent to [the] forecast high of 3262…”

Thus we ought not be put off upon still lower levels occurring en route.  To wit:  following next Wednesday’s (29 January) “maintain” Policy Statement from the Federal Reserve’s Open Market Committee comes Friday’s release of December’s Personal Consumption Expenditures Prices.  Such “Fed-favoured” gauge is expected to reveal inflation as once again increasing.  That in turn opens the door … depending on February and March inflation readings … of a Fed rate hike come the FOMC’s 19 March Policy Statement.  Wariness of such could well cap Gold’s up run, making this new Long trend short-lived.

“But mmb, what if the 2625 low is already in for this year?”

Squire, were that to turn out to be the case, then our forecast for a 3262 year’s high may be deemed in hindsight as modest.

Quintessentially modest across the past four months is our Economic Barometer.  And amongst the ensuing week’s incoming set of 13 metrics, two are specific to the first read of StateSide Q4 GDP.  Going by the flat Baro below, one cannot anticipate much growth.  Consensus suggests a slowing from Q3’s annualized +3.1% to +2.3% for Q4.

But wait, there’s more:  the inflation component therein is expected to have risen from +1.9% to +2.4%.  In other words for you WestPalmBeachers down there, Q4’s growth is “expected” to be rather stagflative, (such multi-syllabic adjective perhaps a bit much for them).

But way too much for anyone invested in the S&P 500 is its relentlessly high “live” price/earnings ratio of 47.2x.  (Note:  “AI” says … in using trailing 12-month earnings as do we … ’tis 28.8x; yet another example of Assembled Inaccuracy’s inability to do math).  Here’s the picture:

“But Q4 earnings are supposed to be great, eh mmb?”

‘Tis a good news/bad news scenario there, Squire.  To be sure for the S&P 500, Q4 Earnings Season is off to an excellent start.  Typically for the S&P, about 450 companies report with the season’s calendar guidelines.  Thus far, about 12% are in the books, within which 71% have bettered their bottom lines from Q4 a year ago:  that is an above-average showing of improvement, and hence ’tis the good news.

Now for the bad news (and if you regularly read us and/or visit the website’s S&P 500 “Valuation and Rankings” page you already well-know this):  the overall level of earnings — even as improving — remains ridiculously low compared to what entities are willing to pay to own shares.  If in our solar system Earth represents P/E acceptability, the current 47.2x level is on beyond Neptune, past the ex-planet Pluto, indeed reaching galaxies unknown.  Again we remind:  had COVID never occurred nor the subsequent “creation” of $7T, the S&P today would tolerably be — by today’s actual earnings generation — ’round the upper red line of the 46-year based regression channel:

Thus beware to those who roll their eyes over talk of a pending -50% S&P “correction”:  the possibility is quite real given we’ve already endured two such “corrections” in just the last quarter century.  Remember from the S&P’s high (1553) on 24 March 2000 that it took better than 13 years for the Index to settle just +2% higher?  Imagine how that would fare with today’s low-information, short-attention span, instant gratification crowd that vastly populate this Investing Age of Stoopid.  In fact, it might be a good idea to invest in diaper manufacturers.  For the next like “correction” — regardless of when it comes — shall morph Wall Street emotion from “No Fear!” into “Nuthin’ BUT Fear!”

‘Course, then there’s Gold. Ahhh, beautifully wonderful Gold!  Here we’ve the two-panel graphic of the yellow metal’s daily closes from three months ago-to-date on the left and 10-day Market Profile on the right. And you know the drill for the baby blue dots of trend consistency:  “Follow the Blues instead of the news, else lose your shoes.”  Too, there are a bevy of volume-driven price supports as labeled in the Profile:

Silver of late has not fared as directly up as has Gold.  To the white metal’s like display, wherein (below left) her price has tailed off somewhat and her “Baby Blues” have stalled.  You may earlier have noted in Gold’s weekly bars graphic the Gold/Silver ratio now being up to 89.5x, its highest reading in this young year-to-date.  And unlike the Market Profile support structure for Gold, Silver’s (below right) appears more overhead resistive.  Has Sister Silver exchanged her precious metal pinstripes for her industrial metal jacket, given Cousin Copper having come off of late?  ‘Tis on occasion her wont to be a bad girl…

In sum, we anticipate further near-term rising for Gold, barring — as duly noted — an inflation/Fed-hike scare.

Moreover, let’s close with this critical notion:  in addition to the three Golden goals herein described, there is, of course, a fourth:

  • Goal Four: 3822 = the opening Scoreboard’s current Dollar debasement valuation of Gold, even as adjusted for the yellow metal’s own supply increase.  No, we shan’t get there within this new weekly parabolic Long trend, let alone this year.  But ’tis sitting out there…

Reprise:  “Got Gold?”

Cheers!

  …m…

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

The Gold Update: No. 792 – (18 January 2025) – “Gold Gets Close, but No Cigar”

by

The Gold Update by Mark Mead Baillie — 792nd Edition — Monte-Carlo — 18 January 2025 (published each Saturday) — www.deMeadville.com

“Gold Gets Close, but No Cigar“

“So near and yet so far.”  So says Nick-Nack to Francisco Scaramanga, –[“The Man with the Golden Gun”, Eon/UA, ’74].  So quintessentially perfect, too, does it describe Gold’s rally this past week wherein price on Thursday came within just five points (at 2758) of eclipsing the weekly parabolic Short trend level of 2763 which would have flipped said trend to Long.  But instead, price then faltered to 2729, still to rebound yesterday (Friday) up to within four points (at 2759), only to then again sink back in settling the week at 2740.  Thus the still ongoing Short trend just completed its tenth consecutive red-dotted week per this chart of Gold’s weekly bars from one year ago-to-date:

Acknowledgedly, ’twas just a week ago that we wrote “Gold’s Short Trend Nearing Its End”, and indeed as now noted, how close price came to the 2763 parabolic hurdle.  But as we therein duly penned:  “…until the present Short trend actually confirms having flipped to Long, Short remains Short…”  And whilst Gold actually has mildly risen through most of this Short trend, those rightmost red dots above have basically been a slanting roof over price.  However:  the good news for this ensuing week is the nearby opportunity for Gold’s trend to finally flip from Short to Long per the following graphic.  Depicted are Gold’s 60-minute (one-hour) candles for the entirety of this past week.  Note the two green horizontal lines:  the upper one is the 2763 level Gold needed to attain to flip the trend … again, price got close but no cigar; but the lower green line is the new 2759 level necessary to achieve the flip in this ensuing week.  And given Gold’s range statistics in the black box, 2759 is well within reach:

“But you just repeated ‘Short remains Short’ and that does look like a double-top, huh mmb?” 

Squire ever so enjoys brandishing his technical chapeau at times, and you can see in the above chart his “double-top” observance which oft sends markets lower.  To be sure, were Gold to have a “straight down” week, the Short trend remains in place.  But being just 19 points from the Longside threshold as the week unfolds — given an expected weekly trading range of 87 points — the mere ebb and flow of dough “ought be” enough for Gold to trade above 2759 within a week’s time.  Moreover should that occur, yet Gold then go on to record a down week, the trend would nonetheless already have flipped to Long.  But until that confirmingly takes place, we shan’t rule out further downside toward (as we’ve written) the upper 2400s … yet hardly shall we root for such.

Now as we work toward addressing the Economic Barometer, let’s briefly assess inflation, which if indeed perking up can initially retard Gold’s upward path.  And this past week, the FinMedia hysteria was palpable:  on the heels of Tuesday’s leading read of December wholesale inflation (Producer Price Index) — the pace of which encouragingly slowed — Dow Jones Newswires looked toward Wednesday’s retail read (Consumer Price Index) with “Stock Investors brace for possibly the ‘most important inflation reading in recent memory'” in quoting an SWBC analyst.  Then upon the retail release, Bloomy followed up with “Wall Street Sees Best CPI Day Since October 2023”.  Wrong.  (Do they no longer employ editors at Bloomy?)  December’s +0.4% CPI pace was the most since that for last March; or assuming neither you eat nor drive, the “core” pace of +0.2% — whilst off a pip from November’s +0.3% read — matched that of both May’s and July’s paces.  But as alluded to a week ago, this is what you get when human headlines are replaced with those generated by “AI” (“Assembled Inaccuracy”).

Fortunately — assuming you do your own math and analysis — you don’t make investment/trading decisions from FinMedia fodder.  Still, with respect to inflation, we’re nearly two weeks away from December’s “Fed-favoured” Personal Consumption Expenditures readings, which due 31 January come two days after the next Policy Statement from the Federal Reserve’s Open Market Committee … (but does the Bureau of Economic Analysis tip them off?  Just a thought…)

As to thinking on the Econ Baro, the past week’s robust stream of 18 incoming metrics were on balance positive.  Notable improvements were recorded for January’s Philly Fed Index along with December’s Housing Starts, Industrial Production and Capacity Utilization:  all four of those metrics posted period-over-period growth, were revised higher from their prior readings, and beat their respective consensii.

Still, growth in Retail Sales slowed.  Also, Initial Jobless Claims increased, were worse than consensus, and the prior week’s number was revised higher, (perhaps a function of folks first finishing New Year’s partying before searching for a job to pay for the credit card’s having financed it all).  But net-net, the Baro got a boost, which in turn likely leaves the Fed to sit on its hands rather than see its FundsRate come 29 January further loosed:

Truly getting a boost even within its weekly parabolic Short trend is Gold as we turn to the two-panel display of daily bars from three months ago-to-date for the yellow metal on the left and white metal on the right.  ‘Tis important to note that Gold’s baby blue dots of trend consistency have just risen above their key +80% axis:  upon their inevitably dropping beneath same, one must then be wary for lower price levels; but hopefully by then the parabolic trend shall already have flipped to Long toward limiting any substantive downside demise.  Silver’s like recent rally has been less robust than that for Gold:  thus came the past week’s rise in the Gold/Silver ratio from 86.8x to 88.3x; again with the century-to-date average ratio being 68.7x, Sister Silver remains cheap!

And for the precious metals’ 10-day Market Profiles, here we’ve those for Gold (below left) and for Silver (below right).  Obviously with Gold having had the better rally of late, we find present price (2740) higher up in its Profile than is that for Silver (31.05):

As to Gold’s price stack, here ’tis:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3817
Gold’s All-Time Intra-Day High:  2802 (30 October 2024)
Gold’s All-Time Closing High:  2799 (30 October 2024)
The Weekly Parabolic Price to flip Long:  2759
2025’s High:  2759 (17 January)
10-Session directional range:  up to 2759 (from 2627) = +132 points or +5.0%
Trading Resistance:  notable nearby Profile nodes 2748 / 2755
Gold Currently:  2740, (expected daily trading range [“EDTR”]:  34 points)
Trading Support:  2739 / 2725 / 2718 / 2705 / 2686 / 2682
10-Session “volume-weighted” average price magnet:  2697
2025’s Low:  2625 (06 January)
The 300-Day Moving Average:  2371 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

And so to close with another FinMedia alert so eloquently put, again courtesy of DJNw, this from last Tuesday:  “The 10-year Treasury yield is nearing 5% again.  Why stock investors are freaking out”.  ‘Course the inference there goes back to the two years prior to the FinCrisis.  Indeed for seven of the 16 months spanning from April 2006 into July 2007, the 10-year yield reached above 5%, albeit the S&P 500 rose right through that period (+20% from 1295 to as high as 1556).  Then it all went wrong — not because of a 5% yield — but rather due to lack (understatement) of lending standards.

Still, many modern-day stock investors don’t know what ’tis to truly be “freaking out”.  They’ve yet to experience the “Look Ma! No Earnings!” crash, given the current “live” price/earnings ratio of the S&P 500 (now 46.6x) eventually reverting to its 68-year evolving mean; (for those of you scoring at home, that suggests a -50% S&P correction).  Too, there’s the even scarier “Look Ma! No Money!” crash, given the current $52.9T S&P 500 market capitalization being supported by a liquid StateSide money supply [“M2”] of “only” $21.7T; (for you WestPalmBeachers down there, that means there’s more than twice as much money invested in the stock market than readily exists).

So fire up a stogie and be prepared to follow your monetary star…

 …such that you’re not spared a Gold bar and cigar!

Cheers!

  …m…

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

The Gold Update: No. 791 – (11 January 2025) – “Gold’s Short Trend Nearing Its End”

by

The Gold Update by Mark Mead Baillie — 791st Edition — Monte-Carlo — 11 January 2025 (published each Saturday) — www.deMeadville.com

“Gold’s Short Trend Nearing Its End“

Whenever Gold is technically in a “Short trend” — yet price doesn’t substantively “go Down” — we say ’tis a “beautiful thAng”.  Indeed, Gold’s ongoing Short trend just recorded its ninth consecutive week per the rightmost red parabolic dots as seen here: 

More to the point, Gold settled this past week yesterday (Friday) at 2717:  that is +25 points above the current Short trend’s confirmation for initial entry back at the open on 11 November, the price then 2692; (in other words again for you WestPalmBeachers, in this case down has been up).

Further, Gold’s “expected weekly trading range” is now 87 points.  So for those of you scoring at home, given Gold’s current 2717 price, the graphic’s flip-to-Long level of 2763 (+46 points from here) is well “within range” such that in a week’s time this Short trend can have reached its end.  And once that occurs — be it in one or possibly more weeks —  Gold’s 2025 drive to 3000 shall come alive.  Then in turn, our year’s forecast high for 3262 is that for which to strive.

‘Course as you seasoned traders understand all too well, going contra-trend (oft to referred as “jumping the gun”) can lead to one’s own end.  For until the present Short trend actually confirms having flipped to Long, Short remains Short.  And whilst we regularly quip that “Shorting Gold is a bad idea”, should December’s inflation data pop in this ensuing week’s economic reports, Gold likely reverts lower, again as we’ve mused with the upper 2400s reasonably in the balance.  (Recall a week ago in forecasting the 3262 high for this year our method as well measured a year’s low ’round 2507).

All that said, Gold fundamentally is in a “Long trend” as clearly depicted in the opening Scoreboard’s righthand panel, price seemingly straining upward toward the StateSide Money Supply’s (“M2”) green line.  Specifically today at 2717, Gold is priced at 71% of its 3818 Dollar debasement valuation, even as rightly adjusted for the increase in the supply of the yellow metal itself.

And let us not overlook the white metal.  Silver settled the week at 31.30.  And as noted at the foot of the above graphic, the Gold/Silver ratio is 86.8x.  The ratio’s century-to-date average is 68.7x:  so priced to that average today puts Silver +26% higher at 39.58.  Moreover, were Gold today priced at its debasement valuation level of 3818 with the Gold/Silver ratio at that 68.7x average, Silver’s price equivalent is +78% higher at 55.60.  Reprise:  Do not forget the Silver!

“But mmb, with down being up, what is one to do?  Just sit and wait for higher Gold?” 

A super “tee-up” question there, Squire.  Buying Gold, holding Gold and just putting it securely away is the quintessential conservative play.  But if “trade one must”, let’s share with you a little internal thrust.

Should you regularly engage the website, you are aware of its “Market Rhythms” page which, when conversing with folks, we sometimes refer to as “The Goldmine”, albeit ’tis 100% based on what’s already happened.  (No one in this business ever “knows” what’s going to happen).  But to Squire’s question, one can peruse the Market Rhythms page to see what technical studies of late have been — in hindsight — attractive.  And on the list amongst 11 studies currently listed for Gold is its one-hour Price Oscillator; (assuming you have an exchange-subscribed data broadcasting system and/or graphics trading platform, you can display this technical study).

Now for the purposes of today’s missive, we’ve simplified its recent results.  Since 05 December (15:00 GMT) there have been 10 pure swing signals alternating ’round and ’round from Short-to-Long-to-Short-etc, the current signal being Long since last Tuesday at 06:00 GMT.  Below, the green line depicts in hindsight the study’s cumulative profit/loss were one to have purely swung electronically with Globex on one Gold COMEX February 2025 futures contract.  ‘Tis not bad, however as therein stated it shan’t last:  market dynamics — indeed the ebb, flow and timing thereto — are constantly shifting.  So trader beware, but of late ’tis there:

“Still, mmb, that looks pretty amazing!”

Which, dear Squire, is why ’tis said some 90% of futures traders lose it all.  For once they think they’ve “figured it out”, it stops working.  Or to quote George Peppard consoling Ralph Manza:  “It’s a rough game for amateurs” –[“Detour to Nowhere”, Universal, ’72].  For in due course, the performance in the above graphic will stop working:  ’tis merely about “The When”.  The Market Rhythms page is thus updated daily because those studies currently listed inevitably turn to failure, the list repopulating to present what’s been working best.

As to currently assess the Economic Barometer, ’tis neither failure nor feast:  rather, ’tis flat.  Cue the crowd:  “How flat is it?”  The range of the Econ Baro across the past 10 S&P 500 trading days is the flattest recorded since that ending 08 May 2019.  Still this time ’round, since Boxing Day the Baro has taken in 18 metrics for which period-over-period nine improved … meaning nine did not do so.  We thus present the El Phlato Baro:

And having earlier alluded to next week’s December inflation data, the month’s Non-Farm Payrolls net creation of 256,000 — the best since last March’s 315,000 and well above the 12-month average of 202,000 — certainly underscores the Federal Open Market Committee’s resolve not to cut The Bank’s FundsRate come the 29 January Policy Statement.  And obviously the stock market didn’t like the comparatively “robust” employment news one bit as this “good is bad” Investing Age of Stoopid rolls along.

Again as herein detailed a week ago, the Dollar Index continues to get the bid, trading yesterday to as high as 109.485, such level not seen since 10 November 2022.  The Dollar bulls sense the inflation genie is not yet fully back in the bottle to the Fed’s liking, albeit we’ll see this Tuesday/Wednesday that which the Bureau of Labor Statistics has concocted for December:  consensus at this writing suggests a slightly cooler inflation read.  Should that be the case, then we’d expect Gold to finally end its weekly parabolic Short trend.

And as we turn to Gold’s two-panel graphic of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right, the picture appears fairly upside constructive for price otherwise still being in a “Short trend”.  Note the baby blue dots of trend consistency:  they are poised come Monday to climb above the 0% axis meaning the 21-day linear regression trend shall have rotated from negative to positive.  Meanwhile, the Profile’s big belly of support starts ’round 2673:

The like graphic for Silver continues to be an almost identical twin to that for Gold.  As her “Baby Blues” (at left) work their ascent, that regression trend also looks ready to rotate to positive, whilst the Profile (at right) depicts key underlying supporters at 30.70 and 30.00.  Let’s go Sister Silver!

Thus as we wait and see if this ensuing week ends Gold’s Short-side spree, let’s wrap for today with a wee FinMedia folly.

In taking coffee here with a fabulously fine friend (who indeed is a highly-influential member of truthful media), we bemoaned the issue of the modern-day FinMedia becoming essentially less and less useful, at least from our personal perspective.  Our friend pointed to AI garnering more control of what is put upon FinMedia website home pages as “news”.  And quite obviously “Assembled Inaccuracy” begets same.  To wit this headline from Dow Jones Newswires the evening prior to Friday’s release of December’s job data:  “Investors on edge as Friday’s jobs report could make or break stock-market rally.”

Query:  ” What ‘Rally’ “?  Any of you see a “Rally”?  At least judging by the S&P 500, such “Rally” faltered five weeks ago (06 December) from which the Index on balance has fallen.  Perplexed as can be, we straightaway went to our own “live” on-screen visual of the S&P 500 futures from one month ago-to-date and captured its image as follows, some six hours prior to the release of the jobs data.  No “Rally” there by that grey trendline:

“Well, it depends from how far back you measure, mmb…”

True enough, Squire.  But today’s “info flow” seems so short-attention-spanned that to go back a month is ancient history.  Of course the S&P increased +23% in 2024, bettered (amongst our BEGOS Markets) only by Gold’s +27% gain.

But to our point, especially with respect to the above example:  we oft quip about the modern-day analysts/FinMedia cabal as being math-deficient; now we’re concerned over their becoming work-deficient.  As we’ve noted over recent years, were Grandpa Hugh in charge today (as he was back in the day), he’d fire the lot of ’em.

This underscores — especially with respect to today’s investing and trading — the critical importance of  doing the math and attendant work yourself … else be left on the shelf.  We turned off FinTV 20 years ago and are better off for having so done.

It also underscores the importance of staying with Gold … and Silver as bold!

Cheers!

  …m…

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

The Gold Update: No. 790 – (04 January 2025) – “Our Gold High for ’25”

by

The Gold Update by Mark Mead Baillie — 790th Edition — Monte-Carlo — 04 January 2025 (published each Saturday) — www.deMeadville.com

“Our Gold High for ’25“

A little cheer to start the new year:  “We’re Number One!”

 

Yes, across the 2024 BEGOS Markets’ spectrum, the year’s best performer was Gold’s +27.4% increase.  ‘Course, for the math-challenged FinMedia, all the talk has instead been over the S&P 500’s +23.3% gain.  ‘Tis the quintessential example of “Money talks, Wealth whispers”.  (Got Gold?)

On to 2025. And as ’tis been absolutely eons since we’ve had a pop quiz in The Gold Update, let’s begin the year with one. Ready?

  • What was the last year wherein Gold netted a yearly gain for a third consecutive time?

If (without looking it up) you answered “2012” you’ve earned a Gold Star.

Moreover, through this century-to-date’s 24 completed years, Gold netted yearly gains 12 consecutive times from 2001 through 2012.

Since then however, such streak has succumbed to becoming “herky-jerky” (technical term).  Following those 12 consecutive up years, Gold then netted:

  • Three consecutive yearly losses from 2013 through 2015;
  • Two gains for 2016 and 2017;
  • A loss in 2018;
  • Two gains for 2019 and 2020;
  • Two losses in 2021 and 2022;
  • Two gains for 2023 and 2024.

Thus if such “herky-jerky” pattern of these past 12 years continues, Gold shall suffer a net loss for this year 2025 … but we don’t think so.  Rather, for the first time since 2012, we look to Gold’s recording a third consecutive net yearly gain.

Despite the FinMedia’s disinclination to highlight Gold, from our purview it continues to quietly be gaining a wee degree of (pardon the yucky woke word) “awareness”.  To the extent that Gold ownership is increasing is a reflection of its price having risen, certainly so across the past two years.

Still, trying to estimate the percentage of Gold owned by various entities yields quite a large standard deviation.  Pro-Gold bugs push that a mere 0.5% of individuals carry exposure to the yellow metal; AI (“Assembled Inaccuracy”) puts portfolio exposure up toward 10%; and (hat-tip The World Gold Council) private individuals own more Gold than do governments and banks combined.

Regardless — and with specificity to the debasement of currency as the ultimate driver of valuation — Gold’s price trend clearly is up.

“So let’s get to it, mmb:  what’s Gold’s high gonna be for this year?” 

First, Squire, as acknowledged above, Gold could put in a down year.  Should StateSide inflation — which as you regular readers know — remain above the Federal Reserve’s +2% target, interest rate decreases then morph back into increases.  In turn, the Dollar becomes more attractive still, and both the horrifically overvalued S&P 500 and Gold (at least initially) descend.  Naturally, inflation inevitably works back into Gold’s favour.  But such negative scenario is quite real — one might even say “anticipated” amongst the currency bunch — given the Dollar’s increase throughout Q4 of last year.  Indeed for 2024 per our the BEGOS Markets’ Standings, the Dollar Index netted an annual gain of +7.1% … but Gold (which as you know plays no currency favourites) went up anyway.

Still, at the end of the day, we expect Gold’s positives to will out, and certainly so the creation of more dough.  To repeat that herein penned just a week ago:  “And the month’s Main Event commences 14 January upon U.S. Secretary of the Treasury Janet ‘Old Yeller’ Yellen begging for dough upon which to draw to pay obligations on the nation’s debt.”  Whoopsie.

As to Gold’s high in ’25:  recall a year ago our opening missive was entitled “Gold – We Conservatively Forecast 2375 for 2024’s High“ … and such forecast turned out to indeed be “conservative”, price rather swiftly arriving at the 2375 target on 09 April en route to the current All-Time High of 2802 on 30 October.  For 2025, we’re a bit more “aggressive” especially having just acknowledged Gold could put in a down year.

However, given our perspective that ’twill be an up year, in establishing a forecast Gold high, we employed the quantitative aspects used to present the website’s “Market Ranges” page, in this case to solve for Gold’s “expected yearly trading range”.  We like this approach as it supports maintaining prudent cash management, (the most important element of trading).

Now obviously we don’t expect Gold to go straight up; however we do see the low coming before the high.  Recall from recent missives that Gold is currently in a weekly parabolic Short trend, which — given other negative technicals — we’ve mused price perhaps tapping the upper 2400s near-term.  And applying the “expected yearly trading range” method, the year’s low approximates that area at 2507.  Then would follow the ascent to its forecast high of …  … 3262.  ‘Tis thus basically a +30% run from low-to-high as 2025 unfolds.  For now, Gold yesterday (Friday) through the first two trading days of the year settled at 2653.  Achieving our 3262 level may seem a very long row to hoe, but with 250 trading days remaining in 2025, there’s time.

In the meantime, let’s go to Gold’s aforementioned weekly parabolic Short trend, the rightmost red dots now eight weeks in duration.  Yet at present, the positively sloping dashed trendline is on pace to reach 3262 within the year, albeit obviously such trend can rotate to negative:

Now it being month-end, indeed year-end plus two trading days, let’s bring up the percentage tracks of Gold and key of its equities’ brethren from one year ago-to-date.  Therein we see at best Agnico Eagle Mines  (AEM) +54%, followed by Pan American Silver (PAAS) +37%, Gold itself +29%, the Global X Silver Miners exchange-traded fund (SIL) +22%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +18%,  Franco-Nevada (FNV) +9%, and Newmont (NEM) actually -5% given the company’s increased production costs:

Producing a rather sideways swath since September is the Economic Barometer, even as the S&P 500 on balance manically runs up and away from it.  This past week’s light set of Econ Baro metrics included for December an improved Institute for Supply Management Manufacturing Index, but a drop in the month’s Chicago Purchasing Managers’ Index.  Too came a better November reading for Pending Home Sales, but a zero growth pace for the month’s Construction Spending.  Put it all together — and economically — ’tis “Happy Blah Year, America!”

To which we earlier alluded, the Dollar’s been on a three-month up run.  And you know the drill:  as the Dollar is getting the substantive bid, everything else (save for Oil) is in a skid.  By the following graphic we go ’round the horn for all eight BEGOS Markets with their daily bars from one month ago-to-date.  Thus with the exception of Oil, the seven other components all are sporting negative grey regression trendlines, the baby blue dots depicting the day-to-day consistency of those respective trends.  (Pssst:  are you still in the stock market?  Just askin’…)  Here’s the graphic:

Turning to the 10-day Market Profiles for the precious metals, both Gold on the left and Silver on the right have moved above their respective mid-points.  Gold’s most dominant trading support price by volume is 2630, whilst for Silver ’tis 30.00:

And toward wrapping 2025’s first piece, here we’ve Gold’s monthly bars across the past 15 years.  Were Gold’s “Infamous Triple Top” to permanently hold, preceding stratified layers basically become obsolete.  ‘Course a -50% Gold correction would plop price back into the 1300s.

“Oh really, mmb, c’mon man…”

To be sure, Squire, hardly do we anticipate such demise from here.  Yet historically, Gold has suffered through some serious spills.  More recently was price’s -23% decline from August 2020 into November 2022; precedent to that was the -46% tumble from September 2011 into December 2015; and of course, too, was Gold’s -68% fall from the skies running January 1980 into June 1982.  But we shan’t lose any sleep over such, especially should 3262 be in this year’s balance:

So there’s our Gold forecast high for ’25:  3262.  And honestly it may be “A Bridge Too Far” –[United Artists, ’77].  But again per our premise of Gold gaining a third consecutive up year and as guided by the “expected yearly trading range”, 3262 seems a reasonable target from a prudent cash management perspective.

Indeed hardly do we have much negative concern over Gold.  Per the opening Gold Scoreboard’s valuation level of 3809, Gold is looking ever so attractively fine given inevitably price has so much more to climb.

But when it comes to the stock market as measured by the S&P 500, we remain significantly concerned (understatement).  Remember old “Fritz” Hollings’ (D-SC) famous line from back in his time?  “There’s too much consumin‘ goin’ on out there!”  To peruse today’s FinMedia one might instead say “There’s too much euphoria goin’ on out there!”   We read (paraphrasingly) that:  “The S&P’s the place to be!” “Without AI you cannot be!” “Trump to put Bitcoin in orbital spree!”  Oh gee.

Today finds the S&P 500’s “live” price/earnings ratio at 46.8x, at least double any historical rationale; the Index’s market cap is $52.4T for which the supportive liquid money supply is “only” $21.7T.  (For you WestPalmBeachers down there, that means you sell your stock, but you might not get the money).  Oh gee.

AI seems to have given up on trying correctly quote the price of Gold; you may recall our asking AI what the price was three different times during the course of last year, the response in each attempt being wrong by $100s; today rather than quote a price, it simply says that “it is best to check a financial news website.”  Oh gee.

Dear old Bitcoin in round numbers essentially is 90% mined and trading at $100k/coin.  Consensus is ’twill reach $250k/coin this year.  “The Trumpster” is purportedly bidding (on behalf of the insolvent USA — remember “Old Yeller” needs money by mid-month) for one million coins, i.e. $100 billion-worth, which actually is not that much money given ’tis roughly what the federal government spends per week.  But will you be offering to the nation your Bitcoin, and at what ask?  Oh gee.

So with 3262 potentially in the year’s balance, can you imagine not being with Gold?  Oh gee!

Cheers!

  …m…

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

The Gold Update: No. 789 – (28 December 2024) – “Gold’s Weak Wend Toward Year-End”

by

The Gold Update by Mark Mead Baillie — 789th Edition — Monte-Carlo — 28 December 2024 (published each Saturday) — www.deMeadville.com

“Gold’s Weak Wend Toward Year-End“

Gold just recorded its seventh down week in the last nine, price settling yesterday (Friday) at 2637 … and yet that is higher than Gold’s settle six weeks ago at 2567 on 15 November.

To be sure, Gold’s 21-day (one month) linear regression trend is negative, and as next shown, the red-dotted weekly parabolic trend remains Short, now seven weeks in duration.  Across the past nine weeks, Gold’s seven down bars are in red and its two up bars are in green:

“So what you are saying mmb is that price is going down even though it is going up, right?” 

In support of Squire, ’tis not an effect of excessive eggnog imbibement.  Rather — from a strictly quantitative aspect — we’ve merely a mathematical marvel that makes you go “hmmm…”  Yes, the parabolic trend is Short, price therein having achieved but two up weeks.  And yet Gold seems more hesitant rather than in decline.  Still, the climb from the present 2637 level to eclipse the ensuing week’s “flip-to-Long” level at 2772 is +135 points.  Given Gold’s expected weekly trading range is 85 points, look for this trend to likely remain Short through New Year, barring any buying extravaganza.

Too, as noted in recent missives, Gold’s weekly MACD (moving average convergence divergence) continues to negatively expand as next displayed.  Again, through having measured prior MACD declines, ‘twouldn’t be untoward to see Gold tap the upper 2400s on this run, (our preference of course being that it not so do):

Thus is our near-term downside Gold view.  Now let’s consider the near-term upside view.  If for some unconscionable reason you missed reading yesterday’s Prescient Commentary, from that we’ve this key snippet:  “…The Market Magnets of all three elements of the Metals Triumvirate appear poised for penetration to the upside, meaning prices may get a lift into New Year…”  Let’s explain.

“You mean for your so-called ‘WestPalmBeachers down there’, mmb?”

‘Twould appear Squire is already getting a giddy dose of New Year’s penetration, but to his valid point.  The “Metals Triumvirate” simply refers to Gold, Silver and Copper, each of which maintains a daily, updated page on the website.  Our proprietary “Market Magnet” measure is justifiably named as price inevitably is drawn back to its Magnet.  Specifically as a trading tool however, upon price penetrating its Magnet, further near-term price follow-through is the expected rule rather than the exception.  To wit the following graphic (a tad tight in this display, but viewable as well at the website):

The upper panel for each market tracks its daily closing price (thin line) from three months ago-to-date; the thick line is the Magnet.  The lower panels are the oscillative difference of price less Magnet.  And what is evident in all three cases is price now poised to penetrate Magnet to the upside, suggesting a rally for the metals into New Year.  (Again, you can monitor such daily progression at the website).

Meanwhile, struggling for further upside progression — albeit duly holding its own through autumn — is the Economic Barometer.  This past week was very muted for the Baro given the wee slate of just four incoming metrics.  Therein of note, December’s Consumer Confidence declined on the heels of November’s Durable Orders having shrunk; however, that month’s New Home Sales did increase.  So “When the Econ Baro comes bob-bob-bobbin’ along…”–[hat-tip Harry Woods, ’26], there appears little impetus for the Federal Open Market Committee’s voting to again nudge lower its Bank’s FundsRate come the 29 January Policy Statement.  Moreover as herein depicted a week ago, StateSide inflation is still running a bit hot for the Fed’s liking.  Either way, here’s the Baro:

And from the bobbin’ Baro we return to burrowin’ Gold per the following two-panel display of price’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  Although in this missive’s close we’ll cite Gold typically having an upside bias for the final two days into year-end, below we’ve the baby blue dots of trend consistency breaking lower.  As for the Profile, a bevy of notable support and resistance levels are labeled:

Continuing to be the like case is that for Sister Silver, her “Baby Blues” (at left) accelerating to the downside along with more resistance than support per her Profile (at right):

To close, we’ve two full trading days remaining for 2024. Conventional wisdom presumes “Oh this is gonna happen!” and “Oh that is gonna happen!” as year-end market hysteria unfolds.  From our purview, we don’t think much at all is “gonna happen”.

To break it down a bit for those of you scoring at home:

  • Notwithstanding Gold’s weak wend toward year-end, century-to-date with just two trading days left in the balance, price’s median percentage change either way has been 0.7%.  The bias is to the upside, 18 of those 23 yearly finishes being higher for the two days.

  • But as to the S&P 500 with just two trading days left in the balance, its median percentage change either way has been 0.6%, the bias being to the downside as 14 of those 23 two-day finishes were lower.

“So mmb, at Monday’s open we go Long Gold and Short the S&P for two days, eh?”

Tempting as ’tis, Squire, the best way always to go is with prudent cash management.

Regardless, as you know, the old saying is “As goes January so goes the year.”  And the month’s Main Event commences 14 January upon U.S. Secretary of the Treasury Janet “Old Yeller” Yellen begging for dough upon which to draw to pay obligations on the nation’s debt.  As was so brilliantly scripted in Paramount’s ’64 feature “Paris When It Sizzles”, the Secretary’s performance shall be that “Ultimate and inevitable moment. The final, earth-moving, studio-rent-paying, theatre-filling, popcorn-selling” plea to Congress for “extraordinary measures” to avoid default.

‘Course, the best anti-default asset is Gold!

Next week we’ll have 2024’s final standings of the BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500) along with your favourite month-end graphics, (plus two trading days into 2025).  Until then:

Happy Sizzlin’ New Year and Cheers!

  …m…

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

The Gold Update: No. 788 – (21 December 2024) – “Gold Seeks Charisma ‘Round Inflation’s Enigma”

by

The Gold Update by Mark Mead Baillie — 788th Edition — Monte-Carlo — 21 December 2024 (published each Saturday) — www.deMeadville.com

“Gold Seeks Charisma ‘Round Inflation’s Enigma“

Welcome to winter as we type literally through the soltice here at 10:21 CET.  And let’s start with a “Thumbs Up!” to one Elizabeth Morgan Hammack, graduate of THE Leland Stanford Junior University, today President of the Federal Reserve Bank of Cleveland, and who — as a voting member of the Federal Open Market Committee — had the “cojones” to not go in favour of last Wednesday’s -25bps reduction for the FedFundsRate to its new 4.25%-4.50% Target Range.

“So are you taking credit for her having read last week’s Gold Update, mmb?” 

Heavens no, dear Squire.  Rather, we’re just favourably impressed that — instead of being FinMedia-led as seems is the Fed — Ms. Hammock can do math sufficiently such as to realize inflation has been going the wrong way as precisely depicted in our prior missive.  Brava Beth!

Yet such credit due, suddenly yesterday (Friday) the inflation situation completely whirled ’round down!  November’s so-called “Fed-favoured” inflation gauge — the mouthful entitled Personal Consumption Expenditures Prices Index — came in at a wee +0.1% at both the headline and core paces.  That materially differs from the Consumer Price Index’s readings of +0.3% (headline and core) and the Producer Price Index’s respective +0.4% and +0.2% readings.  ‘Course, whilst both the CPI and PPI are calculated by the U.S. Bureau of Labor Statistics, the PCE is figured by the U.S. Bureau of Economic Analysis.  Thus by the BLS gauge, inflation is increasing, whereas by the BEA, inflation is decreasing.  Hence our title including “Inflation’s Enigma” as trust in the overall picture is a bit of a stigma.  Powell & Co. may be pleased over November’s PCE, but the averages clearly state inflation is higher as in the table we see:

In turn challenged by it all, Gold is doing its darnedest to seek some charisma.  Despite price’s rampant volatility, Gold settled the week at 2641, “net net” again being little changed as we’d seen the week prior.  Two weeks ago, Gold traced 112 points for a net change of only +11; now this past week, Gold traced 87 points for a net change of only -25.  Thus Gold’s net two-week change is but -14 points. Reprise Chris Isaak’s tune from back in ’95: “Goin’ Nowhere“

That warbled, Gold has wobbled on balance a bit lower within the context of its ongoing parabolic Short trend per the weekly bars as next shown from a year ago-to-date.  Indeed, this past week’s low — 2597 — was the lowest level traded since 2569 back on 18 November.  Further upon this Short parabolic trend’s commencement, you may recall our penned suggestion of “…Gold revisiting the upper 2400s on this run…” given the weekly MACD (moving average convergence divergence) also then having crossed to negative, which since has continued to deteriorate.  Rather anti-charismatic, that.  To the bars and rightmost red-dotted Short trend, now six weeks in duration:

Yet both Gold and the S&P 500 celebrated yesterday’s release of the benign PCE:  intraday low-to-high Gold gained +1.9% and the S&P +2.6% as the increasingly inflationary aspects of the CPI and PPI were swiftly forgotten.

‘Course, the S&P 500 put in one of the wildest week’s points-wise in its 67-year history:  Wednesday’s net S&P loss of -178 points ranks fifth worst since the Index’s inception in March 1957; (on a percentage basis, the day’s -2.9% loss ranks 132nd-worst since at least as far back as 1980).  Notwithstanding Friday’s PCE-induced rally, Wednesday was a torrid reminder of just how fragile the stock market has become;  Moreover, the “live” price/earnings ratio of the S&P 500 settled the week at 46.5x.  But until COVID’s “bonus” $7T finds its way to better-returning investments, (i.e. short-term U.S. debt currently yielding more than triple that of the S&P), the Great Game of Chicken continues per this image from the “Marked-to-Market Everyone’s a Millionaire Dept.”

Hardly “chicken” of late has been the Economic Barometer, which (along with the increasing CPI and PPI) does justify the Fed to at least “pause” rate reductions come 29 January’s Policy Statement from the Open Market Committee.  And as you regular website readers know, we emphasize the leading characteristics of our analytics.  Two of note from this past week were in the daily Prescient Commentary.  From Tuesday:  “…the S&P … is so overcooked to this point both fundamentally and technically that some degree of downside hoovering awaits; perhaps ’twill be a ‘sell the priced-in’ Fed announcement tomorrow”.  Bingo.  From Thursday: “…Leading (i.e. ‘lagging’) indicators … are supposed to be mildly negative, but an ‘unch’ or mildly positive read wouldn’t surprise us given the Baro’s recent resilience.”  Bingo.

‘Tisn’t magic; rather ’tis merely doing the math.  And the Baro’s incoming metrics for November have been sufficiently buoyant for a gain in the Conference Board’s Leading Indicators of +0.3%; but instead, the “expert consensii” were looking for a loss of -0.1%.  “How’s that Ivy League education workin’ out for ya?”  

In moving to the graphic, of the past week’s 20 incoming metrics, there were notable improvements in Retail Sales,  Existing Home Sales and Building Permits.  Too, Personal Spending increased, albeit its underlying Income slowed.  As well on Friday, December’s Philly Fed Index boffed the Baro a bit, but its overall stance has been fairly firm since Late summer:

Meanwhile, precious metals’ prices across the past three months have been skiing the bumps as below depicted for Gold on the left with Silver on the right. And as to their respective trend’s consistency, the “Baby Blues” are tracking nearly identically, meaning of course that Sister Silver —  rather than adorned in her industrial metal jacket (as when aligned with Cousin Copper) — is instead sporting her white-on-white precious metal pinstripes.  Gettin’ some air there, baby!

Too, because of their downhill runs, prices at present are quite low within the 10-day Market Profiles for Gold (at left) and for Silver (at right).  Notable high volume support and resistance prices are as labeled:

Thus as we glide into winter and the first of two back-to-back abbreviated trading weeks, let’s assess the state of The Stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3788
Gold’s All-Time Intra-Day High:  2802 (30 October 2024)
2024’s High:  2802 (30 October 2024)
Gold’s All-Time Closing High:  2799 (30 October 2024)
The Weekly Parabolic Price to flip Long:  2777
10-Session “volume-weighted” average price magnet:  2681
Trading Resistance:  notable nearby Profile nodes 2653 / 2670 / 2679 / 2690
Gold Currently:  2641, (expected daily trading range [“EDTR”]:  44 points)
Trading Support:  2634 / 2620 / 2608
10-Session directional range:  down to 2599 (from 2761) = -162 points or -5.9%
The 300-Day Moving Average:  2329 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

In sum, Gold whilst seeking some charisma at least technically still looks to falter a bit; but fundamentally as the late great Richard Russell would remind us, there’s never a bad time to buy it.  This gem to wit, courtesy of The Royal Mint:

Indeed, Merry Everything to Everybody Everywhere and don’t forget the Gift of Gold!

Cheers!

  …m…

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

The Gold Update: No. 787 – (14 December 2024) – “Gold Does the Spike n’ Sink”

by

The Gold Update by Mark Mead Baillie — 787th Edition — Monte-Carlo — 14 December 2024 (published each Saturday) — www.deMeadville.com

“Gold Does the Spike n’ Sink“

Gold’s net change for this past week was a wee +0.4%; yet ’twas hardly mute en route.  Prior to settling yesterday (Friday) at 2666, price was boffed about by another geo-political “spike n’ sink”, further impinged by November’s StateSide inflationary data.  Here ’tis:

Briefly as to the geo-political “spike n’ sink” — and you regular readers well know this — when Gold “spikes” on geo-political nervousness as was the case this past week over Syria — price zooms upwards.  Then swiftly it “sinks” as such jitters fall from the headlines and short-term memories move on to the next event.

But when it comes to inflation — even as the FinMedia and investing community couch it as “benign” — you cannot fool the Dollar, nor the Bond, nor Gold.  For per the U.S. Bureau of Labor Statistics, inflation at both the retail and wholesale level is increasing, indeed moving further up and away from the Federal Reserve’s desired target of +2.0%.  Here’s what we have thus far for November:

Obviously to complete the above table, we await November’s “Fed-favoured” Personal Consumption Expenditures Prices Index due next Friday, 20 December, which conveniently for the central bank is two days after its Open Market Committee’s 18 December Policy Statement.  Regardless, what does our table thus far depict? 

At its foot we see the average 12-month summation of the elements is +2.8%; through October ’twas +2.6%… Whoops!  Moreover, the November annualized average is +3.6%; that for October was +3.0%… Whoops!  Time to pick up the telephone and call the Fed:  “Hey Jay!  We’re goin’ the wrong way!” 

And yet, they’ll likely lop another 25bps off the Funds Rate come Wednesday, as absent of math, the modern-day Fed apparently acts on optics.  “A cut is expected?  A cut we shall do!”  And given rate cuts effectively increase the money supply through the Fed window, more Dollars distributed into the monetary system (barring economic efficiency) lead to more inflation.  For more are worth less; the “wrong way”, indeed. 

However, to read the also math-challenged FinMedia, increasing inflation is not their take.  Hat-tip Bloomy, which in response to rising retail inflation (the Consumer Price Index) ran on Wednesday with “Stocks Rise After CPI Gives Fed Green Light to Cut”.  Really?  The CPI quickened its October pace of +0.2% to +0.3% for November … which annualized as noted is +3.6% … which further distances itself from the Fed’s +2.0% target.  That’s a green light to cut? 

But wait, there’s more:  into Wednesday evening Bloomy embellished its response by adding “US Inflation in Line With Forecasts Solidifies Bets on Fed Cuts”.  Really?  We can only guess that —  again mathematics aside — merely meeting forecasts is all that counts, even as inflation increases.  This is adroitly akin to contemporary stock market valuation:  the substance of earnings (or lack thereof) no longer has meaning, just as long as they “beat estimates”.  Thus Syria + CPI = Spike. 

‘Course come Thursday came the negative news.  Wholesale inflation (the Producer Price Index) for November recorded a +0.4% pace, the fastest across the past seven months…  Whoops!  But whilst the FinMedia rather skirted the issue, not so did the Dollar, nor the Bond nor Gold, the rationale being that perhaps the Fed shan’t cut.  In turn, the Dollar got the Bid, the Bond did the skid, and Gold hit the lid.  PPI + Rate Doubt = Sink.

So as we go to Gold’s weekly bars from a year ago-to-date, the rightmost closing nub shows barely a net change from a week ago — despite the “spike n’ sink” — as the parabolic Short trend continues.  Today at 2666, Gold sits -116 points below the ensuing week’s flip-to-Long level of 2782; thus if you’re scoring at home, given Gold’s expected weekly trading range is now 90 points, ’tis likely the Short trend shall still be in place in a week’s time:

Now as noted, we expect the Fed — wrongly — to cut.  ‘Tis even priced into the FedFundsFutures despite the firming of the Dollar — rightly — and attendant weakness in the Bond and Gold.  And truly for the trader, mis-valuation breeds opportunity; the trick however is to remain solvent until everyone else sees it. 

To wit for the Casino 500, its “live” price/earnings ratio settled yesterday at a spritely 47.8x.  Fundamentally, that is an overbought danger which has become indescribable.  Technically, we’ve also these year-to-date stats:  the S&P has recorded 241 trading days; ’tis been “textbook oversold” for just 28 days, at a neutral stance for 51 days, and “textbook overbought” for 162 days, including through 42 of the last 46 days.  To be sure, we’re taught “the market is a hedge against inflation.”  We just displayed annualized inflation running at +3.6%; the S&P year-to-date is +27%.  But we get it:  all that COVID-elicited $7T is still sloshing around in the stock market.

“Plus, it’s just in time for the Santa Claus Rally, eh mmb?” 

So sayeth conventional wisdom, Squire.  But it doesn’t always come to pass.  There remain seven trading days until Santa’s arrival.  How has the S&P historically fared for such seven days?  We went all the way back to 1980 (which for you WestPalmBeachers down there covers the past 44 years).  And yes, there generally is an upside bias for the seven trading days to Christmas, yet:  in 13 (30%) of those years, such seven-day stint was net negative for the S&P.  Thus “buyer beware”.

Either way, the frightening overvaluation of the S&P 500 reminds us yet again that “marked-to-market everyone’s a millionaire; marked-to-reality nobody’s worth squat.” 

Always worth its plot however is that of the Economic Barometer.  As many of you know, the Baro across its first 22 years essentially led the direction of the stock market as measured by the S&P 500.  But then came COVID after which such relationship ceased.  (Did we mention the S&P is overbought?)  Going inside the data of the past week’s 11 incoming metrics for the Econ Baro, period-over-period saw three improve, two maintain, and six worsen, the latter leaning in favour of a Fed cut as the analytics included a significantly lower revision to Q3’s Unit Labor Costs, plus the highest level of Initial Jobless Claims across the past nine weeks.  Besides, the FinMedia have already ordered (as usual) the Fed to cut its Funds Rate:

 

Indeed speaking of rate, that at which Gold did the “spike n’ sink” was quite quick this past week.  ‘Tis again very evident below in the left-hand panel of price’s daily bars from three months ago-to-date, the baby blue dots of trend consistency just Friday having kinked lower.  In the right-hand panel we’ve Gold’s 10-day Market Profile, the range of which spans 124 points; currently 2666, price sits just above its most commonly traded handle — labeled at 2664 — across the fortnight:

And we’ve the same drill for Silver, her “Baby Blues” at left also having just kinked lower yesterday.  Then at right per her Profile, she is sitting on her last bastion of near-term support at 31.00.  Hang in there Sister Silver!

Thus into a very busy “Fed Week” we go during which 19 metrics come due for the Econ Baro, 10 that are scheduled prior to the FOMC’s Policy Statement late Wednesday.  Since the FinMedia have assured us the Fed will cut, is that already priced into Gold?  But then again, hearsay has it the Bank come 29 January shall “pause” post-Santa Claus; so hold any applause.

And always make sure you’ve some Gold in your claws!

Cheers!

  …m…

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

The Gold Update: No. 786 – (07 December 2024) – “Gold Boring; S&P Warning”

by

The Gold Update by Mark Mead Baillie — 786th Edition — Monte-Carlo — 07 December 2024 (published each Saturday) — www.deMeadville.com

“Gold Boring; S&P Warning“

First, this tease:  the last time the S&P 500 reached (by our quant-crunching) such current duration of being extremely “textbook overbought”, the mighty Index fell …(drumroll)… -26%.  More on that later.

To Gold:  on the heels of last week’s brief missive, here we go as promised with what otherwise would normally be our “month-end “graphics-rich edition, in this case right up-to-date through yesterday, 06 December.  And as entitled “Gold Boring”, clearly for price ’twas a snoozer of a week, the -1.7% high-to-low range ranking fourth narrowest year-to-date toward our yellow metal settling yesterday (Friday) at 2655 in recording its fifth weekly loss in the last six.

Regardless, it now being a week past November’s month-end and with just four editions of The Gold Update remaining in 2024, let’s straightaway go to our BEGOS Markets’ Standings since New Year.  And as was the case at October’s end, the precious metals remain upon the top two steps of the podium followed by the zany, earnings-lacking, non-monetarily-supported S&P 500 in third place.  Too, from the “Gold Plays No Currency Favourites Dept.”, note the Dollar Index is nearly +5% year-to-date, with Sweet Sister Silver still leading the percentages pack:

But in turning to Gold’s weekly bars from a year ago-to-date, the present red-dotted parabolic Short trend has completed a fourth week in duration, something that has not occurred since the 14-week run of being Short back in 2023 from that year’s weeks ending 26 May through 25 August.  And per the graphic’s lower panel, to nix a fifth week of Short trend, price need trade up through 2786, (which is just -16 points shy of Gold’s 2802 All-Time High recorded this past 30 October).  Strictly by Gold’s expected weekly trading range of 88 points, 2786 at least imminently is “out of range”.  Either way, this year-over-year image remains fabulous, the yellow metal up +30%:

Now as would normally be our month-end wont, along with Gold’s +30% year-over-year gain, let’s next see how it compares with the performance tracks of highly visible precious metals’ equites. Thus from worst-to-first we’ve Newmont (NEM) +4%, Franco-Nevada (FNV) +13%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +21%, Gold itself as noted  +30%, the Global X Silver Miners exchange-traded fund (SIL) +41%, Pan American Silver (PAAS) +45%, and topping the list Agnico Eagle Mines  (AEM) +58%.  On three (one, two, three):  “Way to go, Agnico!”

Next we drill down into the 10-day Market Profiles for Gold on the left and for Silver on the right.  And per prices’ present positioning, we can see that Silver has been fairing a bit better.  Two weeks ago, the Gold/Silver ratio was 86.6x, having since been reduced to now 84.3x, substantiated by Silver having increased across said stint by +2.0% whereas Gold has slipped -0.6%.  ‘Course, it remains that Gold relative to Dollar debasement is very cheap and in turn, relative to Gold, Silver is super cheap.  That noted, here’s the rather congested (certainly for Silver) current view:

As to Gold more broadly, here’s our updated depiction of Gold’s layered structure across the past 15 years, the rightmost monthly bar being December’s initial week.  Our forecast high for this year — couched last New Year as “conservative” — was for a run from year-end 2023’s settle at 2072 to 2375; instead, Gold went well on to reach an All-Time High at 2802.

“Well, you were right until it passed 2375, mmb…”

Thanks, Squire:  we’ll take all the shameless plugs we can get, (courtesy of the “We Love It When We’re Wrong Dept.”)  Here’s the graphic.

Now as we glide toward our opening S&P tease — indeed a true scare for the unaware — let’s next go ’round the horn for all eight BEGOS Markets during the past 21 trading days (one month) along with each component’s grey diagonal regression trendline and “Baby Blues” which depict the day-to-day consistency of trend.  Obviously the best of the bunch has been the Bond, (for which in our 20 November Prescient Commentary we penned “…The Bond’s ‘Baby Blues’ [see Market Trends] have … moved above their key -80% axis:  thus we look to still higher Bond prices near-term…”  Notably, the trend of the S&P 500, too, is on the rise, albeit therein the “Baby Blues” are faltering.  Here’s the whole gang:

And so to the entitled “S&P Warning” we go.  As graphically follows, the S&P 500 is the red line along with the Economic Barometer from one year-ago-to-date.  Like you veteran readers and website devotees know, from its inception back in 1998 up to COVID in 2020, the Econ Baro would broadly lead the direction of the S&P.  ‘Course upon COVID and the subsequent mass printing of more money, such leading phenomenon has since ceased.  For with the +44% in additional Dollars swiftly injected into the StateSide liquid financial system came the like $7 Trillion increase to the market capitalization of the S&P 500, such that ’tis become impossible for it to go down, let alone materially despite the Baro having fallen through much of the year:

“But mmb, you said at the beginning something about a 26% fall in the S&P…”

So here’s the skinny, Squire.

Going away back to the days of AvidTrader (and indeed by this measure since the year 1980), when the S&P 500 gets a bit far afield from itself — either up or down — we quantitatively couch it as mildly, moderately or extremely “textbook overbought” or “textbook oversold”.

Through yesterday’s (Friday’s) S&P 500 settle at 6090, ’twas the eighth consecutive day of being extremely “textbook overbought”.  And across the past 45 calendar years, on a mutually-exclusive basis, such eight-day run has only occurred 14 other times.  Doesn’t sound like much right?

But wait, there’s more:  the last time this current condition came to fruition was in November 2021 from which the S&P’s fall within one year was -26%, (inclusive of recession fears — and the Econ Baro today is significantly lower than ’twas then).  The prior occurrence came in 2019 from which the fall within one year was -25%, (inclusive of the 2020 COVID mini-crash).

And yet the inevitable next time ’round, a like percentage drop might actually be considered small. Why?  Don’t forget:  had COVID never happened, the S&P today would at best be around 3000 and all would be as happy as clams.  Instead, today ’tis at 6000 with the honestly-calculated price/earnings ratio now 46.9x, which is double the norm, and triple what was taught as “acceptable” in B-school.  For you WestPalmBeachers down there, that means company earnings haven’t increased commensurate with stocks prices.  To wit we update this closing graphic of the S&P 500 across the past 50 years with the extrapolated regression channel had COVID never happened.  Fortunately however, earnings are no longer meaningful for stocks’ pricing:

‘Course, your “expert” all-in equites money manager has the appropriate protection in place, right?  (Pssst … and given the current $53T market cap of the S&P is supported by a liquid U.S. money supply of “only” $22T, broker-issued IOUs will be made available, right?)

“Got Gold?”

Cheers!

  …m…

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

The Gold Update: No. 785 – (30 November 2024) – “Gold in 60 Seconds (IV)”

by

The Gold Update by Mark Mead Baillie — 785th Edition — Cortona, Arezzo, Toscana — 30 November 2024 (published each Saturday) — www.deMeadville.com

“Gold in 60 Seconds (IV)“

Saluti dalla Toscana!  As indicated a week ago, our missive this time ’round is a brief read, but to the point; (our usual month-end graphics content shall instead be to-date in a week’s time).

Gold settled the abbreviated trading week yesterday (Friday) at 2674, -128 points below its All-Time High of 2802 (30 October).  But price’s points volatility is well above normal:  the average high-low weekly trading range across these past four is 132 points, such like average not seen since that ending 09 April 2020 as COVID unsettled the investing world.

Regardless of Gold’s recent careening about, the current weekly parabolic Short trend just completed its third week.  And should price in this ensuing week not eclipse up through 2791 (i.e. +117 points above present price), such Short trend shall have completed a fourth consecutive week for the first time since that ending 25 August 2023.  Here are Gold’s weekly bars and parabolic trends from a year ago-to-date:

 

Also as anticipated in our prior missive, the Core Personal Consumption Expenditures Price Index would be this past week’s key metric.  Such “Fed-favoured” inflation gauge registered for October at +0.3%, which annualized of course is +3.6%, thus exceeding the Federal Reserve’s preference for a +2.0% pace.  And per our table for October’s inflation measures, the Core PCE’s actual 12-month summation of +2.8% too remains Fed-excessive, as does every cell in the graphic, save for the headline Producer Price Index:

Generally, Gold responds positively to Fed benevolence.  And come the Open Market Committee’s next Policy Statement on 18 December, whilst ’tis not set in stone for a FedFunds rate cut, the conventional wisdom “assumption” shall look to another -25bp reduction.  For after all, Fed policy tends — indeed is “expected” — to trend.  And a Fed cut ought redound well for Gold, perhaps reversing the weekly parabolic trend from Short back to Long and further to a new All-Time High just in time for Christmas.

Further, the Economic Barometer remains rather steady through recent months.  Were it instead to be rising, it might give pause for the Fed to — well — pause.  Moreover, 33 metrics still are due for the Baro prior to the next Fed meeting in two-and-a-half weeks’ time.  Alors, on verra.  Here’s the Baro:

Thus in brief this week for Gold, our bottom line is to remain wary of price — at least technically — sporting some degree of confusion given the aforenoted volatility.  To be sure, the weekly parabolic trend is Short, and by Gold’s page at the website, the 21-day linear regression trend is negative; however both Gold’s “BEGOS Market Value” and Market Magnet appear at present non-committal as to near-term direction.  Yet to better one’s analytical perspective, by our Market Rhythms page, there are presently 11 for Gold which qualify to make that list, (as updated daily).

‘Course — fundamentally — priced today at 2674 versus the opening Scoreboard’s debasement valuation of 3778 reminds us that broadly:  Gold is still ever so cheap!

Ciao!

  …m…

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

The Gold Update: No. 784 – (23 November 2024) – “Gold’s Contra-Trend Rally; S&P’s Earnings(less) Tally”

by

The Gold Update by Mark Mead Baillie — 784th Edition — Monte-Carlo — 23 November 2024 (published each Saturday) — www.deMeadville.com

“Gold’s Contra-Trend Rally; S&P’s Earnings(less) Tally“

Let’s begin with Gold, courtesy of the “We Love It When We’re Wrong Dept.” given price having just recorded its best week (by net points gained) in nearly 45 years!

For following last week’s piece (“ ‘Tis No Surprise, Gold’s Current Demise “) replete with our “…suggesting Gold revisiting the upper 2400s on this run…”, Gold instead posted five consecutive up days toward settling yesterday (Friday) at 2718.  Not only was it a beautiful “thAng”, but it also lends credence to our time-honoured quip that “Shorting Gold is a bad idea”.

Still — speaking of Short — the week’s five-day rally was not sufficient to flip the fresh parabolic Short trend on Gold’s weekly bars back to Long per this next graphic.  Indeed to so do in the ensuing week, price would need eclipse the 2797 level as below shown.  ‘Course as we’ve stated of late, Gold’s prior three weekly parabolic Short trends lasted but three weeks apiece.  And as fresh as is the new Short trend, nonetheless, ‘twas a terrific week for the yellow metal.  Price’s net gain on a percentage basis of +5.9% was the best since that ending 17 March 2023 — and by the net gain of +151 points — ’twas Gold’s best week since the “Wonder Week” ending 18 January 1980 upon price gaining +195 points from 628 to 823 (+31%).  A lot of today’s financial “pros” weren’t around then (and it shows) … yet we were, (as too, for you Silver buffs,  were Nellie, Willy and Lamar Hunt … but we digress).   Here’s the year-over-year graphic:

How wonderful to have been wrong, indeed!  And yet — until the weekly parabolic trend whirls back up to Long — we’ve entitled this past week’s fabulous rise as a “contra-trend rally”, (which for you WestPalmBeachers down there means Gold is rising within a broader down trend).  To wit, this next two-panel graphic is gleaned from what we refer to as our best Market Rhythms.  On the left is Gold by the day since 22 October:  notice the MACD (moving average convergence divergence) has just crossed to positive.  On the right, however, is Gold by the week since 06 June:  therein (as we first presented last week) the MACD had just crossed to (and remains) negative.

“So which one is up, mmb?”

Well, Squire, ultimately both!  But for the present, the ensuing week brings the Federal Reserve’s so-called favourite gauge of inflation:  Core Personal Consumption Expenditures Prices for October.  And the consensus there is it continues to run “hot” at an annualized pace of +3.6% which obviously surpasses the Fed’s ongoing target for +2.0%.

Too, there’s nearly four weeks to go before the Open Market Committee’s next Policy Statement (18 December), prior to which we’ll get the U.S. Bureau of Labor Statistics’ read on November inflation at both the retail and wholesale levels.  And should those metrics not be benign, does the Fed, rather than again cut its Funds Rate, leave a lump of coal in our Christmas stocking?  That would likely be a Gold negative.

Still, from the contra-trend conflict comes the website’s updated Market Value chart for Gold from a year ago-to-date.  When last herein viewed a week ago, price had negatively crossed beneath its smooth valuation line (borne of price movement relative to the five primary BEGOS Markets, i.e. the Bond  Euro / Gold / Oil / S&P 500), the “rule of thumb” there to expect further price decline.  But from the “Hold Your Horses! Dept.”, price this past week reversed course upward to positively cross back above the smooth valuation line.  Nothing like seeing broadly undervalued Gold getting the bid!  Here’s the graphic:

“But why the sudden turnaround, mmb?”

Squire, for all the usual “conventional wisdom” reasons, depending upon one’s media source.  “Oh there’s geo-political tension favoring safe-haven Gold!”  “Oh Bitcoin is pulling Gold higher ’cause Trump’s gonna pair ’em!”  “Oh Goldman Sachs says Gold $3,000!”  We’ll stick with the foundational truth:  currency debasement, even as nothing moves in a straight line.  To be sure, 1,132,033 December Gold contracts were purchased last week … meaning 1,132,033 were sold.

Meanwhile, speaking of Bitcoin, its December futures contract hit an all-time high yesterday of $101,100.  Come 27 December is the contract’s expiry, which unlike Gold is settled financially rather than physically, (just in case you’re scoring at home and think you have to make delivery of Bitcoin).  “Hey Mabel!  I thought you said you stacked it up in the closet!”

Not scoring as well at present is the Economic Barometer.  This past week brought but eight metrics into the Baro, only three of which improved period-over-period.  Notable amongst the retreaters was the lagging indicator of the Conference Board’s Leading Indicators for October.  The negative reading was, of course, warmly greeted by the S&P, which then spent the balance of Thursday and Friday moving higher, “because the Fed has to cut, ya know.”  Yeah, we know.  “Got Gold?”  Here (featuring some old “friends”) is the Econ Baro along with the S&P 500 from one year ago-to-date:

And of course as has been our wont seemingly forever, the “live” price/earnings ratio of the S&P 500 remains hideously high, now 44.6x.  It stays in such silly territory because as the S&P trades higher, earnings don’t keep pace.

Indeed, Q3 Earnings Season just concluded.  Of the S&P’s 503 entities, 447 reported within the seven-week stint.  64% of the bottom lines bettered themselves over Q3 of a year ago … which means 36% did not … which makes us wonder why they’re even in the world’s wealthiest index … which brings us to the following graphic.

It covers the last 30 quarterly Earnings Season for the S&P.  The violet line is the percentage of companies beating the broker’s marketing tool known as “estimates“.  The green line is the percentage of companies that actually made more money, (an aspect seemingly taboo for the broker to reveal).  And as for the dashed green line, ’tis the evolving average of percentage improvement from the prior year’s like quarter.  That average today is 66%.  Exclude COVID year 2020 and the average is 68% … which is why we’ve been regularly characterizing this past Earnings Season as “sub-par” … which is why the high P/E refuses to die … which is why our title includes “The S&P’s Earnings(less) Tally”, indeed.  Take heed:

Take heed, too, over Gold’s contra-trend rally.  ‘Twould be statistically off the end of the Bell Curve for Gold to record a further consecutive weekly parabolic Short trend of just three weeks duration.  That noted, one cannot argue with the following two-panel display featuring Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  Gold’s “Baby Blues” of linear regression trend consistency now curling upward without having quite reached down to their -80% axis is quite the bullish suggestion.  And per the Profile — atop which Gold sits — there are plenty of high-volume support prices as labeled:

Hardly as firm as that for Gold is the like picture for Silver.  Save for last Monday, her trading week at best was rather namby-pamby, albeit her “Baby Blues” (at left) piercing up through the -80% axis typically is a “buy” signal.  And per her Profile (at right) there is labeled volume support from 31.25 down to 30.75.  Further — as we relentlessly remind — Silver remains ever so cheap relative to Gold:  the century-to-date average Gold/Silver ratio is now 68.6x, whereas the actual ratio settled the week at 86.6x.  Thus with Gold at 2718, Silver by the ratio’s average “ought be” +26% higher at 39.64 rather than her actual present price of 31.41.  Again:  do not forget Sister Silver!

So into the StateSide Thanksgiving week we go:  11 metrics come due for the Econ Baro, including 10 packed into Monday through Wednesday, the PCE data surely to get the lion’s share of interest.

Moreover:  we’ve this heads-up for next Saturday’s edition of The Gold Update.  We shall be once again  “in motion”, this time through the treasured beauty of Tuscany.  Thus akin to the occasional “Gold in 60 Seconds”, next week’s piece shall be quite brief.  True, ’tis is a month-end edition, normally graphics-rich.  However, we’ll like save most of those for the ensuing 07 December missive.  Either way, Gold’s reaction to next Wednesday’s PCE shall be key.

As we thus prepare to embark for Golden Tuscany, ensure your tally totals a Golden Destiny!

Cheers!

  …m…

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

The Gold Update: No. 783 – (16 November 2024) – “ ‘Tis No Surprise, Gold’s Current Demise ”

by

The Gold Update by Mark Mead Baillie — 783rd Edition — Monte-Carlo — 16 November 2024 (published each Saturday) — www.deMeadville.com

“ ‘Tis No Surprise, Gold’s Current Demise ““

 

For you valued regular readers of The Gold Update, price’s demise across these past three weeks ought be no surprise.  Into Halloween week, Gold vis-à-vis its near-term smooth valuation line ran better than +150 points “too high”.  Then into the StateSide election, price — as herein penned a week ago — once trumped was then dumped.

Subsequently, Gold fully reverted south to said smooth valuation mean, and upon penetrating it to the downside, the stage was set (as is the rule of thumb) for still lower prices, our “average” anticipation level (as herein written last week) being 2555.  And indeed such price was reached this past Thursday en route to the week’s low of 2542, toward settling yesterday (Friday) at 2567.  Here’s Gold’s updated Market Values graphic from one year ago-to-date.  Therein note per the lower panel oscillator (price less valuation) whereas Gold by this near-term metric was “overvalued” back in April by +200 points, that ’tis now “undervalued” by half that distance at -100 points.  The wee “sell” label marks the crossover:

However, with respect to Gold’s weekly parabolic trend, we’d last written:  “…there’s a very realistic chance that in a week’s time we’ll herein find such trend having flipped to Short…” which in concert with price’s reversion to the smooth valuation line has also come to pass.  Here are the updated weekly bars, the rightmost encircled red dot confirming the commencement of the new parabolic Short trend:

 

‘Course, the buzz within the graphic reminds us that Gold’s prior three weekly parabolic Short trends (extending as far back as September a year ago) have each been just three weeks in duration.  But given current negative technical reads — plus fundamental Federal Reserve musings that continuous rate cuts are not necessarily in stone (especially should inflation be increasing its tone) — the notion of yet another Short trend of short duration may be short-lived.

But wait, there’s more (or contextually stated given price’s descent, “less“).  Whilst too few in the trading community at large follow deMeadville’s leading analytics, a technical study very visible to the otherwise “great unwashed” is the mouthful measure “moving average convergence divergence” (MACD), an expression of complexity tossed about over post-work martinis to impress those within ear-shot as “MAC-DEE”:  “Well ya know, the big guy and me always buy to the max using MAC-DEE!”  Oh gee.

Regardless, MACD is one of the five key “standardized” Market Rhythms (across 405 nightly studies) we run here at deMeadville.  And by Gold’s weekly candles, the MACD — along with price’s piercing of the smooth valuation line and parabolic trend flipping to Short — also just confirmed its own negative crossover as we rightmost next see:

So in again teeing off on Squire’s “How low is low?” query from a week ago, the above graphic depicts the amount of adversity one might expect from the present 2567 level, the “average” -75 points suggesting Gold revisiting the upper 2400s on this run.  Indeed doing the math across Gold’s price-structuring cluster from 03 May’s low of 2285 to 20 May’s high of 2454, the mid-point is 2370.  And as you seasoned techies know, cluster mid-points are oft ripe targets.

“So mmb, you’re saying another 100 points down from here is where Gold is going?'”

As you know, Squire, none of us ever know.  We can only put to use that which typically eventuates so as to have some degree of cash management guidance.

“But folks should still wait to buy, eh mmb?”

Our modus operandi (a little Latin lingo for you WestPalmBeachers down there) for buying into dips is to accept the risk (especially with respect to Gold) of getting aboard with an initial tranche, but budgeting to fully expect another buying opportunity further down.  In other words, by planning to be initially wrong, one doesn’t miss out when it all goes right.  To again reprise the resplendent Richard Russell:  “There’s never a bad time to buy Gold.”  And priced today at 2567 vis-à-vis the opening Scoreboard’s Dollar debasement level of 3740, obtaining Gold at a -31% discount to its long-term value ought be an attractive entry point for those of you scoring at home.

Speaking of scoring, the Dollar Index just completed its seventh consecutive weekly gain, en route reaching to as high as 106.990, a level not traded since 03 October of a year ago.  And as we approach the 15th anniversary of these weekly Saturday missives (since 21 November 2009), we’ve on occasion quipped that provenly “Gold plays no currency favourites”, albeit price typically trends contra-Dollar as has been the recent case.

To be sure, pre-election Gold was being grabbed as a safe-haven bid, in concert too with the Fed to that point having turned somewhat benevolent.  But so-called oxymoronic “Dollar strength” has a tendency to erode all eight elements of the BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500).  In fact during these recent days wherein a glance at the screen portrays all eight components in the red, we “know” a priori that the Dollar Index is higher.  ‘Tis just the way these markets both interact and react.

Moreover with respect to being in the red, the mighty S&P 500 (aka “Casino 500”) — which though this year’s first 42 weeks (to that ending 19 October) had net gains in two of every three — just recorded its third down week in the last four.  (Recall the Wall Street Journal piece pre-DotComBomb about less-experienced investors actually believing the stock market never went down?)  Yet, just how overvalued remains the S&P, even having lost -2.7% (high-to-low) in just past five trading days?  Technically, the Index through Friday is still “textbook overbought” through 23 of the past 27 trading days.  Fundamentally, the “live” price/earnings ratio is a whopping 44.4x.  But then again, portfolio theory has long-been passé:  either be a lemming, else be left behind.

Which brings us to the Economic Barometer, itself continuing to improve. And per today’s conventional wisdom, as things get better, the S&P gets worse:  because rather than earnings-driven, the contemporary market is Fed-driven.  And as aforenoted, the Fed is now conditioning the market so as not to expect the FedFunds rate to automatically be cut time and again.

Specific to just this past week, of the Econ Baro’s 14 incoming metrics, only four did not improve period-over-period, albeit those laggards included October slowing in both Retail Sales and Capacity Utilization.  But the month’s wholesale inflation (Producer Price Index) popped — which is a Baro positive, “the rising tide of inflation lifting all boats” — whilst rate shrinkage was reduced for both Industrial Production and September’s Business Inventories.  Too, November’s NY State Empire Index whirled ’round from -11.9 to +31.2, its largest month-over-month improvement since COVID-laced June in 2020.  Thus, up with the economy, down with the S&P:

Further as noted, when the Buck gets the bids, “everything else” goes on the skids, including ‘natch the precious metals.  ‘Tis not the happiest of two-panel displays, but here next are the last three months-to-date of daily bars for Gold on the left and for Silver on the right, along with their respective baby blue dots of trend consistency.  Cue our lead (pun intended) conductor with “Follow the Blues instead of the news, else lose yer shoes…“:

Too, we’ve the precious metals’ 10-day Market Profiles, price in both cases nearly buried at the bottom of each stack for Gold (below left) and Silver (below right).  The more dominant overhead volume prices are as labeled:

And so to wrap, let’s go with The Stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3740
Gold’s All-Time Intra-Day High:  2802 (30 October 2024)
2024’s High:  2802 (30 October 2024)
The Weekly Parabolic Price to flip Long:  2802
Gold’s All-Time Closing High:  2799 (30 October 2024)
10-Session “volume-weighted” average price magnet:  2656
Trading Resistance:  notable Profile nodes 2573 / 2620 / 2672 / 2696 / 2474
Gold Currently:  2567, (expected daily trading range [“EDTR”]:  43 points)
10-Session directional range:  down to 2542 (from 2759) = -253 points or -7.9%
Trading Support:  none notable per the Profile
The 300-Day Moving Average:  2268 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

‘Tis a fairly light, ensuing week for incoming Econ Baro metrics, the most attention-getting one to be the Conference Board’s compiled negative reading of October’s Leading Indicators, (which as led by the Baro we instead refer to as “Lagging”).  Too, ’tis the final week of Q3 Earnings Season, which as you know (should you follow its page and/or read the Prescient Commentary) is sub-par compared to average quarterly year-over-year improvement.  But as we’ve quite a bit quipped, earnings today are irrelevant to equities’ investing:  else the S&P 500 would be at but half its current level.

Otherwise, notwithstanding some further near-term demise, Gold remains ever so cheap for the wise … the bottom line thus being:

Got Gold?  Don’t be a chicken!  Get yourself some real nuggets and win!

Cheers!

  …m…

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

The Gold Update: No. 782 – (09 November 2024) – “Gold Trumped, Dumped”

by

The Gold Update by Mark Mead Baillie — 782nd Edition — Monte-Carlo — 09 November 2024 (published each Saturday) — www.deMeadville.com

“Gold Trumped, Dumped““

Gold’s +35.2% rally this year from 2072 to an All-Time High at 2802 might be couched catalytically as geo-political discomfort were (amongst other rationale) Vice President Harris to have defeated former President Trump, in turn installing her as the so-called “Leader of the Free World” come 20 January.

Whilst we understand significant angst is now running through the StateSide media over the election, on this Side of the Pond one senses relief being broadcast not so much that he won, but rather that she did not win, a reminder that Europe would still look to the U.S. in dire times.

Regardless, last Tuesday brought the reverse result, StateSide equities getting a sensational bid, and Gold — thus “Trumped” — was dumped.

So with respect to Gold, whenever it or any major financial market reaches levels of excessive near-term — or in the case of equities long-term — overvaluation, we provably know throughout history that it “corrects”, (or in simple jargon for you WestPalmBeachers down there, it “goes down”).

And typically, the distance back down reverts to one or more of the following:  a measured mean; a targeted cluster of previous price structure; a notable prior high or low; and/or a retracement as guided by the mathematics of one Leonardo Pisano detto il Fibonacci, (aka “Signore Golden Ratio“).

‘Course, in addition to the distance of adversity, the most commonly-asked question with respect to price commencing a fall is:  “When?”

Here at deMeadville, astride our many years of quantitative crunching, we like to think we’re ahead of the game in anticipating such overdue price movements — be they up from undervalued or down from overvalued — the bane of that being we’re oft just too damn early by such assessment to be timely for today’s trading community.  ‘Tis why, as stated on our homepage:  “…deMeadville is not for the low-information, short-attention span, instant gratification crowd…”, such lost souls otherwise permeating today’s Investing Age of Stoopid.

But in due course, quantitative analyses will out upon FinMedia dissemination of a “catalyst”, following which it all goes wrong for a spell.  (Indeed, some entities — as were WorldCom, Enron, Lehman, et alia — never recover).

Fortunately for Gold, it always recovers and demonstrably so since President Nixon nixed the Gold Standard back in ’71.  Thus when Gold swiftly dips as it just did within a six-trading-day stint — from Halloween into the StateSide election — by careening -151 points (-5.4%), ours is not to reason why.  For, (albeit a bit ahead of the curve), we’ve nonetheless been anticipating such a drop.  And if you read these weekly missives, you too already know — at least quantitatively — why.  Cue our Market Values chart for Gold from one year ago-to-date:

 

Through yesterday’s (Friday’s) settle at 2692, not only is Gold still above its smooth valuation line, but has now so been for 75 consecutive trading days:  that ties for the longest “above value” streak century-to-date, the longest prior being the 75 trading days during 2019 from 23 May through 09 September.  To be sure, Gold (barring a significant down day come Monday) appears poised to break that record.

As well however, Gold having recently been (on a closing basis) as high as +166 points above that smooth valuation line, ’tis now only +31 points above it.  Thus we sense in fairly short order (no pun intended, especially as shorting Gold is a bad idea), that price shall break below the line, the rule of thumb then being to expect still lower levels.

“Ok, you mentioned ‘distance’, mmb, so the other usual question is ‘How low is low?'”

Squire, in reviewing downside Gold penetrations of its smooth valuation line for nearly the past five years (2019-to-date), there have been 60 such occurrences.  In then measuring how low did price go within each instance’s ensuing 63 trading days (i.e. one quarter) the average adversity is -4.0%.  ‘Course as we hasten to point out, “average” is hardly “reality”:  but from the critical standpoint of cash management, “average” keeps us from being overly surprised by downside distance.  So as a back of the napkin scribbling from here:

  • Gold presently is 2692;
  • It’s smooth valuation line is 2661;
  • Thus a -4.0% further correction below that line would bring Gold down to 2555.

In turn, 2555 is an interesting level as ’tis near a prior minor high of 2570 (20 August) which remained in place for 15 trading days (three weeks) until 12 September.  Naturally, our preference is for Gold to instead move higher still from last Thursday’s 2650 low; but we’ll respect the leading qualities of the quant-crunching upon Gold’s inevitably slipping below its smooth valuation line, (such graphic updated daily at the website).

Then, too, are Gold weekly bars which per this next year-over-year display we’ve exemplified as “perfection”.  However:  the current parabolic Long trend appears all but done.  Had price this past week broken just five points further down under Thursday’s 2650 low, such trend would have already flipped to Short.  Indeed, present price at 2692 is +42 points above the ensuing week’s “flip-to-Short” level of 2650:  but Gold’s expected weekly trading range is now 75 points, (the daily alone being 39 points).  Thus there’s a very realistic chance that in a week’s time we’ll herein find such trend having flipped to Short — and in concert — price also having then slipped below the aforeshown smooth valuation line.  Here are the weeklies:

The good news is — even upon Gold’s weekly parabolic trend eventually flipping from Long to Short — that the prior three such Short stints (since the week ending 29 September 2023) have each been but three weeks in duration:  that’s it.  The intervening Long trends respectively have lasted 17 weeks, 16 weeks, and the current one now 17 weeks.  Perhaps a bit too much perfection there, but as crooned Steve “The Joker” Miller back in ’73 “I get my lovin’ on the run“ and certainly for Gold, such a run ’tis been!

As for the StateSide economy, ’tis been on balance rather run down, albeit the Economic Barometer has bounced and since stabilized from its August low.  You tell ’em there, Jay:

‘Course the graph’s most glaring stat is the ridiculously impossible, insanely inane “live” price/earnings ratio of the S&P 500 which by “trailing 12-months earnings” (“ttm”) settled the week at 46.5x*, the S&P en route having traded above 6000 for the first time ever.  (Ought we reword “The Investing Age of Stoopid” to that of the “Lobotomized”?  Just a thought…).
* For fun, we also queried Assembled Inaccuracy:  it replied 30.1x by “ttm”.  To AI you go with your dough?

As a very close friend and business colleague wrote to us this morning:  “I have no words for this market [nor] clue at this point what is going on.”  Another mate at this morning’s coffee remarked:  “It’s gonna go down 50%”.  Did we cite means reversion above?  Indeed we did.  And the reason for the P/E’s relentless rise?  An on-balance economic demise.  Thus the earnings aren’t there, but does anyone care?  As long as they beat estimates, right?  Ponzi personified.

But to our point, let’s go outside the Econ Baro box.  Back in 2017 when then President Trump took office, our “live” P/E of the S&P was 12% above its evolving lifetime median.  Today ’tis 58% above same.  Thus mathematically, earnings growth has been severely lagging the broad rise in stock prices.  And through all these years, we remain mindful of the fact expressed by long-time analyst Michael Holland that — at the end of the day — stocks are valued by earnings.  And they will again so be.  Yet:  “When?”

As to the on-balance economic demise, we decided to blow open the Baro a bit, something we’ve very rarely herein done.  But as the President of the United States generally is assigned responsibly over the economy, just how did the Econ Baro comparatively do during each four-year term of the past two Presidents?

Below we’ve the four-year tracks of the Economic Barometer for President Trump (in red from Q2 2017 through Q1 2021) and for President Biden (in blue from Q2 2021 extended through Q1 2025).  Whilst we never reveal the proprietary math of the Baro, ’tis been adjusted such that both tracks begin at the same level and are identically scaled.  Certainly the two tracks are on-balance in net decline from where they began, and both (flat-lining the blue track from today) also look to end up at the same level as each other.  Et voilà, the declining “Prez Baro” and therefore the reason why underlying earnings are not keeping pace with price:

‘Course, we know Gold looks to keep pace as does the Dollar debase.  Quickly doing the math per the opening Gold Scoreboard, today at 2692, the yellow metal is priced -28% below its Dollar debasement value of 3739.  Still as noted, our near-term analyses look for price to ease.  And in turning to our two-panel graphic of Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right, you may sense similar negativity.  The baby blue dots of trend consistency are at present freely falling:  upon a blue dot eclipsing below the 0% axis, the regression trend shall have rotated from positive to negative.  Meanwhile per the Profile — key volume-dominant overhead resistors as labeled — the last nearby bastion of support is shown as 2674:

And ever so similar is the same construct for Silver, her “Baby Blues” (at left) just about to go sub-0%, whilst price by her Profile (at right) seeks support in the nested 31.85-31.25 area.  You may also have noted earlier in the graphic of Gold’s weekly bars that the Gold/Silver ratio — which just 14 trading days ago was 78.8x — has since sprung up to now 85.7x as Silver again suffers the scourge of sinking more swiftly than Gold.  Across that brief stint, the white metal has dropped -11%.  Poor ol’ Sister Silver!

Trumped if not dumped, in sum, we analytically expect both Gold and Silver to weather this near-term dip.  Either way, your key with them clearly is to maintain a Presidential grip!

Cheers!

  …m…

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

The Gold Update: No. 781 – (02 November 2024) – “Gold’s Highs; Inflation’s Rise”

by

The Gold Update by Mark Mead Baillie — 781st Edition — Monte-Carlo — 02 November 2024 (published each Saturday) — www.deMeadville.com

“Gold’s Highs; Inflation’s Rise”

Gold’s Highs … Gold just recorded its 16th All-Time Weekly High within the 44 trading weeks that have completed the first 10 months of this year.  Price by Gold’s “continuous front-month contract” (at present that for December) tapped 2800 for the first time ever in reaching up to 2802 this past Wednesday.

‘Course — as has been our ongoing take of late — Gold whilst still long-term vastly undervalued per the above Scoreboard’s 3738 Dollar debasement level vs. yesterday’s (Friday’s) actual settle at 2746, price near-term remains overvalued per our following Market Value gauge.  Such measure assesses Gold’s typical movement relative to that of the primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500) which at present shows the yellow metal as +96 points “high” above its smooth valuation line to which inevitably price reverses:

Still, we maintain that Gold’s deviation from its BEGOS valuation merely underscores the run of justly due buying.  In fact, across these 16 years of producing The Gold Update, never do we recall so many folks whom we encounter on a day-to-day basis questioning us about Gold.  And given its significant undervaluation relative to currency debasement, we regularly point out that — despite Gold’s run of record highs — most broadly ’tis still cheap … as is Silver relative to Gold … the white metal indeed super cheap.  Updating the math there:  valuing Gold at 3738 and applying the century-to-date Gold/Silver evolving average ratio of 68.5x puts Silver at  54.57!  That is +67% above her present price of 32.58.  Why, even applying said average ratio vis-à-vis today’s Gold level of 2746 places Silver some +23% higher at 40.09, the actual ratio at present being 84.3x.  Thus we repeatedly reprise:  Do not forget Sweet Sister Silver!

As for Gold itself, by the weekly bars from one year ago-to-date, we can only cue Nat King Cole from back in ’51 with“Unforgettable…”:

And yet whilst Silver by valuation significantly trails Gold, year-to-date the white metal +35.6% again tops the table of our BEGOS Markets, the yellow metal a close second +32.5%, with the inanely overvalued “Casino 500” rounding out the podium placers +20.1%.  Note therein that the Dollar Index is actually positive (given yields backing up and the Bond being in the cellar):  just a friendly reminder that Gold plays no currency favourites:

To the precious metals’ equities we go, the graphic ever so exemplary of the adage “Live by the leverage, die by the leverage” notably with respect to Newmont (NEM).  The company’s Q3 earnings of 81¢/share more than doubled those of a year ago (36¢/share):  but the stock was taken out behind the woodshed for having missed the consensus estimate of 86¢/share.  Bummer.

Still from the top down by their percentage tracks from a year ago-to-date we’ve Agnico Eagle Mines +83%, the Global X Silver Miners exchange-traded fund (SIL) +59%, Pan American Silver (PAAS) +57%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +42%, Gold itself +38%, Newmont (NEM) +21%, and Franco-Nevada (FNV) back in the black +10%.  The equities perhaps are not for those faint of heart, but well-suited for the long-term smart:

Gold’s highs, indeed.  ‘Tis been thus far an amazing year.  But is inflation, dare we say stagflation,  perhaps to appear?

Inflation’s Rise … All the broad measures of inflation data are in for the month of September.  And with respect to the so-called “Fed-favoured” inflation gauge of Personal Consumption Expenditures, ’twas hailed by Dow Jones Newswires this past Thursday as follows:  “PCE inflation edges closer to Fed’s 2% target, keeping FOMC on track for next interest-rate cut.”  A bit of a stretch that, especially as we do the math.  To be sure, the headline PCE 12-month summation dropped from August’s 2.2% to 2.0%.  But then we’ve the big BUT:  that for the core PCE was maintained at +2.6%, — and moreover — the month’s annualized pace increased for the headline number from +1.2% in August to +2.4% for September.  Even worse, the core number rose from 1.2% as well to 3.6%.  Whoops! Here’s our updated table:

So following September’s leap in core PCE inflation came October’s job creation of a scant 12,000 non-farm payrolls (vs. the consensus expectation for 123,000 after 223,000 in September), and thus our justification for having mentioned the word stagflation.  Still, mitigative to that may be the recent rising of the Economic Barometer as shown here from a year ago-to-date, the red-line S&P 500 indicative of investors keeping stocks on their plate despite some mild selling of late:

“The S&P has been coming back down, mmb, but to call it ‘mild’?”

Nobody tees it up better than Squire.  His observance notwithstanding, the wee rightmost drop indeed is comparatively “mild” relative to the increase in the S&P year-over-year.  And of even further import, here (employing “trailing 12-months earnings”) is the truthfully “live” price/earnings ratio of the S&P 500, duly including these two most recent consecutive down weeks:

At least we can offer a hat-tip to the mighty Swiss-based UBS, whose Nicolas le Roux-led strategy team just penned the bank’s expectations “…for equities to cheapen relative to bonds…”  Perhaps Nico and company have been reading The Gold Update and the website’s daily Prescient Commentary both of which have gone on ad nauseum for months about same.  Just in case you’re scoring at home, the all-risk S&P yield is presently 1.293% whilst no-risk U.S. debt across the maturity spectrum yields better than 4%.  (Which means for you WestPalmBeachers down there … no, forget it … you’re too pre-occupied in trying to figure out how to do a ballot).

Meanwhile, it being month-end (plus one trading day), ’tis time to go ’round the horn for all eight of our BEGOS Markets from a month ago (last 21 trading days)-to-date, featuring their respective grey linear regression trendlines and “Baby Blues”, the dots denoting the consistency of said trends.  Focus here ought be on both the Euro and Copper, their “Baby Blues” having curled up from beneath the -80% level, the rule-of-thumb being to then anticipate higher price levels near-term:

Too, we’ve the 10-day Market Profiles for the precious metals, featuring Gold on the left and Silver on the right.  In both cases, their dominant volume price resistors are as labeled:

And as is our wont to write, ‘twouldn’t be month end (and a day) without the stratified Gold Structure by the month from 16 years ago-to-date.  Yes, Gomer, you tell ’em:  for our Gold of late ’tis been nothing but “SHAZAAM!” mate:

StateSide there’s an election next week.  Just as the frequency with which we’re asked about Gold these days has been inexorably on the increase, so too are we questioned:  “Who’s gonna win?”

‘Course, nobody knows, and sentiment varies based on one’s favoured sources of information, given that 99.999% of us have never actually met (let alone personally know) either the “current democrat” nor the “former democrat”.

But the one point upon which all seem to agree is — regardless of who “wins” or is “declared” the next President — there shall be an ensuance of StateSide chaos both in the markets and (hopefully still) civil society.  Gold, too, could certainly get banged about a bit:  again, ’tis near-term overvalued.  But because ’tis long-term undervalued — be it on the left or on the right — Gold is far and away the best candidate to keep your future bright! 

Cheers!

  …m…

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

The Gold Update: No. 780 – (26 October 2024) – “Gold Taps a Ten-Year Frontier”

by

The Gold Update by Mark Mead Baillie — 780th Edition — Monte-Carlo — 26 October 2024 (published each Saturday) — www.deMeadville.com

“Gold Taps a Ten-Year Frontier”

‘Tis taken ten years, but what just happened?

“Well, mmb, I’m gonna take a stab at this: for the 207 trading days so far this year, Gold has made a record high for 37 of ’em.”

A spot-on and well sussed-out observance there, Squire, but that’s not our highlight.  Rather, the answer is in the above Gold Scoreboard’s math.  Ready?  Here we go:

  • As shown, Gold settled out this past week yesterday (Friday) at $2,761/oz.
  • Gold’s valuation (even given its own supply increase) relative to debased M2 is now $3,736/oz.
  • The difference?  $2,761 – $3,736 = -$975.

Thus for the first time in ten years (since the week ending 25 July 2014), Gold at week’s end is now above the -$1,000 undervaluation frontier relative to where it ought be given Dollar debasement. ‘Tis all there to below behold across the past 45 years, the rightmost pip having just eclipsed that red frontier:

 

Gold’s firm rally so far this year (correctly incorporating Squire’s 37 days of All-Time Highs) has remained magnificently intact, indeed having well-exceeded our “conservative” (as ’twas couched at New Year) forecast high in 2024 of 2375.

So per the above graphic, having surpassed (at least for the moment) the -$1,000/oz. undervaluation frontier, does this mean Gold finally is en route in racing up to where it “ought be”, (i.e. at the horizontal green line)?

To be sure, Gold (cue the yucky woke word) “awareness” is certainly increasing at least per the pages of the FinMedia.  But is that translating into enough substantive buying to power Gold to its proper 3700+ perch?  A good many years ago on a Merrill Lynch “call to clients” in which a piece of our work was featured, the host opined that only some 5.0% of managed portfolios carried Gold exposure.  Then in more recent years, (Al Gore’s invention of the internet having since extrapolatively expanded), such number has been bandied down to as low as 0.5%.

We’ve thus decided to go with something assumed to be in the modern-day know:  “AI“.  So in specifically querying such “Assembled Inaccuracy”, the salient part of its responding was:  “…75 percent of private client discretionary investment managers have under 2.5 percent gold exposure…”, followed by the available sources “AI” scrounged, and in turn, its disclaimers.

‘Course for this to have any meaningful relevancy, we need know the status of the other 25%.  Otherwise  ’tis all (per The Stones from ’65): “…About some useless information, Supposed to fire my imagination, I can’t get no … Satisfaction…” let alone accuracy as to managed Gold ownership.

The bottom line being:  as long as stocks remain “the only thing”, Gold shan’t immediately the 3700+ bell ring.

Still, one can’t argue with the golden brilliance of price’s weekly bars from a year ago-to-date, the current blue-dotted parabolic Long trend having completed its 15th week with still plenty of room (154 points) between present price (2761) and the “flip to Short” level (2607, itself now rising at a rate of some +30 points per week).  Either way, wherein understanding range is critical to cash management, Gold’s expected weekly trading range is now 73 points; the daily range (see the website’s Market Ranges and/or Gold page) is currently 31 points.  So notwithstanding the near-term overvaluation note therein, our Gold graphic here points as positively as one could prefer:

As to the StateSide economy, our Economic Barometer points to it of late as trendless, the International Monetary Fund with a more optimistic view than that of the Fed per the latter’s Tan Tome for October released this past Wednesday.  And specific to the Baro, ’twas a very light “50/50” week with just six incoming metrics of which three bettered their prior period.  Amongst the batch was the Conference Board’s “Leading Indicators” (to which we refer as “lagging” because the Baro leads them) for September which were negative for the seventh consecutive month, and further, for the 28th negative month in the last 30.  (Recall as well from the Econ Baro a week ago the “WaPo” OpEd quote about this being “one of the best economic years of many Americans’ lifetimes” … but suddenly they’ve decided not to endorse “re-election” of the “current” Administration … That’s gonna bruise).  Here’s the Baro:

And stark in the Baro’s upper-right corner we’ve the “live” price/earnings ratio of 43.6x for the S&P 500.  Obviously toward approaching the midpoint of Q3 Earnings Season, there’s not been significant enough improvement to bring that ratio down.  In fact for those of you scoring at home, of the 503 S&P constituents, 161 have reported, of which 109 bettered their bottom lines from a year ago.  That is a 68% bettering pace which is “average” vis-à-vis recent years, even excluding 2020’s COVID profits-dearth.  One wonders how might ol’ Jerome B. Cohen (“in bull markets the average level would be about 15 to 18 times earnings”) might react to this data:  only 160 (32%) of the S&P 500 entities have P/Es less than 20, with 52 companies either exceeding 100x or without earnings at all.  (‘Tis again why — instead of the stock market — we prefer the safe, serene, security of the futures markets).  And if that’s too complex for you WestPalmBeachers down there, then we simply ask:  “Got Gold?”

Here’s Gold via our two-panel display, featuring on the left price’s daily bars from three months ago-to-date, whilst on the right is the 10-day Market Profile such that you can see which prices having been carrying the most trading volume.  For both panels, as herein inferred a week ago, ’tis hard to improve upon perfection.  Still, as aforementioned, we’re wary of near-term price reversion to its smooth valuation mean of presently 2644:

With the same drill for Silver, we might as well photocopy that for the yellow metal and merely change the colour to this for the white metal.  ‘Course, the important inference here is Sister Silver having been adorned in her precious metal pinstripes as opposed to her industrial metal jacket, (the latter being her preference when acting as the bad girl with Cousin Copper).  But that clearly is not the current case, the red metal’s own “Baby Blues” of trend consistency being comprehensively in the dumpster (per the website’s Market Trends and/or Copper page).  So stay sweet, Sister Silver!

Then there’s next week, for which the load of incoming economic metrics is massive(!).  17 reports come due for the Econ Baro, including the “Fed-Favoured” inflation gauge of Core Personal Consumption Expenditures Prices for September.  And the “consensus” expection is for it to have risen … we even read within the mist of the past week’s FinMedia the query (paraphrased) “What if the Fed instead raises rates?” come its Open Market Committee’s post-election meeting (06-07 November).  We’ll be updating our inflation table for next week’s piece.

Meanwhile, creativity abounds in the headlines.  Try this CNBS (truth be told) from yesterday:  “In this time of uncertainty, markets seem to rely on logic.”  Folks, you cannot make this stuff up, (except, they’re doing their best to so do).  If markets were relying on logic, today’s S&P 500 (5808) given its ghastly P/E would be half that (2904), whilst Gold (2761) would be ’round its Scoreboard valuation (3736).  True, the markets are never wrong, but misvalued opportunities abound!  Especially for the precious metals all ’round! 

 

Cheers!

  …m…

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

The Gold Update: No. 779 – (19 October 2024) – “Gold Up; Dollar Up; Yields Up — What’s UP?”

by

The Gold Update by Mark Mead Baillie — 779th Edition — Monte-Carlo — 19 October 2024 (published each Saturday) — www.deMeadville.com

“Gold Up; Dollar Up; Yields Up — What’s UP?”

‘Tis simple really.  Against all conventional wisdom (to the extent that any wisdom whatsoever remains as The Investing Age of Stoopid rolls merrily along), Gold is merely yet again proving — as on occasion is its wont — that it plays no currency favourites.

Too, ’tis great having returned following our travels amongst the wilds of easternmost England, to now be ensconced in the quiet confines of our otherwise palatial estate.  However, it does beg the pro-Gold question:  ought we perhaps travel more often?  For in the wake of last week’s brief “in-motion” missive “Gold in 60 Seconds (III)”, the yellow metal went on to record a series of fresh All-Time Highs, reaching yesterday (Friday) up to 2738 before settling at 2736.  And note the suggestion of Gold en route to closing the gap from its Dollar debasement value in the above Scoreboard’s right-hand panel.  Just an observance…

“But it’s not about you, mmb, so may we stick to the issues?“

Of course, Squire, duly noting our having been out-of-pocket without your skillful support last Saturday was a challenge.

But on with the show, beginning with the following two-panel graphic depicting several series of what are more usually Gold-negatively-correlated entities across the past 21 trading days.  On the left we’ve Gold from 20 September through 19 October along with the independently-scaled Dollar Index:  and yes, Virginia, as we’ve seen in the past, both Gold and the Dollar have been on the rise.  On the right for the same one-month stint we’ve the annualized yield of the U.S. 30-year Treasury Bond and the FedFundsFutures equivalent rate, also both on the rise.  Naturally, axiomatic fanatics argue this can’t occur, but (in again cuing Tag Team from ’93) “Whoomp! (There It Is)”:

‘Course, with Gold on the rise and also the Dollar and also yields, ’tis a no-brainer that equities must be in “Dire Straits” … however “Why Worry”(’85):  for the S&P 500 set another record high (5878) this past Thursday, the “live” price/earnings ratio settling the week at 43.7x, +72% above its inception a dozen years ago.  But as we’ve been stating time and again, earnings no long matter, (see the S&P 500 from 24 March 2000 through 10 October 2002).

“But obviously, mmb, the market always goes all the way back up and as you say, ‘beyond’, eh?“

Squire, throughout the 67-year history of the S&P 500, that has ultimately been the case.  But in this current age of the “low-information, short-attention span, instant gratification crowd“, patience would be vapid in weathering a 13-year, double-dip S&P 500 trough for a price gain of just 2% as we witnessed following 24 March 2000 until 10 April 2013.  It happens.

But let’s go to what truly of late has been “The Happening”(The Supremes, ’67):  by yesterday’s 2736 settle, Gold year-to-date is now +32%, second only to the BEGOS Market component Silver, she  now +41%!  Indeed, the white metal’s long-overdue “catching up” is in play to some extent, the Gold/Silver ratio — as below noted at the foot of Gold’s weekly bars graphic — having been reduced this past week to now 80.7x, its lowest reading since 16 July, (but still well above the century-to-date average of 68.5x).  Thus with Gold remaining very cheap relative to currency debasement — and Silver still a bargain relative to Gold —  here is the yellow metal from one year ago-to-date:

 

With a justifiable nod toward Gold jubilation and its still being ever so cheap from the long-term currency debasement perspective, as has been our prudent point of late:  Gold near-term remains “high” relative to its BEGOS valuation.  So again we next display Gold’s daily closes from one year ago-to-date astride its smooth valuation line — itself rightly rising — but suggesting price “ought be” (per the lower panel oscillator) some -111 points lower at 2625.  To be sure, ’tis a one-off valuation for Gold given its price movement relative to those of the other four primary BEGOS Markets; but obviously price and valuation inevitably meet … just in case you’re scoring at home:

Now this next graphic comes with a loss of words to substantively describe, if for no other reason than ’tis perfection for the daily bars across the past three months-to-date featuring Gold on the left and Silver on the right.  As noted, the yellow metal is at a record closing high of 2736, whilst the white metal at 33.93 is at its best daily settle since 29 November 2012.  Nuff said:

And thus segueing to the precious metals’ 10-day Market Profiles, it stands to reason that we find both Gold (below left) and Silver (below right) essentially at the top of their respective stacks, notable underlying volume-supportive prices as labeled:

Towards this week’s wrap, with The Washington Post opining that the 2024 StateSide economy may be amongst the best of our lives, we indeed turn to the Economic Barometer.  Of the 14 metrics taken in by the Econ Baro this past week, six improved period-over-period … meaning that eight did not improve.  The week’s notable winner was substantive growth in the pace of Retail Sales for September.  But amongst the stinkers came shrinkage in September’s Industrial Production from August’s +0.3% to -0.3% and a like erosion in the New York State Empire Index from +11.5 in September to -11.9 for October.  Still, “WaPo” says ’tis all on go.  Do you think so?  Here’s the Baro:

So “What’s UP?” indeed!  With Gold and the Dollar and Yields and even the stock market all on the rise, might we be facing a Fed surprise?  After all, as aforeshown, the rate equivalent of FedFundsFutures also is up of late. The Federal Reserve’s Open Market Committee issues its next Policy Statement on 07 November … which is a Thursday!  Why not on the usual Wednesday?  One guess may be that “they” (whoever “they” are out there) still shan’t have “declared” the winner of the Tuesday, 05 November Presidential Election.  “Well, there’s millions of mail-in ballots still to count, ya know…”  And of course ’tis The President who nominates the FedHead.  So might it behoove one to see who’s won before the next Fed policy is spun, lest it all come undone?

For in speaking of spin, hat-tip “Political Calculations” with this gem:

And keep your hat tipped to Gold as THE gem!

Cheers!

  …m…

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

The Gold Update: No. 778 – (12 October 2024) – “Gold in 60 Seconds (III)”

by

The Gold Update by Mark Mead Baillie — 778th Edition — Easternmost England — 12 October 2024 (published each Saturday) — www.deMeadville.com

“Gold in 60 Seconds (III)”

Our title’s Roman “III” is indicative of having used “Gold in 60 Seconds” now for the third time across these esteemed Saturday missives’ 15 years (previously on both 16 April ’16 and 08 March ’14).  Again, this time ’tis so apropos.  For as herein previewed a week ago…

Greetings from a remote, undisclosed, rural location in easternmost England, an area sufficiently primitive that in lieu of digital internet connectivity we are reliant upon the dear old analog telegraph to produce this week’s piece.  And with time to write this week at an extreme premium, let’s get salient straightaway with just the key graphics (to the extent they can visually be reproduced via the telegraph).

For all the hype over the past StateSide “Inflation Week” — which at the retail level (CPI) was more robust than consensus anticipation, yet at the wholesale level (PPI) relatively benign — Gold netted a gain for the week of (deep breath … ready?) exactly one point in settling yesterday (Friday) at precisely 2674.2 vs. the prior Friday’s 2673.2.  Here are Gold’s weekly bars from one year ago-to-date, the blue-dotted parabolic Long trend now 13 weeks in duration, even as price has made a “lower high” now twice in succession:

Per recent editions of The Gold Update — as well of late in the daily Prescient Commentary — we’ve been alluding to Gold’s being “high” relative to its smooth valuation line to which price inevitably reverts as we next see from this time a year ago to now.  The smooth line reflects a near-term valuation for Gold based on its movement relative to those of the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500).  The graphic’s lower panel oscillator (price less valuation) tells the tale that with price recently stalling, ’tis becoming more in line with valuation, the good news there being (as herein highlighted a week ago) the BEGOS valuation for Gold is rising:

Again, that’s merely a near-term view, for long-term by the opening Gold Scoreboard (which may appear graphically-challenged per said analog telegraph transmission), the yellow metal today at 2674 is undervalued by some -1069 points per its 3743 Dollar debasement value.  Dip Gold may near-term do, but long-term do not Gold eschew.

Meanwhile, the relentless S&P 500 made record highs both this past Wednesday and Friday, en route to settling the week at 5815.  ‘Course, its “live” P/E ratio remains staggeringly high at 43.6x, some +72% above its inception a dozen years ago.  But we reprise:  the S&P’s saving grace is earnings no longer having a role in “valuing” stocks.  “Les jeux sont fait; rien ne va plus.”  And as to near-term technicals:  through 197 trading days this year-to-date, the S&P 500 has been “textbook overbought” for 122 of them, including now.  (A word to the wise is sufficient).

In concert with the the one-way stock market is the Economic Barometer, albeit hardly are they in tune with one another as shown here year-over-year.  One cannot beat the modern day reality of a weakening economy being of benefit to the S&P 500.  As ’tis said “If it’s so easy, then everybody would do it.”  And indeed, they are.  But be it the “Look Ma, No Earnings!” crash — or worse — the “Look Ma, No Money!” crash, at some point, such unsustainability shall revert to the mean, as relative to earnings the S&P 500 has historically done since its creation 67 years ago in March of 1957.

Of this week’s total 60-seconds read, we’ve but 10 seconds left to offer.  Thus swiftly let’s bring up the two-panel display of Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right:  Therein, most key are the falling “Baby Blues” of trend consistency.  As penned in last Tuesday’s Prescient Commentary:  “…we’d look for lower precious metals prices near-term, perhaps for Silver right ’round 31 and for Gold 2620-2570…”: 

So there briefly ’tis for this week as we simply must scoot.  14 incoming metrics are due next week for the Econ Baro, plus Q3 Earnings Season starts to become more voluminous; (but be they better or worse, as noted, earnings today are simply passé).

Thus from the undisclosed wilds of easternmost England, we bid you “Good Day!”, and that many-a-good Gold trade come your way!

Cheers!

  …m…

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

The Gold Update: No. 777 – (05 October 2024) – “Gold Stands Idly By as Silver Nears a 12-Year High”

by

The Gold Update by Mark Mead Baillie — 777th Edition — Monte-Carlo — 05 October 2024 (published each Saturday) — www.deMeadville.com

“Gold Stands Idly By as Silver Nears a 12-Year High”

Welcome to edition “Triple-Seven” of The Gold Update, wherein we find the yellow metal having settled yesterday (Friday) at 2673, a -0.3% loss (-8 points) for the week.

Silver however for the same stint settled at 32.45, a +1.7% weekly gain (+0.53 points), achieving en route a nearly 12-year high of 33.23, such level having not traded since 13 December 2012.  Not even cajoling Cousin Copper could keep sweet Sister Silver down.  ‘Twas a beautiful thing as we here see per the cumulative percentage tracks of the BEGOS Markets’ “Metals Triumvirate” by the hour across this past week:

Silver’s sterling week (whilst Gold was essentially asleep) was enough to bring the (albeit still excessive) Gold/Silver ratio down to 82.4x, its lowest closing reading since 23 July.  Moreover, year-to-date expanded Silver’s leading position of the BEGOS Markets, the white metal now with a gain of +35.0%, (followed by Gold at +29.0% and then the S&P 500 +20.6% to round out the podium).

Specific to Gold and the murderous Mid-East mayhem, we were yet again reminded that the yellow metal’s swift upside reaction to geo-political barbarism was at best short-lived, price from late Monday into Tuesday being boosted from 2646 to 2695 only to then see it erode away into week’s end.  We’ve written rather extensively on Gold’s “momentary” spikes over geo-political jitters, price then regularly receding.

That in turn reminds us of Gold’s most foundational element of valuation:  ’tis not fearful events nor extravagant wedding seasons, et alia.  Rather ’tis the debasement of currency that gives lasting value to Gold.  And as our opening Gold Scoreboard shows, by Dollar debasement (even as adjusted to the creeping increase in the supply of Gold itself), the yellow metal today “ought be” fetching $3,741/oz.  So yes, for you WestPalmBeachers down there, priced today at $2,673/oz Gold remains cheap; and Silver still super cheap given the century-to-date average Gold/Silver ratio is but 68.5x.

Still in light of Silver’s robust week, Gold stand by rather idly as we here see by the weekly bars from one year ago-to-date. the blue-dotted parabolic Long trend nonetheless continuing to ascend:

Regardless, we’ve this ongoing reminder from the “Nothing Moves in a Straight Line Dept.” that Gold near-term is overvalued vis-à-vis its smooth valuation line (which is different from the broad-term Scoreboard value).  Here, the smooth line sets a value for Gold based on its movement relative to those of the five primary BEGOS Markets, namely the Bond, Euro, Gold, Oil and S&P 500.  Thus from the website comes that updated view, by which one ought anticipate price reverting to the smooth line which fortunately itself is on the rise and therefore, in part, supportive of Gold’s recent rally:

“Your chart says ‘excessive’, but what happened to your ‘Stock Market Warning’ mmb?“

To be sure, Squire, we issued said “Warning” a week ago.  Instead, the S&P 500 sported a +0.2% gain for the week.  ‘Tis the way ’tis as The Investing Age of Stoopid blissfully rolls along.  The mighty Index today stands at 5751, a mere -16 points below its 5767 all-time high, with FinMedia reports for 6000.  That is just another +4.3% up from here.  (Note for those of you scoring at home:  at 6000, the “live” P/E of the S&P would be 44.4x; ‘course, earnings in the modern investing era have becoming meaningless, so ’tis all good, even as the “non-event” Q3 Earnings Season commences on Monday).

Indeed speaking of “good”, as we work toward the Economic Barometer, how about that StateSide jobs report for September, courtesy of the Department of Labor Statistics?  The net “creation” of 254,000 Non-Farm Payrolls was hailed amongst the FinMedia as (ready?) “Blockbuster” and even more superlatively as a “Supernova”.  Why, we ourselves were so excited over this apparently history-breaking news that we decided (as you know is our wont) to do the math.  And here’s what we found:

  • Century-to-date (i.e. from January 2001), Friday’s monthly report was No. 285, for which such amazing job creation ranked as (ready?) 50th-best.  One strains to recall what adjectives were used for the prior 49 reports that were even better.

But yes, we get it:  ’tis election season and as the economy’s state ultimately redounds to the Executive Branch, “Labor” need ensure its survey results generate energized levels of electoral enthusiasm.  Cue The Cars from ’84: “Uh oh, it’s magic” And as an aside, specific to September’s private sector employment, “Labor” recorded a +78% month-over-month improvement whereas ADP’s report was only half that at +39% … (just one of those things that makes you go “hmmmmm…”)

Either way, we’re told the economy is humming right along, some indeed invoking the “Goldilocks” descriptor.  Really, does it get any better than the following?

‘Course in the midst of all this economic euphoria come the bits from the “You’re Not Supposed to Say That Dept.”, which from this past week include ongoing net contraction for September in both the Chicago Purchasing Managers’ and Institute for Supply Management’s Manufacturing Indices, a slowing in Hourly Earnings and the number worked thereto, a pickup in the prior week’s Initial Jobless Claims, and actual shrinkage in August’s Factory Orders.  But “Mum’s the word, Mum.”  Right.

As aforeshown, getting it right this past week was Silver, such that we’ll lead the two-panel displays this time ’round with the white metal.  Below on the left are her daily bars from three months ago-to-date; but be wary of her “Baby Blues” of day-to-day trend consistency, as upon their breaching below the +80% axis, one ought look to lower price levels.  Then on the right we’ve Silver’s 10-day Market Profile with the most dominantly-traded prices by volume tightly nested as labeled:

Too, we’ve the like drill for Gold.  Note on the left the “Baby Blues” similarly curling to the downside, whilst on the right the three labeled dominant prices are a bit more spread out than are those for Silver:

We shut down for this week with a heads-up for next week.  Our 778th consecutive Saturday edition of The Gold Update is to be composed from a remote, undisclosed, rural location in easternmost England, an area sufficiently primitive that in lieu of digital internet connectivity we must be reliant upon analog telegraph.  Indeed, next week’s piece — to literally go “out on the wire” (as dear old Grandpa used to say) from one telephone pole to the next and right ’round the world — shall be quite brief and perhaps even graphics-less. But having never missed penning a Saturday missive across these 15 years, the show must go on, just as does Gold being true money these 5,000 years!

So whilst Tut himself may be out on the town, again we’ll be hunkered well down close to the ground our next missive ’round!

Cheers!

  …m…

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

The Gold Update: No. 776 – (28 September 2024) – “Gold Surely Soaring; Stock Market Warning”

by

The Gold Update by Mark Mead Baillie — 776th Edition — Monte-Carlo — 28 September 2024 (published each Saturday) — www.deMeadville.com

“Gold Surely Soaring; Stock Market Warning“

Soaring indeed has been our Gold:  year-to-date, price has risen from last year’s settle at 2072 to as high as 2709 this past Thursday, to then settle the week yesterday (Friday) at 2681.  That is a net year-to-date gain of +29.4% to keep Gold on the podium per our BEGOS Markets Standings thus far for 2024:

 

Moreover, how lovely ’tis to see sweet Sister Silver topping the entire troupe.  We’ve herein pounded the table seemingly forever on Silver’s relative undervaluation to Gold, both precious metals of which — despite record Gold highs — still remain cheap by currency debasement:

  • Gold today at 2681 is nonetheless -28% below its Dollar debasement value (per the opening Gold Scoreboard) of 3739;

  • Silver today at 31.92 is attractively -18% below its pricing by the average century-to-date Gold/Silver ratio of 68.5x, the ratio itself today 84.0x:  but priced to that average ratio puts Silver instead at 39.16;

  • ‘Course, this then is the cherry on top:  price Gold today at its 3739 debasement value with Silver priced per the average Gold/Silver ratio of 68.5x and you’ve got Silver at 54.58 … just in case you’re scoring at home.

From Silver’s scoring to Gold’s soaring:  the yellow metal’s year-to-date +29.4% gain through the 187 trading days thus far in 2024 ranks far and away its best percentage increase specific to such stint across this century’s 24 years.  A distant second-best is 2016’s +24.9% gain through that year’s first 187 trading days; (the worst such year-to-date stint was -20.2% in 2013 as the wheels continued to come off following Gold’s  having “gotten ahead of itself” as we’d herein presciently penned back in 2011).

More toward “The Now”:  as well as Gold is soaring — yet still remaining cheap by Dollar debasement — price persists as “high” relative to near-term valuation vis-à-vis its smooth line borne of movements to those of the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500).  Here from the website is our Market Value chart of Gold from one year ago-to-date astride that smooth valuation line; the oscillator in the lower panel (price less valuation) shows Gold presently priced as +148 points “high”, with “means reversion” inevitably in the balance as you can see across the graphic:

Near-term “overvaluation” notwithstanding, Gold simply looks great by its weekly bars from one year ago-to-date.  Even were price to suddenly snap back down those 148 points as just shown (to 2533), ‘twould still be above the rightmost parabolic blue dot which per the weekly graphic is at 2478.  Again, great:

Staying with our year-over-year theme, here next is the percentage track of Gold along with those of its key equities brethren.  How’s the AEM leverage working out for ya?  That track of Agnico Eagle Mines is +81%, followed by the Global X Silver Miners exchange-traded fund (SIL) +53%, Pan American Silver (PAAS) +52%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +50%, Newmont (NEM) +45%, Gold itself +42%, and Franco-Nevada sorting through its Panamanian exasperation (FNV) -5%.  Still, that’s diversification, right there!

Meanwhile, on the heels of the Federal Reserve’s “Jumbo” -50bp FundsRate cut of a week ago, we’ve since received all the salient data to complete our inflation summary for August.  Remember:  those figures sporting the red backgrounds are running ahead of the Fed’s +2.0% inflation target.  So was “Jumbo” in hindsight rather “dumbo”?  FedGov Michelle “In the know” Bowman seems to think so, her dissenting Open Market Committee vote for “Jumbo” being “No”, preferring instead for -25bps to go.  Might the FOMC later say “Oh no…”?

What we do know is that the Fed’s -50bp FundsRate cut has been beneficial on balance for the BEGOS Markets, six of the eights components therein having since moved higher, (save for the Bond and Oil).  Let’s go ’round the horn for the whole bunch across their last 21 trading days (one month), replete with their respective grey trendlines and “Baby Blues”, the dots that depict the day-to-day consistency of each trend.  Therein, note the tight correlation of the Metals Triumvirate as the panels for Gold, Silver and Copper appear practically identical:

Particularly for the precious metals, next we’ve their 10-day Market Profiles featuring Gold on the left and Silver on the right.  Denoted are those respective prices having traded the most amount of volume during the past two weeks; such prices we regularly consider as support and resistance levels:

With but one trading day remaining in the month, indeed in Q3, ’tis time to bring up (literally) Gold’s structure by its monthly bars across the past 16 years, the stratified “memories” as labeled.  Whilst we all understand that “nothing moves in a straight line” — and that Gold as aforeshown is significantly “high” relative to its near-term BEGOS valuation — The Big 3000 is sitting on the table, a price certainly to be achieved given that the yellow metal historically always catches up to prior high levels of debasement value (again which at present is 3739):  ’tis merely about “The When”.  And from today at 2681, a “mere” +11.9% puts Gold at The Big 3000:

“All fine info, mmb, but your title mentions ‘Stock Market Warning’, so…“

Yessir, Squire, we’ve saved the juiciest (or better stated “scariest”) bit for last.  Let’s first go to the Economic Barometer, itself actually having notably improved over the past five weeks.  Indeed from 22 August-to-date, 63 metrics have come into the Econ Baro, 38 (60%) of which have improved period-over-period.  Thus the Baro has been boosted by better numbers combined with those “getting worse more slowly” –[P. Krugman, 02 May ’01].  Here ’tis, “flying high” (by some eyes), whilst the S&P 500’s red line blows through the skies:

But to our Stock Market Warning:  as Squire duly reminds us, so is stated in this missive’s title.  (Indeed for further analysis you may also refer back to the 712th edition of The Gold Update from 08 July 2023 entitled “Gold’s Downtrend Duly Dissed?  Stocks’ 10 Crash Catalysts!”).

To continue, hardly have we been silent on the year-in, year-out overvaluation of the stock market as measured by the S&P 500.  Simply stated by any historical gauge, earnings (or lack thereof) remain unsupportive of price, period!

  • We just queried “AI” (“Assembled Inaccuracy”) for the current price/earnings ratio of the S&P.  The “reply” was “29.2x” without respect to past or forward earnings.  ‘Course because as you ad nauseum know we do the honest math, the “live” cap-weighted P/E is actually 42.3x using trailing twelve-month earnings, (earnings-less companies being assigned the price of their shares as the P/E).  And since introducing such “live” P/E in 2013, it has increased +67%.  Whoops.

  • Again we quote J. B. Cohen:  “…in bull markets the average [P/E] level would be about 15 to 18 times earnings.”  To get down to such rational valuation, earnings at today’s S&P level need double if not triple.  Does the above Econ Baro suggest such robust growth?  Nope.  Or shall the policies of the next StateSide President?  Of course not.  Whoops.

  • The S&P 500’s market capitalization today is $50.3T for which the readily available money supply (M2) to cover is “only” $21.2T.  Whoops.

  • Had COVID never occurred (and thus neither the $7T of monetary infusion), the S&P today would be ’round 3000 (vs. today’s 5738) and everybody’d be happy as clams.  Whoops.

  • Geo-political disruptions (understatement).  Whoops.

“That’s lots of catalysts, mmb, but what do you think really sets it off?“

The oldest catalyst throughout market history, Squire:  flat out fear, influenced to an extent by the modern-day FinMedia which at times refers to a -5% correction as a “crash”;  now just add a zero, (which for you WestPalmBeachers down there makes -50%).  And today given there’re so many invested “first timers” (i.e. the happy, no-crash experience, marked-to-market millionaires), next time the fear shall be ferocious and future plans-altering. “Nobody Knows You When You Are Down and Out” –[Jimmie Cox, 1923].  Whoops.

And most importantly, overvaluation (to use a “woke” term) “awareness” is finally spreading.  A valued friend (formerly at the very apex of a major investment bank) in a just-issued interim report to investors  warned of a stock market correction reaching -50%.  Respected Gold analyst Jim Rickards recently said same.  Whilst we’re in the camp for a “milder” -35% skid, our excellent co-director here is in the -40% camp.  Indeed “The When”?  Before year-end?  Whoops.

Then (hat-tip The Times of India) for further “awareness”:

Or more accurately, aBEARness?  Got Gold??

Cheers!

  …m…

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

 

The Gold Update: No. 775 – (21 September 2024) – “Gold Flies as Dumbo* Whilst the Fed Goes Jumbo”

by

The Gold Update by Mark Mead Baillie — 775th Edition — Monte-Carlo — 21 September 2024 (published each Saturday) — www.deMeadville.com

“Gold Flies as Dumbo* Whilst the Fed Goes Jumbo”

Thursday’s Prescient Commentary opened as follows:  “We were wrong about the Fed, it having cut its Funds Rates -50bp rather than by our -25bp assertion; and as is our wont, when we’re flat out wrong, we fess up…”

Wrong indeed.  Through many-a-missive in this year’s early months, we went on about the Federal Reserve needing to actually make a further FundsRate increase, given the mathematical proof of inflation remaining well away from the Fed’s “preferred target” of 2%.

But then came the month of May and it all started to go wrong for the Economic Barometer.  So damaged became the Econ Baro that come the Federal Open Market Committee’s 31 July Policy Statement, we asserted that they’d have to vote to reduce the FundsRate by -0.25% from the then 5.25%-5.50% range to 5.00%-5.25%.  Yet instead, the FOMC surprisingly stood pat.

Now just came the FOMC’s most recent vote this past Wednesday.  Contrary to the FinMedia’s fervoured anticipation of a “Jumbo Cut”, we adamantly put forth time and again ‘twould be a -0.25% cut rather than a mouth-foaming -0.50% cut (even as the latter was already priced into the FedFundsFutures) for three key reasons:

  • Unexpected inflation pop:  for August, the “core” inflation readings at both the wholesale (Producer Price Index) and retail (Consumer Price Index) levels came in at an annualized +3.6% pace vs. consensus for +2.4%; pop goes the wallet;

  • Poor Fed optics: as herein penned back on 24 August:  “Our case for a rate cut back on 31 July did not come to pass, which lends credence to a two-pip reduction on 18 September.  But then the optics would be poor for the Fed being too slow, thus we think ’twill be but one pip they’ll go.” But no, ’twas instead “Jumbo”;

  • Rate cut history:  So far this century — save during times of extreme financial distress — rate cuts otherwise have always been in units of -0.25%.  The three exceptional periods were 1) 911 and the DotComBomb; 2) the FinCrisis; and 3) COVID.

Such logic circumvented, as Squire would say, ’tisn’t about us.  Simply stated we were wrong; so let’s move on.

“But hang on mmb, ’cause maybe the Fed now thinks ‘extreme financial distress’ is coming…“

Oh come now, dear Squire.  With “Old Yeller’s” Treasury Trillions desperately coming due, an electorate bent on lack of so-called “Presidential timber” even as the civil society collapses, and the S&P 500 truly trading at 41.9x earnings with a market cap of $49.8T supported by s StateSide liquid money supply (M2) of “just” $21.1T, what could possibly go wrong?  Nothing to see here.  So again, let’s move on … to Gold!  Here’ tis, flying as does Helen Aberson’s and Harold Pearl’s fabulous Dumbo from 1939, (*later to be trademarked by what today is Disney Enterprises, Inc.):

Suitable for framing is the above graphic of Gold’s weekly bars from one year ago-to-date.  And yes, price having settled yesterday (Friday) at an All-Time Closing High of 2647, as therein noted ’tis still stunningly cheap relative to the debasement of the Dollar.  Indeed per yesterday’s record intra-day high of 2651, Gold trades at a -29% discount to its 3727 debasement value, per the opening Scoreboard.

And then there’s Silver:  per the graphic’s table, the Gold/Silver ratio of now 84.0x is well-above its century-to-date average ratio of 68.4x, so much so that were Silver to snap-adjust to such average, rather than priced today at 31.50, she’d be +23% higher at 38.67.  Moreover, whilst Gold is at an All-Time High, Silver’s current 31.50 level is -37% below her own All-Time High of 49.82 recorded away back on 25 April 2011.  Ad nauseum:  “Don’t forget Sister Silver!”

Fortunately for the aforementioned Econ Baro, its multiple months (May into August) of nausea waves have morphed into somewhat blessed relief.  Having bottomed one month ago to the day (on 21 August), the Baro has since been climbing out nicely.  For this past week alone, nine of the Baro’s 14 incoming metrics improved period-over-period, notably including September’s New York State Empire Index and that for National Association of Homebuilders, plus August’s Housing Starts and Building Permits, as well as Industrial Production.

Still stumbling however (and not surprisingly so given the overall downward track of the Baro) was the Conference Board’s negative “lagging” indicator of Leading Indicators; (for you newer readers, we regularly refer to them as “lagging” given the Baro significantly leads them).  Still, with the StateSide economy’s recent advance, add in the Fed’s “Jumbo” rate cut and what’ll we get?  Renewed inflation?  Yet if the economy resumes folding, indeed stagflation?  (Right, we’re not supposed to go there…)  Here’s the Baro:

‘Course, all the post-Fed excitement is over the stock market’s “Going to a Go-Go” –[The Miracles, ’65].  But as we “X’d” (@deMeadvillePro) last evening, the MoneyFlow of the S&P 500 — as regressed into S&P points — is vastly underperforming the Index itself.  Be it by the latest weekly, monthly, or quarterly measure, the euphoric buying to a record high (5734) is at best thin as we below see per one of our favourite market-leading indicators.  We thus anticipate lower S&P levels near-term; after all, ’tis the first day of “fall”; (write it down):

Specific to Gold, as does Dumbo, ‘twould be great to see it continue flying high in the sky.  However price is getting somewhat stretched above its “smooth valuation line” relative to movements vis-à-vis those components comprising our five primary BEGOS Market (Bond / Euro / Gold / Oil / S&P 500).  Per the panel at lower left, we see Gold denoted as presently being +134 points “high” by the oscillator (price less valuation).  Obviously that is a near-term trading measure, given that Gold most broadly (as earlier noted) is better than -1000 points below its debasement value.  Too, within this near-term trading vein, the panel at lower right is Gold’s EDTR (Expected Daily Trading Range), presently set for Monday’s session at 34 points.  (Naturally, you can view all the daily updates to these metrics at the website):

Next let’s go to Gold’s two-panel graphic of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  To be sure, the “Baby Blues” of trend regression consistency have been spot-on brilliant:  as we on occasion quip:  “Follow the Blues instead of the news, else lose yer shoes”.  Meanwhile, the Profile clearly shows 2607 as Gold’s firmest near-term volume-supportive price:

Looking ever more similar to Gold is Silver by her daily bars (below left) and Profile (below right).  Still, given Sister Silver’s wayward tendencies to go waltzing off with Cousin Copper, we’re not that confident about 31.00 holding as the denoted dominant near-term trading supporter, (albeit Copper has been firming through the past six weeks).  But as we’ve said, whereas Gold broadly is still cheap, Silver remains super cheap(!)  Here’s the graphic:

Having opened with the Fed, let’s close with same.  Over here, financial friends with whom we spoke almost all agreed that the Fed’s rate cut would be -0.25% (as, in fact, voted FOMC member Michelle Bowman), although a case was made for -0.50%, if for no other reason than a shift from the prior 5.25%-5.50% target range to now 4.75%-5.00% wasn’t that material of a change, (whereas from say 1.50% to 1.00% would be quite significant).  But again as earlier cited, should the economy be garnering some renewed strength with money now a bit easier by which to come, then shall inflation add to a higher sum?  Better to not be a dumbo without Gold, but fly as Dumbo with that which you hold.

Which brings us to this cool view of Disney’s Dumbo 1/4oz. Gold coin:

Now that really is the only way to fly:  Gold High!

Cheers!

  …m…

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

The Gold Update: No. 774 – (14 September 2024) – “Fresh Gold Highs for Buyers Wise”

by

The Gold Update by Mark Mead Baillie — 774th Edition — Monte-Carlo — 14 September 2024 (published each Saturday) — www.deMeadville.com

“Fresh Gold Highs for Buyers Wise”

Seasoned supporters of Gold well remember the late, great Richard Russell (decd. 2015), who said, (as on occasion herein reprised):  “There’s never a bad time to buy Gold.”  Surely in his ascended state, his spirit veritably senses vindication of such declaration.

Indeed:  Gold per the December contract settled yesterday (Friday) at 2606, its highest-ever closing price, en route having traded up to 2615, +45 points above the prior All-Time High recently recorded on 20 August at 2570.  And thus The Gold Update’s nearly 15 years of querying “Got Gold?”, too, is being vindicated.

Since our first edition dated 21 November 2009, the price of Gold is +126% from 1151 to now 2606.  Oh to be sure, the Great American Savings Account (aka The S&P 500, “Casino 500”, “Airhead 500” et alia) is across the like stint +415% from 1091 to now 5626, (plus all those dividends en route).  Yet as we regularly caution from “The Means Reversion Dept.”, the S&P’s “live” price/earnings ratio today is 41.6x which is +70% above its inception (in 2013) at 25.4x, whereas Gold today at 2606 is -30% below the opening Scoreboard’s debasement level of 3726

“So why are you going on about all this, mmb?”

Because simply, Squire, were both Gold and the S&P to revert to such means at this instant, the yellow metal would instead be +224%, ahead of the “Casino 500” +215% (again, before dividends).  Still, not much difference there, however means reversion eventually recurs and shakes emotive folks out of stocks, whereas Gold buyers do otherwise.  (“Tick tick tick goes the clock clock clock…”)

And given the yellow metal’s recent run to these record high skies, Gold buyers clearly have been wise.  The following chart is of Gold by the month from the year 2020-to-date.  The key here is the region of the lower panel thus far in 2024.  Each green bar is the month’s profit per Gold contract purchased.  So thus far through the nine trading days of September, the height of the rightmost bar as noted is $7,020/contract, had you bought one at the month’s opening precise price of 2536.0.  The gain to the current precise price of 2606.2 is +70.2 points which by the leverage of $100/contract yields that $7,020; (for you home-scorers, that is a nine-day gain of +60.8% given a per contract margin requirement of $11,550).  But the point is: the year-to-date buying participation in Gold is the best ’tis been since COVID kicked in back in 2020.  In fact, per the barely visible red bars since a year ago, for Gold ’tis been all monetary inflow:

‘Course, beyond the catalyst of currency debasement, ours is not to reason “why” Gold is getting the buy.  In a sense, the Federal Reserve’s initial -0.250% FundsRate cut this next Wednesday (18 September) ought by now be “priced-in”.  As to some degree, too, is further global instability per the pending StateSide election outcome.  Let’s cue it again:  “Got Gold?”

We’ve got Gold right here in turning to its weekly bars and dotted-parabolic trends from one year ago-to-date.  And are the strings of blue dots ever one’s friend … barring your being one of those Smart Alec Shorts.  Welcome to 2600:

Meanwhile, trying to un-squeeze itself is the Economic Barometer, it having received a boost these last few weeks.  And given “the rising tide of inflation lifts all boats”, August’s newly reported levels thereto at both the wholesale (Producer Price Index) and retail (Consumer Price Index) levels on balance pipped back up a bit, notably in their “core” readings.  This adds to our aforementioned assessment that — come Wednesday — the Fed shall only cut their FundsRate by 25 basis points rather than by 50, albeit the latter curiously is still sought per the FedFundsFutures.  But let’s see if that trade unwinds as we work toward Wednesday.  Here’s the Baro:

You tell ’em, Yellen; but more aptly by the Baro, it instead appears “deep into a recession”.  (Just sayin’, but that’s Washington…)

Next we go back to the precious metals, the following two-panel graphic featuring on the left Gold’s daily bars from three months ago-to-date, with same on the right for Silver.  For the yellow metal ’tis been “all on go”, whilst for the white metal — despite her recent rightmost up-kick — she’s been more aligned with red metal Copper these recent months.  Further, Sister Silver by price continues to lag Gold:  the century-to-date average Gold/Silver ratio is 68.4x … but the actual ratio at present is 83.9x.  And yes, just as both Gold inevitably reverts to its Dollar debasement value and the S&P 500 to its average P/E ratio, so too does the Gold/Silver ratio revert to its mean:  which with Gold today at 2606 in turn prices Silver +23% above her current 31.07 level at 38.08.  Thus as we yet again ask “Got Gold?”, we in kind also reprise “Do not forget the Silver!”  Here’s the graphic:

As to the respective 10-day Market Profiles, here they are for Gold (below left) and for Silver (below right).  Whilst ’tis nice to see no overhead trading resistors, there are for both metals dearths of volume activity below current levels, which for you WestPalmBeachers down there means don’t expect these two markets to keep moving up in a straight line.  Too, should you peek at the website’s Gold page, you’ll see that price by the “Market Value” metric is +114 points above its smooth valuation line (as therein described).  Either way, these Profiles at present are pretty:

So with respect to fresh highs for Gold,  let’s update the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3726
Gold’s All-Time Intra-Day High:  2615 (13 September 2024)
2024’s High:  2615 (13 September 2024)
10-Session directional range:  up to 2615 (from 2504) = +111 points or +4.4%
Gold’s All-Time Closing High:  2606 (13 September 2024)
Trading Resistance:  none per the Profile  2341
Gold Currently:  2606, (expected daily trading range [“EDTR”]:  32 points)
Trading Support:  nearby per the Profile 2605 / 2596 / 2582, then 2544-2526
10-Session “volume-weighted” average price magnet:  2545
The Weekly Parabolic Price to flip Short:  2415
The 300-Day Moving Average:  2159 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

Thus into the new week we go, with 14 metrics due for the Econ Baro, plus of course the Federal Open Market Committee’s Policy Statement on Wednesday.  More broadly, bear in mind that:

  • Equities per the S&P 500 remain exceedingly (understatement) expensive given the lack of supportive earnings generation;

  • Gold despite new All-Time Highs remains cheap relative to Dollar debasement;

  • Silver relative to Gold remains super cheap!

And so to segue from those closing notes:

Indeed be buyer-wise with Gold (and Silver!) as the prize!

Cheers!

  …m…

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

The Gold Update: No. 773 – (07 September 2024) – “Gold Stodgy; Stocks Dodgy”

by

The Gold Update by Mark Mead Baillie — 773rd Edition — Monte-Carlo — 07 September 2024 (published each Saturday) — www.deMeadville.com

“Gold Stodgy; Stocks Dodgy”

Per our prior missive on Gold having recorded its second-narrowest trading week of 2024 (by percentage distance between high and low), now this last week’s performance perhaps is best categorized as “stodgy”, which by the Oxford English Dictionary (for you WestPalmBeachers down there) in part is defined as “lacking in spirit or liveliness.”  To wit, by entering this past trading week with an EWTR (“expected weekly trading range”) of 81 points, Gold’s actual range from low-to-high was just 70% of that at 57 points, price settling yesterday (Friday) at 2527, despite all the “Fed” this, and “Jobs” that, and stocks’ “Worst Week” in a year, suddenly replete with FinMedia fear.

In turn, that 2527 price level is (for those of you scoring at home) -32% below Gold’s Dollar debasement valuation of 3726 as above depicted in the upper panel of the Gold Scoreboard.  Yes, we regularly harp upon such undervaluation if for no other reason than Gold historically catches up to its supply-adjusted debasement value (i.e. per the Dollar’s green “M2” money supply line) as shown in the Scoreboard’s righthand panel.  Do not lose sight of that fact, lest you end up in the vast “woudda shoudda coudda” crowd who are without Gold once it justifiably really takes hold.

Still, stodgy as it seems, our broader graphic of Gold’s weekly bars from one year ago-to-date remains robust and cheerful.  Here ’tis:

“Robust” indeed, given Gold’s firmly rising regression trendline.  “Cheerful” to be sure, as the last three red-dotted parabolic Short trends have been but three weeks apiece.  Thus “stodgy” as it may presently be (at the risk of using a “woke” adjective), “awareness” of Gold seems to be picking up, albeit we regularly read that almost nobody owns it.  Still, when ’tis time for “Old Yeller” to pay that looming U.S. debt bill, shall the Federal Reserve have to again turn the crank on the money mill?  Mind that Dollar Index as ’tis looking a bit ill, (your personally mitigating such by taking the Gold pill):

‘Course, the Buck’s upside pluck into September 2022 per the above weekly chart clearly came in tandem with the Fed raising its Funds Rate.  But now that the Open Market Committee per its 18 September Policy Statement shall initially reduce said rate by -0.250%, the bang for the Buck is starting to wane.  Yes, the nattering nabobs of Gold negativism love to swiftly point out that the yellow metal offers no yield.  But given Gold’s aforementioned undervaluation of -32%, that “catch-up yield” by price alone looks excellent to us.

Meanwhile “catching-down” (if you will) is the “dodgy” stock market.  ‘Tis always entertaining to read the FinMedia freak-out whenever the market puts in even just a pimple of a correction.  “S&P 500 tumbles Friday to post worst week since 2023” trembles CNBS, (our being more precise, since that ending 11 March 2023).  True, the S&P’s net loss for the past week was -4.2%.  But let’s put that in context:

  • from the year 2000-to-date — through the DotComBomb, FinCrisis, and CrazyCovid — this past week’s net loss for the S&P 500 was its 54th worst across those 1,288 weeks.  “Oh dear!”

Hardly ho-hum, but the fear elicited through the FinMedia was both formidable and (for us) fun.  And it shows just how complacent have become the “youngsters” of modern-day Wall Street.  Let’s again reprise BTO from ’74 with “You Ain’t Seen Nothing Yet” 

“Well, it is September, mmb…”

So ’tis, Squire, and yes, across the 54 years from 1970 through 2023, by average net monthly percentage change, September does rank as the year’s worst month for the S&P 500, followed by February; the best two months are April (surprise!) and November.  (The once highly-vaunted month for the “January effect” ranks fourth-best of the 12 all told).

But in support of Squire’s point, September is the notorious month of so-called tax-loss selling season and fiscal year-end for many a mutual fund.

Yet today, the S&P 500 more broadly refuses to be severely shaken.  The ongoing “out-of-sight, out-of-mind” level of our “live” S&P 500 price/earnings ratio eternally living in the 30s and 40s remains inanely uncanny.  Again remindful of one J. B. Cohen:  “…in bull markets the average [P/E] level would be about 15 to 18 times earnings.”  However:  that for the summation of the 503 S&P constituents settled yesterday at 38.2x (price ÷ trailing twelve-month earnings x market cap weighting, with earning-less stocks ascribed a P/E of their stock price).

‘Course the culprit supporting it all is the $7T COVID monetary injection essentially (as we’ve mathematically proven) having ended up in the stock market.  And ’tis still there, refusing to go anywhere:  thus the bubble.  Risk-free debt is boring and doesn’t work well in showing off at cocktail parties.  As for all those talking marked-to-market millionaires … one day they’ll morph into head-hanging thousandaires.  ‘Tis only fair … but beware:  the next P/E means reversion shan’t be a happy excursion.

However, fairing a bit better of late is the Economic Barometer.  In just the past holiday-shortened StateSide week, of the 13 incoming metrics for the Econ Baro, nine improved period-over-period, the notable standouts being July’s Factory Orders, Q2’s revision to Productivity, and for August both Hourly Earnings and The Institute of Supply Management’s Services Index.

Noted however, was the really rotten ADP read on August’s Employment:  for the past post-COVID 36 months, the average monthly jobs gain had been 278,000; this time ’round the number was just 99,000, some -34% below consensus, not to mention the July reading being revised lower as well.  But “Labor’s” number (dare we say “of course”) improved, as on balance did the Baro:

So does all such stalwart economic improvement ward off recession?  From the “Dept. of Say It Ain’t So, Joe” we’ve this (hat-tip Dow Jones Newswires):  “The bond market just flashed a reliable recession signal.”  Glad to see them just now figuring this out.  The Econ Baro’s been portraying such for the past half year … (but as you know, it leads everything else).  “Fuses as usual in the white security box.” –The RAF’s unnamed Air Vice Marshal, “Thunderball”, ’65]

Still, anything but thundering is stodgy old Gold.  In below viewing our two-panel graphic, on the left with price’s daily bars from three months ago-to-date we’ve Gold’s baby blue dots of trend consistency dropping off, not even have achieved the key +80% axis, whilst on the right in the 10-day Market Profile, the 2540-2560 zone shows as overhead volume resistance.  As noted in recent missives, our forecast high for the year of Gold 2375 we now view as mid-structural price support:

Silver’s drill is similar, albeit with a weaker bent.  Like those for Gold, Silver’s “Baby Blues” (below left) are falling, whilst her Profile (below right) depicts major volume resistors at 29.15, 29.90 and then the 30.30-30.45 zone.  And with the Gold/Silver ratio now back up to nearly 90x (presently 89.4x), what can one say other than “Poor ol’ Sister Silver!”

Let’s call it a week here with this monetary anomoly.

We earlier mentioned the stock market’s buoyancy given the presto-chango $7T post-COVID money supply injection, indeed there being so much dough sloshing to and fro that — save for stocks — there’s ostensibly no where else for it to go in this Investing Age of Stoopid à go-go.  But then, too, is the stark reality of S&P 500’s market cap having settled yesterday at $47.3T supported by a liquid StateSide money supply (M2) of “only” $21.1T, i.e. not nearly enough dough!  Whoa!  And yet, you’d love to see your kid become a Wall Street pro?  Oh pity the poor floor specialist, don’t you know…

Better instead, buddy-boy, go buy some Gold!

Cheers!

  …m…

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

The Gold Update: No. 772 – (31 August 2024) – “Gold’s 2nd-Narrowest Week; GDP Defies Belief”

by

The Gold Update by Mark Mead Baillie — 772nd Edition — Monte-Carlo — 31 August 2024 (published each Saturday) — www.deMeadville.com

“Gold’s 2nd-Narrowest Week; GDP Defies Belief”

2024’s second quadrimestre is now complete.  So let’s start with our title’s second phrase “GDP Defies Belief”.  For Q2’s annualized GDP growth rate was just raised from an improbable first estimate of +2.8% to now an impossible second estimate of +3.0%.

“Questioning the Bureau of Economic Analysis, mmb?”

Just doing the math, Squire.  Here’s the Economic Barometer from one year ago-to-date.  The puke-green portion of the Baro’s line is the May/June/July reporting period for Q2 data, (which for you WestPalmBeachers down there covers economic activity for April/May/June).  Does anyone actually believe this even approximates +3.0% GDP growth?

To be sure, the Econ Baro takes in some 50 metrics per month, whereas the StateSide Gross Domestic Product calculation is far more blunt, (true to the modern art form of throwing a few buckets of paint up against the barn wall and then seeing what happens).  Creativity aside, the GDP’s simplest form is merely the sum of both Private and Public Spending as offset by the Trade Deficit.  That’s it.

Thus given (as you regular readers know) the Baro provably has led (for some 26 years) the lagging conventional wisdom assessment of the economy, we’ve been ever so dubious over this reported Q2 GDP +3.0% growth pace.  And electioneering notwithstanding as regards Washington’s bureaucratic Bureau of Economic Analysis, ’tis purportedly an apolitical agency.  But quite obviously the numbers don’t add up.  “Got Gold?”

Which brings us to the first phrase of this week’s title “Gold’s 2nd-Narrowest Week”,  specific to the year thus far.  Indeed for 2024’s 35 trading weeks now in the books, the past five trading days missed being the narrowest weekly range by the tiniest of margins, (second only to that ending 23 February).  Measured by percentage distance between Gold’s high and low, last week’s range was 1.48%:  the average through the first 34 weeks was 3.31% … slow old Gold!  In settling yesterday at 2536, Gold’s net loss for the week was a scant -13 points.  In turn, this means we’ve yet to see a pullback of at least -100 points following price’s recent (albeit marginal) set of All-Time Highs.  Such -100-point pullbacks otherwise have been Gold’s wont on all prior All-Time High occasions earlier this year as we herein documented two missives ago.

“Well, mmb, that’s ’cause now we know the Fed is about to cut interest rates…”

Which they shall so do (but see our wrap’s Barron’s boo-boo) per the Federal Open Market Committee’s Policy Statement on 18 September.  And ’twill be by just one pip (from the present target range of 5.25%-5.50% to 5.00%-5.25%).  Oh to be sure, there are those parroting pundits looking for a two-pip dip.  But:  as noted a week ago ‘twould be poor optics for the Fed to so do, and — of course — we now know the U.S. economy is healthily growing at a groovy +3.0% annual pace.  Life is Goldilocks Great!  

Further, (courtesy in part from the same Bureau of Economic Analysis along with the Bureau of Labor Statistics), the Fed has successfully tamed inflation.  (You can tell, right?)  Gathering inflation data reported for July, here’s our updated table comprised of retail inflation (Consumer Price Index), wholesale inflation (Producer Price Index) and “Fed-favoured” Personal Consumption Expenditures.  Note the lower rightmost July annualized average:  a joyous below-target +1.8% for the Fed and The Nation!  “Celllll-a-Bration…” –[Kool and the Gang, ’80]:

As for Gold itself, we sense already well-priced in is a one-pip Fed dip.  So to Gold’s weekly bars we below go, their charted from one year ago-to-date.  Note the five rightmost closing pips all are above the present slope of the trendline and that the newest parabolic blue dot is nearly spot-on our forecast high for this year.  Indeed that 2375 level we view (as herein cited a week ago) to be mid-structural support.  Too, for you seat-of-the-pants traders, Gold’s six-hour Parabolics top the yellow metal’s segment on our Market Rhythms page:  nine of that study’s past ten Parabolic flips have followed through by at least 12 full points, the average moreover being 43 points … just in case you’re scoring at home.  ‘Course, in this business, cash management = account survival.  For as the “Triple-Negative Dept.” reminds us:  nobody (human nor algorithm) is never wrong.  Here are the weeklies:

Now let’s add in our set of key precious metals equities, again from a year ago-to-date.  And how ’bout that Agnico Eagle Mines (AEM):  +66%!  (‘Tis nice when your earnings improve +65% from the like quarter a year ago).  Then in descending order of improvement we’ve Newmont (NEM) +34%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +31%, Gold itself +29%, Pan American Silver (PAAS) +23%, the Global X Silver Miners exchange-traded fund (SIL) +22%, but still Franco-Nevada (FNV) -15%.  “Yet, ya luv it when the metal equities’ upside leverage kicks in!”

Speaking of love, everyone loves being Number One, which is exactly Gold’s year-to-date placement per our BEGOS Markets Standings by percentage change with eight months of 2024 now recorded.  ‘Tis a beautiful thing:

Let’s, too, go ’round the horn for all eight BEGOS Markets across their past 21 trading days (one month) in tandem with their baby blue dots of each grey trendline’s consistency.  A rather “Dollar-weaker” picture all told, and notably so for the metals, with Silver and Copper nearly identical by both price pattern and their respective “Baby Blues”:

From which we move to the precious metals’ 10-day Market Profiles for Gold on the left and Silver on the right.  The length of each horizontal bar equates to the contract volume traded for that price.  Thus for Gold, (presently 2536), the 2543-2551 area appears resistive.  As for Sister Silver (presently 29.25), her overhead line-in-the-sand is 29.95:

Toward this week’s wrap, with August behind us, here is our monthly view of the stratified Gold Structure from some 16 years ago-to-date.  And “more up” is always great:

And so we wrap we these three notes:

Note One:  ‘Twouldn’t be The Gold Update without a statement on stocks.  Our bailiwick for such is, naturally, the S&P 500, which month-after-month, indeed year-after-year, refuses to cave to an insanely high price/earnings ratio, our “live” reading at this writing 40.3x.  That is +59% higher than its inception in 2013 at 25.4x, (i.e. the earnings aren’t there).  Too, as we’ve been recently “X’ing”(@deMeadvillePro), the MoneyFlow relative to the S&P’s recent rally is weak.  Add to that, the S&P is now 12 days “textbook overbought”, bang-on-time for the start of September which — by conventional wisdom — is the stock market’s worst month of the year.  Shall you vacate the throng before it all goes wrong?

Note Two:  Nvidia (NVDA).  ‘Tis exceedingly rare that we get specific to a stock, simply because equities’ risk is too much for us to bear, (our preferring to rest easy in the sanctity, safety and serenity of the commodity futures markets).  But that said, ’twas impossible to hide from the hype ahead of Nvidia’s earnings report, even knowing in advance ’twas to be but a fraction of that earned a year earlier.  To wit:  whilst waiting for the bus (oh yes) a few days ago, a wanna-be athletically-clad gentleman walked passed us, excitedly going on his phone about Nvidia’s then still upcoming earnings report.  Elsewhere pre-report we heard as well “I just bought more Nvidia!”  Then came that report and the 70x earnings stock got its comeuppance (or in this case, comedownpance … yikes).  Then followed this opening to an opinion spanking courtesy of Dow Jones Newswires:  “The Dumb Money Poured into Nvidia Ahead of Its Results … Retail investors — known pejoratively as the ‘dumb money’ on WallStreet – loaded up on Nvidia ahead of the microchip maker’s poorly received results.”  Let’s face it folks:  paying $70 for something that earns $1 is pretty dumb.

Note Three:  Speaking of DJNw, did you catch yesterday’s Barron’s boo-boo?  In recent years we’ve on occasion referred to the “children’s writing pool” at the once highly-regarded publication.  But this piece was so off-the-mark that we think it was instead composed by “AI” (“Assembled Inaccuracy”).  Using our trusty tablet, we screen-captured the moment.  Here — unaltered — ’tis:

 

So don’t you boo-boo, lest get booed … ensure you’ve Got Gold in your brood!

Cheers!

  …m…

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

 

The Gold Update: No. 771 – (24 August 2024) – “Gold Gradually Grips as the Dollar Decidedly Dips”

by

The Gold Update by Mark Mead Baillie — 771st Edition — Monte-Carlo — 24 August 2024 (published each Saturday) — www.deMeadville.com

“Gold Gradually Grips as the Dollar Decidedly Dips““

FedChair Powell’s “Friday Thunder” echoingly careened throughout the cascading heights of Wyoming’s Grand Tetons, across the nation and ’round the world.  “The time has come” rate cut quip resulted in a decided Dollar dip, Gold in turn getting the bid for a gradual grip to barely record a winning week in settling yesterday at 2549, (a scant +3 points above the prior Friday settle of 2546).  For ‘twould now appear the Federal Reserve’s Open Market Committee shall — come their 18 September Policy Statement — vote to reduce the Bank’s Funds Rate a pip.  Some surmise two.  Either way, “hip-hip”.

We say “decided“ for the Dollar, which from mid-year already has been selling off, Friday being the second-worst (on both a points and percentage basis) of the 163 trading days year-to-date for the Dollar Index.  And “gradual” for Gold as the post-Powell push wasn’t enough to make yet another yellow metal All-Time High, the most recent having been established this past Tuesday at 2570, (basis December futures).

Indeed — as detailed in last week’s missive — we remain sensitive to Gold this year having habitually sold off following marginal All-Time Highs.  To wit, after achieving Tuesday’s 2570 level, price within two days plopped to Thursday’s low of 2506.  Such -64 points (-2.5%) of price erosion still pales in comparison to every year-to-date post-All-Time High three-figure drop per our prior piece’s table.  And in looking at Gold vis-à-vis our BEGOS Markets Value measure (that gauges Gold’s price changes relative to those of the four other primary markets which comprise BEGOS, namely the Bond / Euro / Gold / Oil / S&P 500), we below see that price today at 2549 is hovering +124 points “high” above the smooth valuation line:

‘Course as we regularly remind — courtesy of the “Keeping One’s Eyes on the Prize Dept.” — per the opening Gold Scoreboard we’ve the current price of 2549 a vast -31% below the yellow metal’s Dollar debasement value of 3706, (including honestly accounting for the increase in the supply of Gold itself).  And given history rhetorically repeats, price in due course shall reach up to such value, nearer-term declines en route essentially as noise within Gold’s broader climb.

“Well, careful there, mmb, as price’s 46% decline from Sep 2011 to Dec 2015 can hardly be called ‘noise’…“

And, (as Squire well remembers despite such devil’s advocate aphorism), ’twas leading into those days that we repeatedly wrote of Gold having “gotten ahead of itself”, following which came price’s substantial plummet.  However, today — courtesy of the “But Then Comes the Overshoot Dept.” — Gold clearly remains ever so low relative to rampant debasement, just as the S&P 500 is ever so high relative to impotent earnings.  To be sure, ’tis written:  “The market is never wrong, but it can be terribly misvalued”.  Which for you WestPalmBeachers down there implies (assuming one is properly positioned whilst incorporating prudent cash management) means reversion is a beautiful thing.

“They won’t get that at all, mmb…“

But “they”, dear Squire, are vital to taking the other side of the trade.  To which let’s segue to the trade of Gold by its weekly bars from one year ago-to-date.

And as therein confirmed, nearly a third of this year’s 34 trading weeks have recorded Gold All-Time Highs, indeed during four of the past six.  Note, too, the green line (our 2375 forecast high for this year): it nicely bisects the structural support zone constructed across the prior few months (for those of you scoring at home seeking a “buy on the dip” point).  Indeed from the current All-Time High of 2570, a run down to at least 2375 would be in line with the afore-referenced table from a week ago as to price pullbacks following marginal All-Time Highs.  As for the Gold/Silver ratio now 85.4x, ’tis at its lowest closing reading since this past 30 July, (albeit still well-above the century-to-date average of 68.4x).  “Don’t forget the Silver…”

Forgettable, however, remains the Economic Barometer, although it ticked higher into week’s end on improved Home Sales, both Existing and New.  Yet surprising to all who do not follow our Econ Baro, (i.e. six-figure analysts, the FinMedia, and parroting pundits) was the Conference Board’s report of  “Leading Indicators” having dropped -0.6% for July, twice as poor as experts’ “expectations” for only a  -0.3% demise.

But ’twas hardly a surprise to the wise who monitor the Baro, for ’tis been plainly bad, (which is why we regularly refer to said report as “Lagging” rather than “Leading”).  And for the Fed (as ’tis said) “being behind the curve”, clearly that is the case.  Our case for a rate cut back on 31 July did not come to pass, which lends credence to a two-pip reduction on 18 September.  But then the optics would be poor for the Fed being too slow, thus we think ’twill be but one pip they’ll go.  Either way, as you know, the truth remains in the Baro:

More truth be told, the S&P 500’s August rally (from the 5th’s low of 5119 to the 22nd’s high of 5643, a 14-trading day gain of +10.2%) is quite vapid of supportive MoneyFlow, as we again “X’d” (@deMeadvillePro) this past Thursday.  Here below from the website is the MoneyFlow (regressed into S&P points) relative to the change in the Index itself for the past week, month and quarter.  Obviously the MoneyFlow’s leading characteristic portends this rally’s staying power as unrealistic:

Add in the fact that the S&P is now seven trading days “textbook overbought” along with a “live” price/earnings ratio of 41.5x and The Herd is facing GERD, (a little medical lingo there).  Healthy, however, is Gold, below for which we’ve the 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 linear regression trend consistency are just now running out of puff, which coincides with the notion of near-term price pullback following this year’s marginal All-Time Highs.  Still by the Profile, there’s volume trading support from 2511-to-2493, (but we’ll see…):

But again using the same construct for Sister Silver, the picture remains a bit different, her having been carrying on of late with Cousin Copper.  Note in her daily bars (below left) the two encircled baby blue dots.  You regular readers and website followers already know the drill here, but as with the passage of time we pick up new folks, here’s how the leading attribute of the “Baby Blues” works:

  • When after having been above the +80% axis the “Baby Blues” confirm piercing beneath it, we view that as a “sell” signal.  And instead, ’tis a “buy” signal if eclipsing up through the -80% axis. 
    Reprise:  “Follow the Blues instead of the news, else lose yer shoes”:

Meanwhile by Silver’s Profile (above right) there’s quite a dearth of trading between 29.05 and 28.40; thus the white metal could readily slip through that zone, and certainly so should both the yellow and red metals endure some near-term decline.

In sum, Gold looks great even should anticipated decline near-term dominate.  And specific to the Fed, soon after the Chair’s remarks yesterday — our instead purely watching markets’ reactions — we internally messaged this notion:

“Haven’t a clue about Powell’s remarks (didn’t listen) but all eight of the BEGOS Markets are doing well, whilst the Dollar has made a nine-month low.  So … ‘guess’ is Powell gave relative assurance for an 18 September rate cut.  ‘Course, they’re not really supposed to ‘tip their hand’.  But a benign PCE is expected next week which would certainly lock in a rate cut.”

Thus a little deMeadville inside baseball there.  Or as was recently quipped:  “Ya can read deMeadville, or ya can wait for everyone else.”


“You tell ’em, mmb!”

‘Tis always a gradual team effort, Squire, leading off decidedly with Gold!

Cheers!

  …m…

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

The Gold Update: No. 770 – (17 August 2024) – “Gold Again Gains a Marginal All-Time High”

by

The Gold Update by Mark Mead Baillie — 770th Edition — Monte-Carlo — 17 August 2024 (published each Saturday) — www.deMeadville.com

“Gold Again Gains a Marginal All-Time High““

As herein penned last Saturday:  “…Gold is well within range for a fresh All-Time High (above 2538 basis December) in the new week…”

And so it came to pass, the yellow metal (basis December) trading yesterday (Friday) to as high as 2548, an albeit rather scant +10 points above that contract’s prior All-Time High of 2538 set this past 17 July.  (To further confuse, ’twas +25 points above 02 August’s 2523 “FATH” [Faux All-Time High] per Gold’s “continuous contract”).

“Marginal” either way perhaps, but they all count.  Regardless:  for the 5,944 trading days so far this century, Gold has now essentially recorded an All-Time High on 274 of them (which for those of you scoring at home is once every 22 trading days, i.e. once per month on average).  ‘Course, the standard deviation of that is massive:  after 06 September 2011, Gold did not record its next All-Time High until 24 July 2020, a “high-less” 2,236-trading-day run of nearly nine years.

But here’s where it gets interesting.  Recall The Gold Update from back on 25 May entitled “Gold’s Marginal High and Habitual Cry“?  The latter two words therein refer to Gold typically — and oft swiftly –getting dumped following just such marginal All-Time Highs.  Therefore were history to ad nauseam repeat, Gold shall be met with selling next week.  To wit, Gold’s recording of All-Time Highs this year-to-date, followed by fallout as the near-term fate:

 

“But I’m thinking maybe it’s different this time, mmb…“

Well, dear Squire, ’tis always requisite that one takes the other side of the trade.  Thus if you could kindly come to market with some serious size, you can skyrocket the silly Shorts beyond their stops as you relentlessly drive Gold’s price up.

But truly to Squire’s point:  note in the above table a lessening of points lost after each All-Time High, in turn more swiftly and satisfyingly squeezing the Shorts.  Puts one in mind of Herbert Lom as Chief Inspecteur Dreyfus:  “I’m squeezing. And the more I squeeze, the freer I feel. I’m in ecstasy. And then suddenly, suddenly my problem is solv-ved.” –[The Return of the Pink Panther, UA, ’75]).

To be sure per the opening Scoreboard, Gold having settled the week at 2546 still finds it -31% below its Dollar debasement value of 3707.  But in assessing “The Now” and this recent hankering Gold has to pull back following fresh All-Time Highs, lets look to a nearer-term view of the yellow metal vis-à-vis its smooth valuation line.  Such line is borne of Gold’s price changes relative to those of the other four primary futures markets which comprise BEGOS (Bond / Euro / Gold / Oil / S&P 500).  Here’s the current year ago-to-date stance — appearing a bit stretched — as updated daily for the website:

Moreover, when markets breakout, obviously they deviate — on occasion significantly — from whatever mean by which they’re otherwise regularly measured.  So again per Squire’s notion, perhaps ’twill be different this time, (which for you WestPalmBeachers down there would mean Gold shan’t retract as has recently been its post-All-Time Highs wont).  En tout cas, on verra…

What we can presently see, however, are Gold’s weekly bars, again from one year ago-to-date, along with the dotted parabolic trends.   Per the graphic, Gold has better than 200 points of wiggle room between present price (2546) and the rightmost blue “flip-to-Short” dot at 2339.  Further, should price fall following this latest All-Time High, the 2300s in general look structurally safe for Gold:

But hardly does the Stateside economy look safe.  As we “X’d” (@deMeadvillePro) this past Tuesday:  “Econ Baro reaches its lowest oscillative level since 24 November 2009”, since slipping further still.  ‘Course if you don’t follow the Baro, you don’t see it; neither does the FinMedia nor Herd nor Fed.

However, we’re now told ’tis baked in the cake that not only shall the Federal Open Market Committee vote to cut its Bank’s Funds Rate come the 18 September Policy Statement, but that it may well be a double-pip cut of -0.50% as opposed to just -0.25%, the latter by the Economic Barometer saying they should already have so done on 31 July.  (Again, too bad the FOMC members don’t read deMeadville … a shameless plug perhaps, but most gratifying).  For here’s what they’re missing: 

Of the 19 metrics that came into the Baro this past week, ten were worse period-over-period:  thus nine improved.  But prior-period revisions hurt the overall performance of the mix, and down it went.  Our sense clearly is that most folks (including vaunted economic analysts) don’t see how poorly the economy is performing, (i.e. we actually do the math).  Amongst the “out to lunch bunch” came Dow Jones Newswires this past Thursday with “S&P 500 erases August losses as ‘irrational recession fears’ fade.”  But the day is lurking where ’twill suddenly whack ’em over the head and the U.S. shall once again regress.  Fortunately, however, per the above graphic:  folks stand to get all that “free stuff!”  And as just noted by DJNw,  just look at that stock market go up!  Life is great in the Investing Age of Stoopid.

Such statement bears our updating the following chart of the S&P 500 from better than 50 years ago-to-date.  You regular readers know the drill here:  the regression channel is based on the track of the S&P up to COVID’s arrival in March 2020 (vertical red bar), from which the channel is then extrapolated through now.  But came the Fed’s $6.9T infusion, all of which — as we’ve previously herein “proven” — basically found its way into the S&P 500.  Remember:  sans COVID, by the regression channel, the S&P would today be ’round 3000 and all therein invested would be happy as a clam.  Instead, we’ve the S&P’s “live” price/earnings ratio as shown at 40.7x versus its inception reading (in January 2013) of 25.4x.  Thus earnings indubitably haven’t kept pace with price.  And with the S&P today at 5554, to revert to such inception reading (which is inevitable upon it all going wrong) ‘twould place the Index down to 3466: 

Don’t think ’twill happen?  Look how weak the S&P’s recent “recovery rally” is from our MoneyFlow page.  “That can’t be good…”

“Or, mmb, earnings have to really take off…“

But hardly are they, Squire.  Indeed yesterday concluded Q2 Earnings Season.  For the S&P 500:  of the 433 constituents having reported, the good news is 70% of them bettered their bottom lines from a year ago, ranking the quarter as 10th best for individual constituent improvement from as far back as 2017.  Yet, the bad news is to get the P/E back down to 25.4x, earnings (cap-weighted to be consistent) need grow at an annualized 60% pace.  What was the pace for just completed Q2? 19%.  That’s it, (excluding 10 constituents that lost money).   But you still can get an annualized 5% risk-free pace from the three-month U.S. T-Bill.  Think about that.

Better still, think about Gold having just made a fresh All-Time High.  And notwithstanding near-term price reversion, one senses there are further levels up the Gold road with better than four months for this year remaining to unfold.   Too, there is so much on the table including uncertainties about global instability, StateSide politics, the endlessly overvalued stock market, and tons of $Trillions in debt due to be paid “Old Yeller’s” U.S. Treasury.  “Got Gold?”

But as we turn to the daily bars for the last three months of Gold on the left and Silver on the right, their correlation has morphed from positive to negative.  Indeed Sister Silver has suffered from casting off her precious metal pinstripes and donning her industrial metal jacket so as to hang with Cousin Copper, of whom as we noted a week ago has collapsed some -21% within the past three months, (see our Copper page).  Thus we’ve Gold at an All-Time High … but Silver (now 29.09) is an unconscionable -42% below her best level of 49.82 (25 April 2011)  You shan’t forget Sister Silver, shall you…

However by their 10-day Market Profiles, both Gold (below left) and Silver (below right) are at the top of their games with lots of lovely support levels as labeled:

Let’s therefore wrap with the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3707
Gold’s All-Time Intra-Day High:  2548 (16 August 2024)
2024’s High:  2548 (16 August 2024)
10-Session directional range:  up to 2548 (from 2406) = +142 points or +5.9%
Gold’s All-Time Closing High:  2546 (16 August 2024)
Trading Resistance:  none per the Profile  2341
Gold Currently:  2546, (expected daily trading range [“EDTR”]:  43 points)
Trading Support:  various per the Profile, but notably the 2511-2493 range
10-Session “volume-weighted” average price magnet:  2473
The Weekly Parabolic Price to flip Short:  2339
The 300-Day Moving Average:  2121 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

Following this past week’s onslaught of incoming economic data, that for next week is fairly subdued, highlighted on Monday (19 August) by The Conference Board’s lagging indicator of “Leading Indicators”, which quite rightly (duh!) will be a negative reading, given our Baro is leading.  Otherwise fundamentally, there’s so much on the plate, so much can change! 

So hang on to your change given more Gold highs within range! 

Cheers!

  …m…

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

The Gold Update: No. 769 – (10 August 2024) – “Hilarious Herd Hysteria; Gold Holds Its Area”

by

The Gold Update by Mark Mead Baillie — 769th Edition — Monte-Carlo — 10 August 2024 (published each Saturday) — www.deMeadville.com

“Hilarious Herd Hysteria; Gold Holds Its Area““

Let’s start with stocks, notably citing the hilarity of the FinMedia & Herd hysteria.  Not that we need be reminded, however this past Monday’s (05 August) selling underscored the stock market’s otherwise quintessential condition of complacency since any or all of the following stages (make your choice), courtesy of the “We Never Go Down Dept.”:

  • Initial expectations during October 2023 that the Federal Reserve must cut rates (even as they’ve yet to so do) … but the market zoomed higher;

     

  • Digesting during October 2022 the RUS/UKR incursion as by then having become an endless, ongoing normal part of life … so the market zoomed higher;

     

  • COVID from March 2020 having resulted in the Fed’s “creation” of ultimately $6.2T (+39%), which we’ve on occasion mathematically demonstrated “all” ended up in the S&P 500 … i.e. the market zoomed higher.

Indeed from the S&P’s COVID bottom at 2192 on 23 March 2020, the mighty index has increased by as much as +159% to 5670 on just this past 16 July.

But specific to our point about Monday — because the S&P impossibly dropped a net -3.0% in just that one day — the FinMedia & Herd went hilariously hysterical!  And in this ongoing context of The Investing Age of Stoopid, oh how those world-ending  FinMedia headlines had us rolling in the aisles!

  • Business Standard:  “Stock Market Crash“;

     

  • Fortune:  “Share price bloodbath“;

     

  • CNEWS:  “Les actions en chute mortelle” (stocks in fatal fall);

     

  • CNBC:  Per Chicago FedPrez Austan “The Gools” Goolsbee on if (IF?) the economy deteriorates, the Fed will “fix it”;

     

  • Bloomy:  “Traders ramp up bets that the Federal Reserve will step in with an emergency interest rate cut”;

     

  • Et alia “ad infinitum”.

Now here’s the really hilarious part… Ready?

Monday’s stock market “carnage” was the 92nd (“ninety-second”) worst net trading day for the S&P 500 thus far this century.  What that means for you WestPalmBeachers down there is that from 02 January 2001, there already had been 91 days that were worse for the S&P than Monday’s -3.0% net drop (intra-day low -4.3%).  By comparative honesty ’twas thus nothing more than “noise”, especially per the following logarithmic chart of the S&P century-to-date.  The red line denotes the lowest to where the S&P reached (5119) last Monday.  And yet, ’twas “World Ends!” per the red arrow:

 

 

To be sure, the whole FinMedia & Herd insanity emphasizes the parroting that passes sadly for “informative news”, (which is why some three decades ago we stopped watching “CNBS”, et alia).  The optics are that news entities no longer do the math; rather they just follow right along with competing agencies’ reports whist trying to outdo each other’s adjectives.  Hence our presentation of the above chart.  And given that correct perspective, “The Sell” obviously was nothing, and further, the S&P has come all the way back up to the “pre-disaster” level, toward settling yesterday (Friday) at 5344.  But as noted in the chart, the circuit breaker “limit-down” days are coming.  Ensure you’ve plenty of popcorn to enjoy that FinMedia & Herd meltdown.

As to the current state of the S&P 500:

  • ‘Tis now 12 days “textbook oversold”, although just mildly so;

     

  • With a week to run in Q2 Earnings Season, 70% of companies have bettered their year-ago bottom lines, which is an above-average pace;

     

  • But the Index’s albatross ’round the neck remains its exceedingly high “live” price/earnings ratio, now 38.6x — with risk-free money still paying 5% — should you care to do the math:

“““Whoomp! (There It Is)” –[Tag Team, ’93]).

Returning to sanity, here is Gold per its chart of weekly bars and parabolic trends from one year ago-to-date.  Whilst ’tis holding its area, yes, in Thursday’s (08 August) Prescient Commentary we penned:  “…Gold’s daily MACD is provisionally crossing to negative: per the current Market Rhythms list, that study for the yellow metal has profited by at least $2,600/cac (regardless of signaling Long or Short) for nine of the past 10 such crossovers…”  ‘Tis why we stated “provisionally”, for by Gold’s continuous futures contract, the negative MACD (moving average convergence divergence) crossover did not (at least yet) confirm.  Either way, as below depicted, Gold is well within range for a fresh All-Time High (above 2538 basis December) in the new week:

Further drilling down into “The Now” for Gold, here next is our two-panel graphic of price’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  The premium gap from some eight trading days ago has since filled, albeit the baby blue dots of trend consistency are rather erratic.  As for Gold’s Profile (all December contract data), the pricing field remains significantly congested, the more notable volume supporters and resistors as labeled:

But in turning to same for Silver, the bad news clearly is her pricing track (below left) being far more feeble than that for Gold, (yes, blame it to an extent on collapsing Copper which from 20 May to yesterday’s settle has dropped -21%).  Yet therein, the good news is Silver’s “Baby Blues” are poised to curl up above her -80% axis, which as you website enthusiasts know is an outright (given prudent cash management) “Buy” signal.  Too, per the aforeshown graphic of Gold’s weekly bars, the Gold/Silver ratio is still historically high at 89.7x:  adjusted to the century-to-date average (now 68.4x), rather than priced today at 27.50, Sister Silver would instead be +31% above that at 36.14 … just in case you’re scoring at home.  However, her Profile (below right) is similarly congested to that of Gold:

‘Course, the week would not be complete without the state of the Economic Barometer, which plainly is not good.

“Dare you instead say ‘stateless’, mmb?“

Nearly so there, Squire, our having had to rescale lower the Econ Baro’s axis (which we numerically never reveal, lest the world indeed truly end).  Regardless, ’tis ever so bleak.  However, the Baro’s saving grace is — its mathematically being an oscillator — that it can move upward as “things get worse more slowly” (to reprise Krugman from back in ’01).  And whilst this past week was very muted for incoming metrics (just five arrived), next week brings 18 reports for the Baro, which of course we update by the day per the website.  Again cue the BeaTles with “““Now and Then” –[’23]).

That’s right, Gools, you tell ’em, baby!  To which we wrap with rates.

As you valued regular readers know, given the Baro’s blow, we’ve been knowledgeably ahead of the deteriorating curve of the economy for better than three months now.  Admittedly, earlier in the year given the non-cessation of inflation, we mused over the Fed perhaps having to actually raise its rates.  But the with the economy’s demise in front of our eyes, through many a recent missive we’ve stated that the Fed must cut.  However, come the Open Market Committee’s Policy Statement just on 31 July, the Fed stood pat.  But then the stock market made its wee crack, and all of a sudden, FinMedia & Herd are proclaiming ’tis not just that the Fed must cut, but indeed so do now as an “emergency” measure, and moreover that it be a “double cut”.

“Well, mmb, a lot has happened in the last week and a half…“

Or better stated, dear Squire, nothing recently has happened because it already had happened. ‘Tis just that the FinMedia & Herd & Fed are all behind the curve.

But don’t you get thrown a hysteria curve…

…rather with Gold maintain your verve!

Cheers!

  …m…

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

The Gold Update: No. 768 – (03 August 2024) – “Gold Makes a ‘FATH’; Stocks Take a Bath”

by

The Gold Update by Mark Mead Baillie — 768th Edition — Monte-Carlo — 03 August 2024 (published each Saturday) — www.deMeadville.com

“Gold Makes a ‘FATH’; Stocks Take a Bath““

We’ll explain Gold’s “FATH” in the next paragraph.  But by now, we ought well be getting used to this.  Futures contacts — far and away the most liquid non-physical form of Gold trading purely by price — regularly “roll” from one expiry month to another, (but not consecutively), the current leap per this past Wednesday being from August to now volume-dominant December.  And given this lengthy five months of storage et alia costs to hold your Gold for delivery in December — but at today’s price — Gold futures per this new “front month” pack a lot of premium, inclusive too of the conventional wisdom perception for future lower interest rates/higher Gold levels.  Indeed assuming your having read last Monday’s “Prescient Commentary”, you already are aware that this time ’round Gold garnered +47 points of fresh December premium.  So combine that with price having recorded an up week (even sans premium), and Gold thus made a “FATH”.

“Meaning, mmb?“

Meaning, Squire, — with such +47 points of December “front month” premium — Gold made a “FATH”:  Faux All–Time High, per the so-called “continuous contract” indeed eclipsing the much sought milestone of 2500 toward trading as high as 2523 before settling out the week yesterday (Friday) at 2486.  “‘Tis a beautiful thAng!”

‘Course, specific to this December contract, 2523 was not its All-Time High — hence the “Faux” pricing notion.  (For those of you scoring at home, December’s contract high already was 2538 as traded on 17 July).  But reaching up to 2523 this past week was fairly near.

Still, per the yellow metal’s “continuous contract” which is used for broad time frame analysis, here below we see the rightmost “FATH” along Gold’s weekly bars’ path:

 

As therein noted, Gold’s weekly gain was a très cool +100 points, which includes the +47 points for December contract premium.  But that does erode away a little each day.  And even ex-premium, we’ll relish a weekly percentage gain of +2.2% every time.  Further, the blue-dotted parabolic Long trend gained a bit of breathing room, the “flip-to-Short” price of 2317 now a comfy -169 points below today’s 2486 actual price.

Thus it being month-end (plus a couple of days into August’s wend), ’tis time, too, for the key precious metals equities’ year-over-year view.  So as below shown, leading the percentage track pack is Agnico Eagle Mines (AEM) +55%,  followed by Pan American Silver (PAAS) +34%, Gold itself +29%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +25%, the Global X Silver Miners exchange-traded fund (SIL) +22%, Newmont (NEM) +19%, and yet Franco-Nevada (FNV) -10% post-Panamanian mining disruptions.  Still, the chart exemplifies the increase from percentage leverage of the equities beyond Gold itself, certainly so from March-to-date:

Again as ’tis just past month-end, here next we’ve the BEGOS Markets year-to-date standings.  And oh does a “little” Gold premium go a long way, the yellow metal thus leading the list +20.0%.  Were it not for the December contract premium, price would still be +17.7%, slotted in second spot just behind Sister Silver’s +19.4% performance.  Either way, seeing the two precious metals atop the stack means they’re well in the black.  And rounding out the podium in third spot is the S&P 500 +12.1% despite its sorely lacking substantive earnings support:  our “live” price/earnings ratio is now 37.8x, a whopping +49% above its conception at 25.4x back in 2013.  But such is life in this “Estimates are Everything Era”.  To the table we go with a big “Thumbs Up” for Gold:

In fact, ’tis to laugh:  with respect to the S&P’s taking a bit of a bath, recall this from last week’s missive?  “…the Associated Press referred to the intra-week selling as a ‘wipeout’.  Honestly … they … don’t know what a ‘wipeout’ is…”  Well folks, the “somehow still surviving” CNN jumped on the same band wagon just this past week with (get ready):  “Why the stock market is suddenly freaking out”.  How’s that for journalistic professionalism?  So the S&P’s weekly loss was -2.1%; (remember the first intra-day circuit breaker isn’t even instituted until -7%).  Across the last 52 trading weeks (which for you WestPalmBeachers down there is since this time a year ago), the S&P 500 has actually recorded six worse weeks than that just past.  “Who knew?”  The FinMedia may be frantic over natural market pullback (remember that when stocks go down, so do viewership ratings); but we nonetheless offer this ad nauseam reprise: ““You ain’t seen nothing yet…” ” –[BTO, ’74]).

Thus in seguing to that which very few are seeing, here is the Economic Barometer from one year ago-to-date along with the comparatively wee drop in the S&P.  But as to the Econ Baro, of last week’s 15 incoming metrics, 11 were worse period-over-period, notably in the Payrolls arena:

Given the recent months’ significant fallout in the Baro, we still remain somewhat flummoxed as to Gross Domestic Product (per the U.S. Bureau of Economic Analysis from the prior week) having advanced at an annualized +2.8% pace for Q2.

“But as you noted last time, it is an election year, eh mmb?“

So ’tis, Squire, but we’re really not supposed to go there, especially given the “Bureau” is purportedly politically-neutral.  Still, there are two pending revisions to the number (respectively due 29 August and  26 September).  But as we look into the current stance of Q3 — especially as the Baro leads — that next quarter’s GDP shall be interesting to see.

Meanwhile, let’s go ’round the horn for all eight BEGOS Markets across their last 21 trading days (one month) along with the “Baby Blues” which depict the consistency of the grey regression trendlines.  Notice the three positive trendlines are for the “safe haven” components of the Bond, Swiss Franc and Gold, whilst the balance of the bunch are negative … as (obviously) is the aforeshown Econ Baro.  And (hat-tip Dow Jones Newswires), a Federal Reserve yield-curve indicator suggests a 70% chance for economic recession.  (Did we mention the Econ Baro leads?  Why, indeed we did.)  Here are the markets and their respective recent trends:

Next let’s go to the precious metals’ 10-day Market Profiles, their more dominantly-traded prices as denoted for Gold (all December price-based) on the left and for Silver on the right.  In both cases there’s comprehensive trading congestion throughout the Profiles:

And of course as we glide into August, here is Gold’s structure by the “continuous contract” monthly bars for some 15 years.  Therein again (per our opening) we’ve acknowledged the “FATH”, but ’tis not really an issue given Gold’s expected monthly trading range is presently 139 points.  Thus the wee 15-point difference between the Faux All–Time High (2523) and true December All-Time High (2338) is immaterial.  Still, “more is better”:

To close, let’s briefly revisit the S&P 500.  Hysteria aside, the mighty Index (whilst fundamentally hyper-overvalued) is now seven consecutive trading days “textbook oversold”.  More importantly, should you make a brief trip to the MoneyFlow page, last week’s selling stint was actually not as negative by monetary outflow as was the change in the Index itself.  (We tend to notice little things like that, especially as they generally lead price).

That noted, keep thy eyes upon the precious metals:  for “FATH” or otherwise … (as crooned Alpheus back in ’07) … Keep the Gold Faith!

Cheers!

  …m…

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

The Gold Update: No. 767 – (27 July 2024) – “Gold Gets Gut-Punched … Again”

by

The Gold Update by Mark Mead Baillie — 767th Edition — Monte-Carlo — 27 July 2024 (published each Saturday) — www.deMeadville.com

“Gold Gets Gut-Punched … Again“

On the heels of last week’s piece “Another Gold Pop n’ Flop”, now we’ve “Gold Gets Gut-Punched … Again” But be thee not at ends, dear friends.  For as we’ll herein see, Gold’s weekly parabolic trend remains Long, which reinforces our “buy on the dip(s)” notion, albeit rewarding results may take quite some time, (i.e. weeks if not months).  Regardless, as Gold falters even though said trend is Long, one justifiably queries ““What’s going on…” ” –[Marvin Gaye, ’71]

Cue Q2 Gross Domestic Product:  the StateSide number as calculated by the Bureau of Economic Analysis came in at +2.8%.  That annualized pace equaled the average of the 12 prior quarters (from Q2 ’21 through Q1′ 24), and belies the now three-month boffing of the Economic Barometer, which we’ve documented as so severe that a negative GDP might actually appear.  But have no fear, as in this election year there’s no need to cry in one’s beer.

For from the “Credit Where Credit is Due Dept.” — stepping down as he is — U.S. President Joseph Robinette Biden, Jr. was described (with positive inference) this past week by Speaker Emerita Nancy Pelosi as “one of the most consequential Presidents in American history.”  And the (if believable) +2.8% GDP annualized growth rate to an extent proves her point.

Thus with the economy in satisfactory shape, the Federal Reserve can justifiably maintain The Bank’s 5.25%-5.50% FedFunds rate range come the Open Market Committee’s vote this next Wednesday (31 July).  So whereas Gold was seeking upside impetus from a downside rate, ‘twould now appear the yellow metal shall have to wait.

Admittedly with respect to the interest rate level of FedFunds, year-to-date we’ve been all over the place:

  • We began this year that — despite all the parroted bilge for multiple FedFunds rate cuts — inflation remaining well above target (+2%) was such that the Fed instead ought put the rate up;

  • But then the leading ramifications of the Econ Baro’s decline had become so extreme, we put forth that come 31 July, the FOMC would basically be “forced” to cut;

  • Yet now — given the Fed appears oblivious to the Econ Baro’s dropping like a stone — that “happy” +2.8% GDP pace gives the FOMC space to delay any cut toward assessing their next economic case (18 September), which is ‘natch what the FinMedia is mandating the Fed do in this race.

Moreover, let’s review inflation for June, our table updated as follows.  And as you regular readers know, those readings with red backgrounds are running above the Fed’s +2% target:

 

The alarming number therein is “PPI-Core” in the June Annualized column:  +4.8%.  As such wholesale inflation gets passed on to retail inflation, July’s “CPI-Core” may become more, (just in case ’tis at home you score).  And with respect to Gold, inflation lingering “above target” may restrain rate relief, thus keeping further material price rises in the yellow metal at bay … at least that’s what monetary theories say.

The bottom line is:  with GDP proceeding at an acceptable pace, the parroted assumption of no imminent rate relief, and inflation not (yet?) really ’round the Fed’s desired +2% target, Gold is taking a bit of a hit … plus not to overlook her, Silver took a helluva hit.  Since Gold’s 2488 All-Time High just this past 17 July, its price has fallen as much as -5.5% (to 2352) toward settling yesterday (Friday) at 2386.  But Silver across the same stint has dropped -13.0% (from 30.80 on 17 July to 27.56 this past Thursday).  

Encore:  “Poor ol’ Sister Silver!”  And as we turn to Gold’s weekly bars from a year ago-to-date, at the foot of the graphic is the Gold/Silver ratio now 85.0x, its highest reading since 03 May, (following which the white metal firmly rallied from the 26s up into the 32s:  do not forget the Silver!)

To be sure, Gold has recorded a second parabolic Long trend blue dot.  But:  price therein has dropped for both weeks.  And yes, that does hold some historical significance, (not that it must repeat).  Either way, century-to-date (which for you WestPalmBeachers commenced 01 January 2001), Gold has initiated 51 weekly parabolic Long trends:  but this is just the fourth one wherein at the start of the trend price has fallen for two successive weeks.  In the prior three cases, Gold did not fare well over the near-term.

‘Course this conflicts with that penned a week ago:  “…the fresh parabolic Long trend “ought” see yet another All-Time-High, shall we say, “sooner than later”.  Across the past ten Long stints, the “median maximum” price increase for Gold is +6.5%, which (in that vacuum) from here would bring 2559…”

“But, ‘It’s different this time’, right mmb?“

Squire, your duly appreciated optimism may well ring true.  And ’tis not just given geo-political issues from the U.S. right ’round the world having run amok, nor the non-existence of money to cover that which folks consider they’re worth, (i.e. “print print print” when it all goes wrong), but the most important fact that by Dollar debasement per our opening Scoreboard, Gold today at 2386 is priced -36% below its 3708 valuation.  “Got Gold?”

As to the aforementioned eroding Econ Baro,  here ’tis:

Such dichotomy to behold!  ‘Tis parroted here, there and everywhere that economically all is well, even to the extent of some +2.8% growth in GDP.  And yet to mathematically run the 50+ monthly incoming metrics which create the Baro, ’tis terrible!  Just his past week alone, slower than May were June’s readings for both New and Existing Home Sales, slower was growth in both Personal Income and Spending, and shrinking were Durable Orders.  Reprise:  “We’re going the wrong way!”  And whilst we’ve not uttered the “S” word in our most recent missives, given the aforeshown summary of inflation for June, dare we remind you of stagflation?

And what about the stock market?  Prior to Friday’s relief rally from a mildly “textbook oversold” S&P 500, the Associated Press referred to the intra-week selling as a “wipeout”.  Honestly folks, they (along with other elements of the FinMedia) don’t know what a “wipeout” is:  rather, this is mere noise.  Indeed last Wednesday, the S&P dropped -2.3%:  the first “circuit breaker” halt via the S&P Futures doesn’t even kick in until -7%.  Elaine Garzarelli’s induced “Black Monday” (19 October 1987) saw a single-day drop in the S&P of -21%.  Yet in today’s Investing Age of Stoopid, a -2.3% pullback is considered a “wipeout”?  Good grief.  Folks’ lack of market history, knowledge and valuation is stunning.

Just remember (yes, ad nauseum) when it comes to the stock market:

  • The “live” price/earnings ratio of the S&P 500 now stands at 39.7x, a ridiculously high level given ’twas just 25.4x at its inception 11 years ago, made all-the-more overwhelmingly risky today considering back then U.S. T-Bills essentially had zero yield whereas today they return 5%;

  • The market capitalization of the S&P 500 settled yesterday at $47.7T supported by a U.S. liquid money supply (“M2” basis) of just $21.0T.  Ask your investment banker if they’ve started printing their IOUs.  (They probably won’t get it).

Or as we on occasion quip:  “Marked-to-market, everyone’s a millionaire; marked-to-reality, nobody’s worth squat.”

Still always worth at least a peek is our two-panel graphic of Gold’s daily bars from three months ago-to-date on the left, and 10-day Market Profile on the right.  The baby blue dots of regression trend consistency clearly have turned tail:  upon their passing down through the 0% axis, such trend shall have rotated from positive to negative.  As far as trading support and resistance, we’ve the former notably at the Profile’s 2374 apex, whilst the latter’s levels are as labeled above current price:

Ever so similar is the like graphic for Silver, albeit her regression trend by the “Baby Blues” (at left) already has rotated to negative; meanwhile (at right) her Profile’s support/resistance trading volume apices are as cited.  And with earlier reference to the Gold/Silver ratio now at 85.0x, were the white metal priced today by that metric’s century-to-date average of 68.3x with the yellow metal now 2386, Sister Silver would instead be +24% higher at 34.92:  that price has not traded since 05 March 2012:

And so into Fed Week we go, replete with 15 more metrics for the Econ Baro including Payrolls data for July.  But don’t be shy.  True, Gold may be punched about a bit through these ensuing weeks.  However:  even as Gold hovers ’round our 2375 forecast high, hardly would we rule out price exceeding 2500 before this year is out.  So rather than pout, ensure you have Gold throughout!

Cheers!

  …m…

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

The Gold Update: No. 766 – (20 July 2024) – “Another Gold Pop n’ Flop”

by

The Gold Update by Mark Mead Baillie — 766th Edition — Monte-Carlo — 20 July 2024 (published each Saturday) — www.deMeadville.com

“Another Gold Pop n’ Flop“

Upon Gold’s record run this past Tuesday into Wednesday’s fresh All-Time High of 2488, we gave pensive consideration to entitling this week’s piece as “The Joy of Being Wrong”.  After all, given Gold’s recent weekly technicals having been imbued with a rather negative bent, we’ve been prudently wary of a run down to test our oft-mentioned 2247-2171 structural support zone.

Not to beat up on ourselves too much, for the prior two weekly missives have pointed to Gold’s positive fundamentals admirably gaining more sway than the negative technicals.  And we were instinctively joyous at the metal’s new high given the positives — at least for a moment — having won out over the negatives.  For come that new 2488 All-Time High, Gold had once again proved its pop … only to flop in the balance of the week, price settling yesterday (Friday) at 2403 for a net weekly loss (despite the new record high) of -13 points (-0.5%) … worse within which was a high (2488)-to-low (2396) drop of -92 points (-3.9%).

To wit, let’s straightaway start with our two-panel graphic of daily bars for the past three months-to-date for Gold on the left and for Silver on the right.  With both precious metals, the rightmost three bars show the story, Silver suffering the worse of the two by the Gold/Silver ratio rising back above 80x to now 81.7x:  poor ol’ Sister Silver!

 

As to Gold, call it a “bad news All-Time High” with which however comes a “good news parabolic flip to Long”.  The “bad news” is of course Gold yet again swiftly dropping following the new record high, similarly as we twice saw during last Spring’s “double top”.  Regardless, the “good news” per the encircled dot below in blue is the parabolic trend flipping to Long despite the down week, suggesting one can grab more Gold ’round here on the cheap should price “expectedly” zoom right back up again.  Therein note (and arguably prematurely) we’ve nixed the 2247-2171 structural support zone.  Indeed specific to Gold’s brand new parabolic Long trend, its “flip to Short” level beginning at 2305 is essentially at the base of price’s trading range across the past 15 weeks:

 

To be sure, all five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500) netted losses for the past week, (the latter deservedly so given its ongoing massive overvaluation sans earnings support; but Stoopid shan’t sell until far lower still).

Digression aside, what really pops out in the above graphic is Gold’s last three red-dotted parabolic Short trends all having respectively lasted just three weeks apiece.  That’s Gold Power!

Sufficiently intriguing is this notion such that we decided to pull together the following chart of “parabolic performance” by cumulative weekly duration for each of Gold’s last ten Long and Short trends.  And as stated:  when the blue line is rising, watch for Gold to be trending upward, else when the red line is rising, watch for Gold to be trending downward.  (Obviously for you WestPalmBeachers down there, when one line is rising, the other line stays flat).  This is why we emphasize the state of Gold’s weekly parabolic trend in every one of these missives.  For ’tis nice to “know” which way Gold is gonna go; (just don’t forget the cash management should the “know” turn out as “no”).  And therein you can see the recent dominance of the blue Long line breaking higher:

Therefore, despite Gold having taken a bit of a blow for the week, the fresh parabolic Long trend “ought” see yet another All-Time-High, shall we say, “sooner than later”.  Across the past ten Long stints, the “median maximum” price increase for Gold is +6.5%, which (in that vacuum) from here would bring 2559, a nice leap above the latest All-Time High of 2488, (just in case you’re scoring at home).

As to the StateSide Economic Barometer, ‘twas finally afforded at least some leap.  But for the week’s 14 reports issued, period-over-period, seven improved and seven were worse.  Still, the Baro did turn upward, which – because ‘tis an oscillator rather than a pure index – can occur as “things are getting worse more slowly” –[Paul “The Notorious” Krugman, 2001].

A distinct element therein was the Conference Board’s disclosure of so-called “Leading Indicators” for June, (to which you regular readers know we refer to as “lagging” given the Econ Baro is always well ahead of said stead).  And as anticipated given the Baro’s having been comprehensively boffed these recent months, such “Indicators” shrank at a -0.2% pace.  But that was an improvement over the May shrinkage of -0.4%.

“So things then are getting worse more slowly, eh mmb?“

Squire, not to throw the baby (or in this case the Baro) out with the bathwater, there were some positives, notably for June’s ex-auto Retail Sales, Housing Starts and Permits, Capacity Utilization, and July’s Philly Fed Index.  In fact, the latter (after being a lowly 1.3 in June) reached 13.9, its best level since that for April, and thus in turn, its second-best reading in the past 26 months.

But to the extent such Baro bounce continues, the new week’s set of 10 key incoming metrics includes the first peek at Q2 Gross Domestic Product:  might it actually be negative given the Baro’s broad-based break-down?  The consensus for +1.9% seems a bit optimistic.  Too, to round out June’s inflation data comes the “Fed-favoured” Core Personal Consumption Expenditures Price Index.  Does the Federal Reserve’s Open Market Committee vote on 31 July to reduce The Bank’s lending rate?  The on-balance plunging Baro suggests “yes”, but as we’ve quipped, we don’t think the behind-the-curve Fed actually sees it.  Yet, maybe the International Monetary Fund does, (hat-tip New York Times from last Tuesday):  “I.M.F. Sees Signs of Cooling in U.S. Economy“  At least one entity is paying attention.  En tous cas, on verra… (a little French lingo there).

As for the “deviation” comment in the graphic, will the Baro one day return to directionally leading the S&P 500 as it used to so do for some 22 years pre-COVID?  Here’s the year-over-year view:

 

Also note a wee bit of correction by the S&P 500 (the red line), the Index finally seeing some selling after having been “textbook overbought” for 28 consecutive trading days.  At present, the honestly-calculated “live” price/earnings ratio of the S&P is 41.2x:  that is a +62% increase from its inception in January 2013, meaning (obviously) hardly have earnings kept pace.  Indeed with Q2 Earnings Season underway, of the 52 S&P 500 constituents having thus far reported, just 65% have improved their year-over-year bottom lines; (but 88% have beaten the sneaky investment bankers’ magic trick known as “estimates”, so ’tis all good, right?).  Got Gold?

Here’s Gold (below left) by its 10-day Market Profile, along with that for Silver (below right).  We’ve mentioned of late the “conflict” between the yellow metal’s positive fundamentals and recent negative technicals, and ’tis exemplified in the Profile as no one trading area is overwhelming dominant.  And even as Gold’s weekly parabolic trend now is officially Long, the MACD (moving average convergence divergence) remains Short through a sixth consecutive week.  Whereas for Sister Silver, the white metal’s 31.20 level had well been her home over the past fortnight until this week’s late selling became her plight:

Now prior to our wrap ’round CRWD’s MSFT update trap, here next we’ve the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3715
Gold’s All-Time Intra-Day High:  2488 (17 July 2024)
2024’s High:  2488 (17 July 2024)
10-Session directional range:  up to 2488 (from 2357) = +131 points or +5.6%
Gold’s All-Time Closing High:  2474 (16 July 2024)
10-Session “volume-weighted” average price magnet:  2420
Trading Resistance:  notables per the Profile 2414 / 2420 / 2470  2341
Gold Currently:  2403, (expected daily trading range [“EDTR”]: 36 points)
Trading Support:  notables per the Profile 2401 / 2387 / 2367
The Weekly Parabolic Price to flip Short:  2305
The 300-Day Moving Average:  2090 and rising
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

Wrap warning:  do not read the following whilst drinking, lest — in a fit of laughter — the liquid spout from your nose.

“Everybody everywhere” is aware of yesterday’s CrowdStrike security update that rendered useless many a Microsoft (et alia) platform.  (Indeed we were directly affected, a trading algorithm firing off a S&P futures Short signal, but the code was unable to connect to the broker …  ““Mama said there’ll be days like this” ” –[The Shirelles, ’61]).

But to our point:  shares of CRWD took an -11% Friday tumble.  Yet when briefly visiting MSFT’s “Bing” search engine, it therein displayed for CRWD the following snippet, appropriately annotated with our red ink (put your glass down):

Honestly:  who on earth pays $797 for something that earns $1?  And yet ’tis a “Strong Buy”??  Is it any wonder we regularly refer to this as the Investing Age of Stoopid???

‘Tis immeasurably better to pay 2403 for something worth (by our opening Scoreboard) 3715:  GOLD!

Cheers!

  …m…

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

The Gold Update: No. 765 – (13 July 2024) – “Gold Fights the Negatives; Eyes Higher Determinatives”

by

The Gold Update by Mark Mead Baillie — 765th Edition — Monte-Carlo — 13 July 2024 (published each Saturday) — www.deMeadville.com

“Gold Fights the Negatives; Eyes Higher Determinatives“

Recall a week ago (per “Gold Gives Thanks as the Economy Tanks”) our having itemized an array of fundamental Gold positives, albeit there still continue technical Gold negatives, price thus having been somewhat conflicted.  However, as rightly therein written:  “… at the end of the day — regardless what technicals shout — ’tis by fundamentals Gold will out …”

And that recently appears to be the case.  True, by its weekly technical measures, Gold just concluded its third consecutive week of parabolic Short trend — and moreover — fifth consecutive week of negatively disposed MACD (moving average convergence divergence).  But in settling yesterday (Friday) at 2416, ’twas Gold’s highest weekly close since that ending 17 May — and further — its third straight weekly gain.

Also, of substantive import by trading range, Gold stands just -38 points below its All-Time Intraday High of 2454 (20 May) in the context that price’s expected weekly trading range is now 79 points.  In other words (for you WestPalmBeachers down there), Gold is well within range of recording a fresh All-Time High in the ensuing week.  Too, this past week’s contract volume was the most for an up week since than ending 19 April.  Here ’tis by the weekly candles year-to-date:

Indeed, one might take those other negative technicals and actually “dispose” of them.  For with inflation having been tamed (depending on one’s media source of choice) in June as ’twas in May, cue the Federal Reserve to merrily say “Olé!  Let’s cut rates today!”  Or at least come their Open Market Committee’s 31 July Policy Statement.

Thus Gold gets the bid as this past week it did, notably so on such cited supportive volume.  For Gold to truly get up and go, it requires that kind of improved participation (dare we use the “woke” word “awareness”).   And the more who are aware the StateSide economy (as we’ll see) is crumbling — plus Gold by the opening Scoreboard’s valuation of 3713 being presently priced at but 65% (2416) of that meaasure — the sooner Gold can materially “get off the schneid”.

Notwithstanding all this mirth, from the “Keeping Our Feet on the Ground Dept.” we’ve Gold’s weekly bars below from one year ago-to-date.  Therein we’re mindful of these three highlights:

  • Recall Gold’s “double-top” from this past April-May:  the two light blue markers need be eclipsed;

     

  • The red-dotted parabolic Short trend, now three weeks in duration, also need be eclipsed;

     

  • The 2247-2171 structural support remains a viable test at least until the next fresh All-Time High.

But on balance by this graphic, Gold looks poised to break out to the upside, certainly supported (understatement) by its aforementioned fundamental positives:

Now in concert with the FOMC almost certainly — indeed obligedly –voting to cut rates at its 30-31 July meeting, let’s next update the teased “crumbling” Economic Barometer.  Indeed in morphing from less hawkish to more dovish FedSpeak this past week — notably so from FedChair Powell at his Congressional Humphrey-Hawkins (no pun intended) testimony — we’re thinking that some of you valued readers actually did fax the prior missive’s Econ Baro to the Fed, for which you’ve done the monetary world a favour.  To wit in paraphrasing The Chair:  maintaining the current “high” level of Fed interest rates could adversely affect the economy.  (Really?)

To be sure, despite NBC’s Christopher Loffredo Hayes having just on Friday stated  “When you consider where we stood in 2020, Biden’s tenure has been the most successful macroeconomic stewardship of any president in my lifetime”, the math belies that:  the Baro’s 50-day trading plunge from 29 April through 11 July is its worst drop across any like period since ’twas created in 1998.  And as for Gross Domestic Product achieving an annualized 2% growth rate for Q2, we’ll believe it when we see it (on 25 July).  In the interim:  “Got Gold?”

Too, there’s the punch-drunk S&P 500, which this past week traded to a record-high 5656, the “live” price/earnings ratio settling Friday now 43.8x with a dividend yield of 1.311%; that for the U.S. Three-Month Treasury Bill is 5.198%.  ‘Course, when it all goes wrong, folks love to commiserate when crying in their beer.  To quote one Bopper Bip:  “Ya know, I was gonna sell at the high [yeah right], but then doubled way too soon on the dip…”  Breaking News:  A third 50% means-reversion “dip” in this still young century wouldn’t be an unlikely trip, (just in case you’re scoring at home, Mr. Bip).

“But there’s all that liquidity in the system so stocks can’t go down, mmb…“

Or is there really, Squire?  The S&P finished the week with a market-capitalization of $49.1T supported by a liquid U.S. money supply (M2 basis) of $20.1T.  That ostensibly means there’s 2.3x as much money invested in the S&P 500 than readily exists.  Hence our oft-quipped moniker for anticipating the “Look Ma!  No Money!” crash.  “Hey Mabel!  The broker says their IOU is still good for another 18 months as long as we commit to buy some GameFlop!”

Hardly looking to stayed paired with any negative technical flop are the precious metals.  Turning to our two-panel graphic of the daily bars across the past three months-to-date for Gold on the left and for Silver on the right, both metals’ tracks appear quite healthy since late June, their baby blue dots of regression trend consistency scampering along to the upside:

Too, we have the dual-panel display for Gold’s 10-day Market Profile (below left) and that for Silver (below right).  The yellow metal’s two nearby volume support prices are 2387 and 2367 as labeled, whilst for the white metal, although 29.65 would seem safe, getting back above 31.20 — her most commonly traded price of the past fortnight — would allow for more upside ““Room to Move” ” –[John Mayall, ’69]:

Now to wrap ahead of 14 incoming metrics due next week for the Econ Baro, we (being from a media family) are reminded that one’s choice of news source doesn’t necessarily convey truth.  Recall above we alluded to inflation as “having been tamed in June”.  Oh to be sure, at the retail level, June’s headline Consumer Price Index was a deflationary -0.1% pace, its first negative reading since that from the COVID Spring (double entendre) in 2020.  However:  ’twas a different story for wholesale inflation, the headline Producer Price Index rising from a pre-revised -0.2% pace in May to June’s +0.2%.  “Whoopsie…”  True, the PPI is more erratic than the CPI; but the former does have a leading tendency over the latter.  Anyhooo, to our media point with these two quotes:

  • Hat-tip Dow Jones Newswires:  “Wholesale prices tame in June, PPI finds, and also point to lower inflation”;

     

  • Hat-tip Breitbart Business Digest:  “Producer inflation surges much higher than expected; Core inflation hits worst level in a year”.

To the second quote, before you say “No way!”, let’s once again do the math:  the 12-month summation of Core PPI through June is at its highest level (+2.6%) in 14 months.

“Well that wasn’t on the TV, mmb…“

Squire, we wouldn’t know, having abandoned FinTV long ago.  Either way, let’s cue for our parroting FinMedia colleagues some wisdom from the eternally-iconic Charles M. Schultz:

Whilst at the end of the day the media’s life-blood is advertising revenue, when it comes to your wealth management:  do the math determinative and keep Gold in the affirmative!

  …m…

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

The Gold Update: No. 764 – (06 July 2024) – “Gold Gives Thanks as the Economy Tanks”

by

The Gold Update by Mark Mead Baillie — 764th Edition — Monte-Carlo — 06 July 2024 (published each Saturday) — www.deMeadville.com

“Gold Gives Thanks as the Economy Tanks“

Through recent missives we’ve been near-term negative on Gold, indeed looking for a move down to test the 2247-2171 structural support zone.  Such read remains in concert with price’s weekly MACD (moving average convergence divergence) still adversely positioned.

But gritty Gold refuses to fold, price settling yesterday (Friday) at 2400, all told!  And when the yellow metal trumps that which is technical, we’re reminded that Gold’s ultimate value is fundamental, that it “sees” what is about to economically unfold!  Thus a Federal Reserve rate cut to behold?  Or does the Fed not (yet) “see” the economy getting rolled?

In other words:  will the Fed be behind the descending curve as ’tis usually?  FedSpeak of late, whilst not necessarily hawkish, has been nonetheless cautious toward an otherwise imminent rate cut come the Open Market Committee’s Statement on 31 July.  And if previously you’ve therein read this phrase once, you’ve read it a bazillion times:  “…the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks…”

Well folks, with respect to Gold’s reality being fundamental, here as a heads-up to the not-ahead Fed is the incoming data, its evolving outlook, and hence a bleak balance of risks via the Economic Barometer.  And as you long-time readers know, the Baro is borne of some 50 incoming metrics per month across 26 years as a tried-and-true leading indicator, at which (‘twould so seem) the FedFolks don’t look.  But as we herein mused a week ago:  come 25 July, might the first read of Q2 annualized Gross Domestic Product actually be negative?  Cue Murray Head’s ballad from back in ’75     ““Say It Ain’t So, Joe” ” and have your own look:

 

‘Course when rates plop, Gold oft gets a pop.  Moreover, a bevy of Gold positives are coming to the fore.  However, first let’s update the stance of Gold’s weekly bars from a year ago-to-date, wherein we see a second week of parabolic Short trend now complete.  But as was the case with the prior two red-dotted Short trends, shall this one also be “short-lived”?  Either way — as has now been the case for some 13 weeks —  price basically is ebbing and flowing ’round our year’s forecast high of 2375:

True, we just mentioned there are Gold positives for “The Now”, inclusive of the opening Gold Scoreboard’s currency debasement valuation already up at 3712 (i.e. 55% higher than the present price of 2400).  Here are a few more immediate Gold positives upon which to chew:

  • Monetarily:  inflation “magically” vanished in May; ’tis over, and thus the Fed ought cut; Gold Positive;
  • Fundamentally:  the StateSide economy is tanking; ’tis sick and thus the Fed must cut; again, Gold Positive;

     

  • Globally:  U.S. Vice-President Kamala Devi Harris likely assumes the role of President between now and 20 January (regardless of her party’s nominee and ensuing election), thus becoming Commander-in-Chief of the armed forces at a time when global hotspots are ever so fragile and expanding; be that President perfectly capable or otherwise unproven, the world will become more nervous; clearly Gold Positive.
  • Technically:  despite the fresh weekly Gold parabolic Short stance and still-negative MACD, just yesterday came confirmation of the following Gold Positive:

If you follow the website’s analytics, the above graphic is updated daily on both the Gold and Market Values pages.  And the rule of thumb is:  when price breaks above its smooth valuation line, still higher price levels (by rule rather than exception) are to be expected.  Yet, within the context of proper cash management, we obviously now have conflicting signals.  But at the end of the day — regardless what technicals shout — ’tis by fundamentals Gold will out.  No, we shan’t now disregard a test of the oft-of-late mentioned 2247-2171 structural support zone; however should a new All-Time High instead be nigh in concert with the next weekly parabolic flip to Long, then ““I Want to Take You Higher” ”shall be Gold’s song –[Sly and the Family Stone, ’69]

Next we go to Gold’s two-panel display of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  The last two daily bars are sufficiently upside robust such that upon the baby blue dots of trend consistency crossing above the 0% axis, their foundational 21-day slope shall have rotated from negative to positive.  And in the Profile we’ve labeled those prices of notable volume-trading support:

Similar is Sister Silver’s drill.  Her “Baby Blues” (below left) are well in sync with those for Gold.  And her Profile (below right) shows a myriad of supports.  As noted early in the graphic for Gold’s Weekly Bars, the Gold/Silver ratio is now 76.1x versus 79.4x a week ago, indicative of Silver garnering interest as she remains exceedingly cheap vis-à-vis Gold, (the average century-to-date ratio being 63.3x).  Indeed whilst Gold today at 2400 is just -2.2% below its All-Time High (2454), Sister Silver now at 31.53 is -36.7% below her All-Time High (49.82).  So do not forget her:

In closing for this week, guess what commences on Monday?

“Q2 Earnings Season, mmb.“

Exactly right, Squire.  And surely you duly noted in the aforeshown Economic Barometer the “live” price/earnings ratio of the S&P 500 is an essentially valueless 43.5x.  Who owns the S&P 500 at such an historically extreme level?  Look again at the Econ Baro:  to bring the P/E in line with any measure of past P/E means, do we really expect bottom lines to have doubled in Q2?  Of course not!  And yet, the S&P 500 — void of supportive earnings and comparatively little yield (1.316%) — continues to set record highs, reaching on Friday up to 5570.

‘Course the last thing the Fed wants to see (beyond the demise of the Almighty Dollar, which is the Fed’s mandate to maintain in equilibrium) is the inevitable crash of the Great American Savings Account (aka “The Stock Market”).  But you S&P futures traders with long memories (and you know who you are out there) may recall from the “Conspiratorial Truth Dept.” the sole reason which keeps the market from crashing:  the Fed (so it used to be said) has a trading account on the futures floor:

“Dat’s right, you keep hittin’ dem offers dere, Jay baby!”

But can the Fed then print its way out of a margin call when it all goes wrong?  Folks:  you can ultimately crash and burn along with the rest in this Investing Age of Stoopid … or instead give thanks for Gold!

Cheers!

  …m…

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

The Gold Update: No. 763 – (29 June 2024) – “Gold Looks to Support as Our Key Trend Goes Short”

by

The Gold Update by Mark Mead Baillie — 763rd Edition — Monte-Carlo — 29 June 2024 (published each Saturday) — www.deMeadville.com

“Gold Looks to Support as Our Key Trend Goes Short“

“And so we are halfway.”   In this case ’tis not Fräulein Irma Bunt to James Bond (in the guise of Sir Hilary Bray) whilst walking upon the snowy flanks of Switzerland’s Schilthorn –[O.H.M.S.S, UA, ’69], but rather for our purposes the mid-point of 2024’s trading year.  (Yes, we are aware that the precise mid-point is not until this Tuesday’s settle when with 126 trading days in the books there’ll remain 126 in the balance).  Nonetheless, ’tis the end of June and thus time for our monthly view of it all.

And bang on time in stride with our negative near-term bent for Gold — whilst settling yesterday (Friday) at 2337 for a whopping weekly gain of +2 points — on Wednesday, Gold’s anticipated damage was done as price broke below 2320 such as to flip our key 16-week parabolic Long trend now to Short.  (Expected as ’twas, ’twasn’t a beautiful thAng, even as we then “X’d” [@deMeadvillePro] notice of said flip).  Regardless, as scored by Chicago back in ’69:  ““Where do we go from here?” ”

‘Course, you regular readers already know the answer to our musical query.  For waiting in the wings as herein depicted via recent missives is Gold’s 2247-2171 structural support zone.  Below ’tis with the weekly bars from a year ago-to-date.  And encircled therein is the rightmost red dot heralding the start of the new parabolic Short trend:

Still, as we oft and rightly quip, “Shorting Gold is a bad idea” given opening up-gaps et alia can cancel one’s trading account.  Moreover as our friend in the above graphic muses, the prior two parabolic Short trends have lasted but three weeks each.

Yet with a proper eye toward cash management, similar to Gold’s negative weekly MACD crossover as confirmed two weeks ago, in now reviewing the past dozen weekly parabolic Short trends (which date back to 04 March 2019), the average downside price adversity is -90 points (the median being -71 points).  So as was demonstrated for the current MACD case, an “in that average vacuum” move from here at 2337 similarly would place Gold smack on the upper boundary of the 2247-2171 zone.  No, you cannot make this stuff up.

“But mmb, with the economy tanking and inflation kinda gone, price should skyrocket, right?“

Which, Squire, presumes our recent notion that the Federal Reserve must cut rates commencing 30 July, (albeit SanFranFedPrez Mary “Don’t!” Daly inferred this past Monday that it may still be too soon to move).  But rate reductions do elicit more lending, the Fed-sourced proceeds of which resume debasement of the money supply, in turn adding to Gold’s valuation (presently by the opening Scoreboard’s 3711 vs. the current price of only 2337).  ‘Course until such rate cut actually happens, Gold’s negative technicals can well will out as typically they do (which is why we do the math toward reasonably guesstimating how low is low).  Still either way, as liquid markets go, nobody really knows.

However what we do know is that inflation has started to slow.  Having yesterday received the “Fed-favoured” Bureau of Economic Analysis’ Personal Consumption Expenditures Price Index for May, we can complete that month’s inflation table which also incorporates the Bureau of Labor Statistics’ reads for both its Consumer and Producer Price Indices.  And here’s what we see:

The right-hand column is key as ’tis the annualization of May’s inflation pace for all six measures.  In other words for you WestPalmBeachers down there, this is the “What’s happenin’ now” way of looking at it.  And the average rate of annualized inflation solely per May’s paces is only +0.2% as shown.  Yes, the left-hand column’s 12-month inflation summations are all above the Fed’s precious +2.0% target; but given the (arguably magical) disappearance of inflation in May, clearly the trend must be down, right?  (Please no email about “But mmb, we just went to the store and, and, and…”  Believe us, we truly understand).  We’re merely capsulizing that disseminated by the stated StateSide government bureaus.

Now in Squire’s having initially mentioned inflation, so too did his question include the “tanking” of the economy.  So severe has been the Economic Barometer’s plunge — notably through this year’s second quarter — ‘twould not surprise us one wit that come 25 July the first read of Q2 annualized Gross Domestic Product shall be negative.  Just a thought, but don’t forget ’twas barely positive for Q1 at +1.4%, the lowest GDP reading since climbing out of COVID during the Spring of 2022.  Here’s the year-over-year graphic, the so-to-speak “earningsless” S&P 500 well up in the sillysphere:

Specific to the Econ Baro, ’twasn’t all bleak last week.  The Chicago Purchasing Managers’ Index for June — whilst still in net contraction for 21 of the past 22 months — nonetheless improved to 47.4, its best reading since that for November of last year; (yet a reading below 50 still signifies manufacturing contraction).  Too, Personal Income for May increased +0.5%, tying it for the second-best increase across the past 12 months.  But is that inflationary, (nudge-nudge, hint-hint, wink-wink, elbow-elbow…)

Hardly inflationary has been Silver’s rise to the top of our BEGOS Market Standings year-to-date.  Best of the bunch as she is, Sister Silver remains cheap!  The Gold/Silver ratio is now 79.4x:  but the century-to-date average is 68.3x; were Silver thus priced by that yardstick today (just in case you’re scoring at home), rather than being now at 29.44, she’d be +16% higher at 34.22.

Then in second spot lies (appropriate verb there) the S&P 500, its being purely herd driven on Investing Age of Stoopid delusion.  Cue that recorded in 1929 by Memphis Minnie and Kansas Joe McCoy: ““When the Levee Breaks” ” Remember what also happened that year?  When the “Look Ma! No Money!” crash hits, ’twill be pure herd fear, whilst Silver and Gold are held dear:

Now it being month-end, let’s go ’round the horn for all eight BEGOS Markets by their bars across the past 21 trading days and “Baby Blues”, the dots that depict the day-to-day consistency of each component’s respective grey trendline.  If it all appears a fundamentally misvalued mess, you are correct.  But:  the markets [truly] are never wrong, (even as the S&P today trades at nearly double its earnings support and Gold at arguably half its currency debasement value).  Sleeping well, are you?  The S&P 500 market capitalization is now $47.7T buttressed by a liquid US money supply of only $21.0T.  (Did we mention the “Look Ma! No Money!” crash?)  Got Gold?

Similar to this time a week ago, we again find Gold on the left and Silver on the right both presently priced a bit below the mid-point of their 10-day Market Profiles.  For Gold, 2338 clearly is the near-term support/resistance price, whereas same for Silver is pretty much a hodge-podge of the 29s:

And with June now in the books, ’tis time to assess Gold’s year-over-year percentage growth relative to that of its equities brethren.  So from high-to-low we go with Pan American Silver (PAAS) +40%, Agnico Eagle Mines (AEM) +35%,  the Global X Silver Miners exchange-traded fund (SIL) +23%, Gold itself +22%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +16%, Newmont (NEM) +2%, but Franco-Nevada (FNV) -13%.  If you love rollercoasters, the metals’ equity leverage is for you!

Also as we tend to quip at month-end, ‘twouldn’t be so without Gold’s layered chart for the past 16 years by the monthly candles.  Whilst we hope we’re well wrong about this year’s forecast high (2375), so far ’tis relatively holding there in the sky:

Thus with half the year gone, in the proverbial nutshell:  Gold broadly looks great to go, but near-term technicals initially say no.  Either way, we’ll see what shows.  Indeed, how much Gold have you got stowed?

Cheers!

  …m…

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

The Gold Update: No. 762 – (22 June 2024) – “Gold Fundamentally Seeking Grip; Technically Still Facing Dip”

by

The Gold Update by Mark Mead Baillie — 762nd Edition — Monte-Carlo — 22 June 2024 (published each Saturday) — www.deMeadville.com

“Gold Fundamentally Seeking Grip; Technically Still Facing Dip“

To be sure, our recent missives have been near-term negative for Gold, at least technically so, an eye to the 2247-2171 zone apropos.  Still, as you know, Gold these past two weeks has been fundamentally grappling to gain grip, albeit settling this past week yesterday (Friday) down a dip at 2335.

First, the Bad News:  from the standpoint of Gold’s weekly “textbook” technicals (esoteric as they may be), the MACD (moving average convergence divergence) has furthered its negativity, and the Price Oscillator — whilst positive — is eroding, as too is the Moneyflow, its net inflow having completed a fifth consecutive week of weakening.  Also as we’ll later see, Gold’s 16-week parabolic Long trend is all but at its end.

Second, the Good News:  from the standpoint of Gold’s fundamentals — the most basic being currency debasement per the above Gold Scoreboard — we now sense the Federal Reserve is going to be forced to move with a rate cut per the Open Market Committee’s Policy Statement on 31 July.

Why?  Because as stagflationary as a rate cut shall be, the Economic Barometer already has fallen well into jeopardy.  Once both the Fed and FinMedia figure that out, “Cut!” shall be the clarion shout.

‘Course, we all know inflation didn’t just suddenly vanish in May, despite Labor’s sway.  The once mighty Barron’s rightly referred this past week to inflation as “sticky”, with Richmond FedPrez Thomas “Hearken!” Barkin inferring that ’tis still lingering.

But:  must the Fed now cut if only for optics to rescue the economy?  For as we “X’d” (@deMeadvillePro) this past Thursday, our Econ Baro is in comprehensive, abject plunge, even as this Investing Age of Stoopid rolls right along:

Yet how relieved we are that the S&P 500 (red line above) no longer is led by the Econ Baro!  Else stocks would have crashed months ago!  For as you veteran fans who’ve been with us since the 1990s know, throughout the Baro’s 26 years of existence, it provably had led the S&P 500 through the first 22 of those years, right up to COVID in 2020.  Then the Fed flooded the monetary system with $6.7T — an increase to the StateSide liquid “M2” money supply of +43.8% in just two years  — and as we’ve previously mathematically demonstrated, the market capitalization of the S&P increased by same:  which means (duly acknowledging the benefit of hindsight) that the Fed never really had to print anything!  And thus today with the system bloated in equities’ liquidity, the stock market is unable to crash.  Reprise:  “We’re in the money, we’re in the money…” –[Dance of the Dollars, Dubin/Warren, Gold Diggers of 1933, Warner Bros.]  Still graphically, the S&P seems a little bit stretched, what?  Hip-hip:

Still as regards the stagflating economy, as we herein penned a week ago:  “… ’twill be interesting to see just how negative for May the Conference Board’s Leading [i.e. “lagging”] Indicators shall be come next Friday…” followed by yesterday morning’s Prescient Commentary:  “The Econ Baro, which has taken a terrific hit this week (indeed across the past two months), looks to May’s … Leading (i.e. “lagging”) Indicators, … [as] potentially quite negative given the dive in the Baro itself.“  That is because throughout the Econ Baro’s history, it regularly leads by weeks the Conference Board’s (with all due respect) misnomered “Leading Indicators” report.  Worse, one wonders about the underlying consensii of economic “experts” properly doing their math:  when we saw their May expectation for -0.3%, we anticipated a far dire result given the plummeting Baro … and so such came to pass at -0.5%.

Thus cue Captain Obvious:  an economy in decline (understatement) upon comforted with a rate cut is a Gold Positive as it enhances the debasement of currency through the “creation of wealth” (i.e. loan-making).  So as technically sensitive as the yellow metal may now be, fundamentally we decree:  Buy Gold!

“But to buy ‘knowing’ — as you expect anyway — that the price may soon go lower, mmb?“

Squire, recall the late great Richard Russell:  “There’s never a bad time to buy Gold.”  ‘Tis the perfect place to put excess, unearmarked cash.  After all, the Internet’s main sewer line (aka “social media”) goes on ad nauseum about everybody being so rich.  Better still, timing the Gold market, (barring your being an in-and-out futures trader), is hardly a critical Gold-owning matter given that price (as historically eventuates) catches up to debasement value, again per the opening Gold Scoreboard.

Or to put it in easier perspective for you WestPalmBeachers down there, let’s quote Jack Lemmon in the role of Hogan from “Under the Yum Yum Tree” –[Columbia Pictures, ’63]:

“Well, it’s an economic necessity. The bank requested that I get rid of excess cash.  It’s cluttering up their vaults.”

Yo, you rock, Jack baby:  Go for the Gold!  (‘Course, ’twasn’t Gold which Jack sought; but we’ll leave that to your viewing curiosity).  The point is:  as it all goes wrong economically, ’tis good to have a little (or a lotta) Gold.

As to Gold’s “now”, we turn to the weekly bars from one year ago-to-date.  Note therein the three rightmost blue dots of the parabolic Long trend:  price thrice saved by the dots!  But now with just a wee 15 points separating price (2335) from its “flip-to-Short” level (2320), to maintain this uptrend that we love, Gold basically needs a straight-up week, else ’tis over.  For as sang Martha Davis with The Motels back in ’82: “Take the ‘L‘ out of ‘Lover’ and it’s ‘over’…” :

And for those of you scoring at home, 15 points of “wiggle room” is very little to keep Gold’s Long drive alive:  price’s expected weekly trading range is now a very volatile 83 points.  Thus ’tis quite viable Gold  soon visits the graphic’s outlined 2247-2171 structural support zone, should the parabolic (that 2320) this week break.

Now to our two-panel Gold display featuring on the left price’s daily bars from three months ago-to-date, the trend consistency therein denoted by the baby blue dots, and on the right the 10-day Market Profile of volume traded per price.  As the “Baby Blues” rise toward their 0% axis, the trend becomes less negative (rotating to positive upon crossing the axis).  However by the Profile, the 2030s appear as the last bastion of near-term support:

The like graphic for Silver is much the same, albeit at left the white metal’s “Baby Blues” were more beaten down than those of the yellow metal; and at right, Sister Silver’s Profile shows the mid-to-low 29s as her last support lines:

For the wrap, here is the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3690
Gold’s All-Time Intra-Day High:  2454 (20 May 2024)
2024’s High:  2454 (20 May 2024)
Gold’s All-Time Closing High:  2430 (20 May 2024)
Trading Resistance:  per the Profile 2344 / 2353 / 2375 / 2377
10-Session “volume-weighted” average price magnet:  2341:  2341
Gold Currently:  2335, (expected daily trading range [“EDTR”]: 37 points)
Trading Support:  per the Profile 2333 / 2330 / 2323 / 2313
The Weekly Parabolic Price to flip Short:  2320
10-Session directional range:  down to 2305 (from 2406) = -101 points or -4.2%
Structural Support:  2247-2171
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The 300-Day Moving Average:  2067 and rising
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

So as we glide into next week which culminates with the “Fed-favoured” Personal Consumption Expenditures Price Index, let’s give Jack the final word:

Cheers!

  …m…

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

The Gold Update: No. 761 – (15 June 2024) – “Gold Firms; Fed Squirms”

by

The Gold Update by Mark Mead Baillie — 761st Edition — Monte-Carlo — 15 June 2024 (published each Saturday) — www.deMeadville.com

“Gold Firms; Fed Squirms“

First to Gold, then the economic mold (its detritus, all told).

As herein anticipated a week ago:  Gold’s weekly MACD (moving average convergence divergence) has now confirmed crossing to negative, despite price’s +1.6% up week in settling yesterday (Friday) at 2348.  We shan’t rehash all the math behind like instances as detailed per the prior missive, other than to reiterate price probably produces a down run from ’round here toward the center of the 2247-2171 structural support zone as below shown, notably with no space left for another parabolic Long trend blue dot, (barring Gold leaping from this spot):

 

‘Course the above analysis is purely a nearer-term technical read which has historically led to lower price levels.  From a broader-term fundamental perspective –certainly so given inflation having just abruptly stopped — the Federal Reserve absolutely must cut its Funds Rate come 31 July, right?  A Gold positive, to be sure.  And in turn that puts to bed our year-to-date musings for a Fed hike, right?  “Curiouser and curiouser!” cried Alice.

Toward economic mold (including more on the sudden absence of inflation), initially we’ve these two sentences from The Federal Open Market Committee’s Policy Statement of 12 June 2024:

  • First paragraph, opening sentence –> “Recent indicators suggest that economic activity has continued to expand at a solid pace.

     

  • Second paragraph, closing sentence –> “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”

So is the Fed sensing an economic inflection point?

But wait, there’s more:  hat-tip Dow Jones Newswires from the ever-ebullient Ayahn Kose (who is the World Bank’s Deputy Chief Economist as everyone knows) came his 13 June prose –> “U.S. growth is exceptional”.

Your having thus absorbed all that parroted wisdom from on high, here’s the Economic Barometer, borne of the math beneath it all.  Indeed, “Go ask Alice…” –[Slick/Jefferson Airplane, ’67]:

 

And yes, also go ahead and quote one John Patrick McEnroe:  “You canNOT be SERious!!”  For 29 April-to-date is the worst plunge for such time frame in the Econ Baro’s 26-year history!

To see the Econ Baro so plunge, one ought think the Fed — as it did under Chairman Greenspan pre-“911” both on 03 January 2001 and 18 April 2001 — make an emergency rate cut straightaway.  For after all, along with this economic erosion, inflation within the one mere month of May just comprehensively went away!  “Don’t delay, cut today!”  Yet for some unforeseen reason, the Fed doesn’t see the Econ Baro; neither do CNBS, Bloomy nor Foxy.  But in staying the “no inflation” proclamation:

  • At the retail level, the Consumer Price Index showed no inflation (0.0%) for May, the 12-month CPI summation now +3.1% (and “core” +3.5%) … courtesy of The Bureau of Labor Statistics;

  • At the wholesale level, the Producer Price Index showed deflation (-0.2%) for May, the 12-month PPI summation now +1.9% (and “core” +1.8%) … courtesy of The Bureau of Labor Statistics.

However, recall a week ago also courtesy of The Bureau of Labor Statistics:  May’s unexpected upside explosion in Payrolls’ creation was accompanied by an inflationary doubling of the increased pace of Hourly earnings from +0.2% to +0.4%.  So fortunately, there’s no inflation, (let alone stagflation), right?

“Well, it is an election year, mmb, and this is the Labor Dept…“

Avoiding any book-cooking notions there, Squire, (this being a financial treatise rather than one political), you know and we know and everyone from Bangor, Maine to Honolulu and right ’round the world knows that hardly has inflation slowed:  “Been to the store lately?”  Moreover, were Gold to react to inflation having suddenly vanished, price would be rate-cut-influenced moon-bound rather than (at least technically) indicative of moving down.

To be sure, ’tis said the Fed is typically “behind the curve”, indeed today in a state of squirm.  For the Fed to opine (at best ‘twould seem) that “economic activity has continued to expand at a solid pace”, we’d say their analysis has (in Formula One lingo) “gone beyond the edge of adhesion and into the Armco!”

And as for the tumbling Econ Baro:  ’twill be interesting to see just how negative for May the Conference Board’s Leading [i.e. “lagging”] Indicators shall be come next Friday (21 June).  Economic mold, indeed.

Too, there’s earnings mold, our live price/earnings ratio for the S&P 500 settling the week at a historically unsupportable 41.4x.  But until real fear hits, everything’s great, right?  As is our wont to quip:  marked-to-market, everybody’s a millionaire; marked-to-reality, nobody’s worth squat.

From such mold, back to firm Gold.  Whilst price near-term may be a bit challenged, the broader picture remains most positive  — perhaps technically too positive — but fundamentally there’s so much currency debasement ground to gain, (our opening Scoreboard valuation of 3690 versus Gold currently just 2348).  

That noted, we go to Gold’s daily closes and 300-day moving average across the past 13 years, (the graphic still remindful of those tiresome 1200s-1400s during the prior decade).  Therein, our green-line forecast high for this year (2375) has thus far held reasonably well, notwithstanding the brief, recent spike to 2454.  And by this big picture, Gold’s sub-2000 days really do now appear permanently histoire, with an inevitable run to 3000+ in the balance “As time goes by…” –[Hupfeld ’31 … Wilson, Casablanca, ’42]:

Drilling down into the precious metals, here next we’ve their daily bars from three months ago-to-date with Gold on the left and Silver on the right.  Their respective baby blue dots of trend consistency trace nearly identical patterns, suggesting that Sister Silver is aligned with Gold, adorned in her precious metal pinstripes rather than her industrial metal jacket when aligned with Cousin Copper; however, should you peek at the website’s Copper and/or Market Trends pages, you’ll find the red metal’s “Baby Blues” are not that dissimilar from those of the white and yellow metals.  Thus for the Metals Triumvirate, all three are at present in linear regression downtrends, our precious two in this view:

As to the 10-day Market Profiles, both Gold (below left) and Silver (below right) have positioned themselves above last week’s lows … but given the near-term negative trends, we’ll simply have to see how it goes:

To close, yes the Econ Baro looks terrible, again in its worst plummeting streak we’ve ever recorded.  However, perhaps there’s happier news on the horizon:  of the 14 metrics scheduled to hit the Baro in the new week, 10 by consensus are expected to have improved period-over-period.  ‘Course, to be factored in as well shall be prior period revisions with which to weigh one’s decisions.

But when it comes to increasing one’s Gold buying program, as Bogey said, “Play it again, Sam!”

Cheers!

  …m…

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

The Gold Update: No. 760 – (08 June 2024) – “Inflation’s Strain Remains Gold’s Bane”

by

The Gold Update by Mark Mead Baillie — 760th Edition — Monte-Carlo — 08 June 2024 (published each Saturday) — www.deMeadville.com

“Inflation’s Strain Remains Gold’s Bane“

We start with inflation.  Year-to-date we’ve diligently documented that ’tis nowhere near the Federal Reserve’s sought 2% target.  And not that you need be reminded, but with May inflation readings commencing next week, let’s briefly reprise April’s inflation summary as herein presented a week ago.  The data speak for themselves:

Now a week hence, yesterday’s StateSide jobs report for May had “inflation” written all over it:  per the Bureau of Labor Statistics, the pace of Hourly Earnings doubled from +0.2% in April to +0.4%; the net increase in Non-Farm Payrolls was the largest year-to-date and incorporates those higher wages; and yet (wait for it…) the rate of Unemployment nonetheless ratcheted higher from 3.9% to 4.0%!  How does that happen?  Cue the late great Bullet Bill King:  “Holy Toledo!”

Query too, how does this happen?  On Thursday, the Governing Council of the European Central Bank cut 25 basis points on each of its Deposit Facility, Main Refinancing Operations, and Marginal Lending Facility rates … even as the leader of their pack Mme. Christine “Risky” Lagarde stated that “domestic inflation remains high” despite increased confidence for a “disinflationary rhythm”, (which she shan’t find on our Market Rhythms page, but we digress…)

Still, the annualized pace of inflation on this side of the Pond increased from +2.4% in April to +2.6% in May.  Regardless:  the ECB cut,  (following ten across-the-board rate hikes dating back to 27 July 2022).

The bottom line in our mind:  the optics are the ECB cut rates not because ’twas the right thing to do, but rather because they’re expected to so do.  Oooooh.  And will that come back to bruise?  Or shall the Fed dare follow suit?  We think not (yet), but stayed tuned…

Still being bruised as anticipated is Gold:  our near-term negative stance remains in force as it has been through the prior two missives.  Per this week’s title “Inflation’s Strain Remains Gold’s Bane”, hardly can the Fed this coming Wednesday (12 June) release the rate reins.  Moreover, that above table suggests — dare we say “obligatorily” — to tighten said reins.  But then again, the Economic Barometer is getting comprehensively skewered.  Near-term inflation may be restrictive for advancing Gold as it keeps any Fed rate cut on hold … but broader-term stagflation for Gold shall make its price bold!  Cue Old Yeller:  “Hey Jay?  We need another Dollar mold!”  To wit, the Econ Baro below:

For the week just past, the Econ Baro took in 15 metrics of which just five garnered period-over-period improvement.  Indeed measuring the Baro from its most recent peak ’round the S&P 5000 level, ’tis the worst 30-trading-day drop since that ending nearly 12 years ago on 05 July 2012, following which the FedFunds rate effectively remained at 0% for better than three additional years.  Does history repeat?  Inflation back then was continuously sub-2%.  Not now, given the current FedFunds target range of 5.25%-5.50%  So cut the rate and really stagflate, inflation further not to abate!  Got Gold?

Admittedly as noted, our Gold view near-term is negative:  fundamentally so with the Fed still on hold; technically so per our weekly chart below.  To be sure, the year-over-year dashed regression trendline remains positive.  But the rightmost blue parabolic Long dot shall pop given price’s plop.  Too, as a special addition to this week’s graphic, we’ve inserted Gold’s weekly MACD as it is now negatively crossing to the downside, price having settled Friday at 2311:

“And even if, like you say mmb, that ‘Shorting Gold is a bad idea’, these MACD signals usually work, right?“

Historically ’tis true Squire.  From April 2018 through today there have been for Gold 12 negative weekly MACD crossovers, the average downside follow-through being -93 points.  Strictly within that vacuum from here at 2311, that bodes for 2218 which is nearly the center of the depicted 2247-2171 structural support zone.  Upon the parabolic flipping from Long to Short, the average fall from there across the past five years is similarly -90 points.  No, we’d rather price not go there, but such lower excursions Gold on occasion does fare.

‘Course for the Gold bull, hope springs eternal; otherwise, hardly would we be penning these weekly pieces.  So fragile now is the state of the economy, the state of the stock market (“ridiculously overvalued” per a mainstream FinMedia piece a week or so ago), and the state of the world in many respects.  Therefore Gold is the place to be!  Indeed specific to stocks, here’s our honest “live” P/E calculation for the S&P 500 on the trailing twelve month basis; (for you WestPalmBeachers down there, “live” means right now):

Not surprisingly however, upon querying AI for same, it replied:  “The trailing twelve month Price-to-Earnings (P/E) ratio of the S&P 500 is currently 24.79.”  More on such “Assembled Inaccuracy” in our closing wrap.  Indeed contextually, the “live” P/E is now +58% higher that ’twas at its inception a dozen years ago.  And for those of you scoring at home, you know “means reversion” always occurs.  (Have a nice day).

Not having a nice day yesterday were Gold and Silver.  First to the yellow metal which traced the entirety of its two trading weeks in a single session on Friday.  High-to-low by both points (-103) and percentage (-4.3%), ’twas Gold’s worst trading day since last 04 December.  ‘Tis why in Gold’s 10-day Market Profile (below right) every price bar is highlighted in Gold as they all traded.  And with Gold’s “Baby Blues” of trend consistency now falling beneath their 0% axis (below left), this means the 21-day linear regression trend has confirmed rotating from positive to negative:

Second to the white metal, Sister Silver suffering Friday her worst high-to-low day (-2.45 points, -7.7%) since 02 February 2021.  Below on the left are Silver’s daily bars from three months ago-to-date:  her plunging “Baby Blues” (barring an unexpected upside Fed cut rocket shot) surely in the new week shall see her trend, like that already for Gold, also rotate from positive to negative.  And below on the right is her 10-day Market Profile, price itself at the very base of the stack:

With the Federal Open Market Committee’s Policy Statement and Powell Presser due Wednesday, we’ll wrap with this from the “Retraction/Correction/Blew It Dept.” given reference to the aforementioned brilliance of AI.

In last week’s missive we performed quite the song and dance over how $34T might be “visualized”.  And via proper math we concluded that $34T in One Dollar bills laid end-to-end essentially equated to 5.5x the distance from Earth to Neptune.  However, we fell afoul of the cardinal rule not to depend on stoopid source material.  Indeed, rather than scrounge round through a wallet-full of Euros in search of a stray One Dollar bill for our measuring tape, we instead queried:  “How many One Dollar Bills laid end-to-end make one mile?”  And now after further review following email spew, Assembled Inaccuracy didn’t have a correct clue.  (So what else is new…)

Start with the wrong number … End with the wrong number!  For the correct answer and proper use of brain function, we leave it to you StateSiders to get out a buck, your ruler, and do the math from there.  And you’ll still find the number unfathomably impossible.

‘Course, near-term negativity notwithstanding, the one number to grab is Gold! 

Cheers!

 
 …m…

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

The Gold Update: No. 759 – (01 June 2024) – “Gold’s Double-Top Primes Price Plop”

by

The Gold Update by Mark Mead Baillie — 759th Edition — Monte-Carlo — 01 June 2024 (published each Saturday) — www.deMeadville.com

“Gold’s Double-Top Primes Price Plop“

Notwithstanding +23 points of fresh premium as COMEX Gold rolls from the June contract into that for August, there’s no mistaking price having formed a classic near-term double-top.  Here ’tis:

The above chart tracks Gold by its 12-hour bars from nearly the beginning of this year-to-date.  (The inset at lower right is by Gold’s daily candles specific to the August contract for the past two months).  And stark thereon is the double-top (both being chronological All-Time Highs) achieved at 2449 on 12 April and again at 2454 on 20 May.  The rationale for displaying the double-top per 12-hour bars is — that by price’s 12-hour MACD (moving average convergence divergence) — such study presently ranks as Gold’s best Market Rhythm for taking signals followed by profit.  Green bars indicate price when the MACD is Long and red bars when Short, the latter as you know being a bad idea; (profitability results of this study are included on the website’s current Market Rhythms list).

The key point of course is that double-tops in major markets are prime for selling (be it by humans or algorithms), which — in spite of our being broad-based bullish on Gold — has been our near-term bearish analytical slant given the abrupt downtrend from that 20 May All-Time High at 2454.  Indeed since then, Gold has dropped (basis the June contract) from 2454 to as low as 2321 (-133 points or -5.4% in just eight trading days).  Now by the August contract having settled yesterday (Friday) at 2348, should 2309 go, the 21 March high of 2263 ought come into play … just in case you’re scoring at home.

More importantly, what’s coming into play in the words of Bloomy last Wednesday is “Revived Hike Chatter”.  For some irrational reason, the FinWorld just seems to be figuring that out now.  However, we’ve regularly herein been musing since the start of this year about the Federal Reserve ~~perhaps~~ having to raise rather than cut interest rates.  The difference between “Us and Them” –[Pink Floyd, ’73] is simple:  we do the math; the FinWorld parrot one another.  And by the math, inflation remains on the move as below summarized in our April table:

Therein are the three major measures of StateSide inflation:  the Consumer Price Index (CPI), Producer Price Index (PPI) and “Fed-favoured” Personal Consumption Expenditures Price Index (PCE), all listed with both their headline and attendant core readings.  The left column is each category’s 12-month summation and the right column is April’s data annualized.  Now look at the two averages, bearing in mind the Fed’s inflation target is 2%:  for the 12-month summation ’tis 3.5%; but for April’s annualized paces  ’tis 4.2%.  Which for you WestPalmBeachers down there means:  “We’re going the wrong way…”

So is the StateSide economy.  Recall our penning a week ago:  “…the Baro looks to be lower still in a week’s time as stagflation creeps ‘cross the nation…”  Cue Tag Team from back in ’93: “Whoomp! (There It Is)””

‘Course, the FinMedia are all excited — assuming you neither eat nor drive — that the Fed-fawned-over Core PCE for April was only 0.2%, (i.e. the annualized 2.4% in the aforeshown inflation table).  Nevertheless:  the economy by the Econ Baro is fading, whilst living costs are rising.  Stagflation.  To be sure:  “revived hike chatter” may lend to near-term Gold negativity on the notion the Fed could actually raise rates; but the emboldened “S“-word firmly lends to broad-based Gold positivity given the need to print dough to keep everyone whole … especially should U.S. Secretary of the Treasury Janet “Old Yeller” Yellen yet again be yelling she’s short of funds to pay interest on the nation’s $34T in outstanding securities, (riskless though they are, right?).

“So mmb, how can we visualize $34T?“

Simply by math, Squire.  One Dollar bills lined up end-to-end take $2,276 to cover one mile.  So, to line up $34T would cover 14,938,488,576 miles.  The annual average distance from Earth to Neptune is 2,703,959,960 miles.  Thus the “dollar distance” of $34T is 5.5x that distance to “Big Blue”; ’tis a lot of dollars.

Now it being month-end, we’ve still more graphic richness to present.  And if memory serves, never have we seen the BEGOS Markets’ Metals Triumvirate dominate the Standings year-to-date:  atop the framed podium — and ever-deservingly so — is Sister Silver, followed by Copper and then Gold.  ‘Tis such a beautiful thing that we’re actually tearing up a bit:

Whilst in vein (but never in vain) with our BEGOS Markets, drilling down into the past trading month (21 days) here are their bars with the ever popular “Baby Blues” that depict the day-to-day consistency of the grey trendlines.  To wit, save (barely) for Oil, the Blues ’round the horn are in descent.  And “when money is coming out of everything”, ’tis anticipative of the oxymoron “Dollar Strength”.  That in turn hints at higher interest rates, albeit upon the Federal Open Market Committee’s Policy Statement a week Wednesday (12 June), their sitting-on-hands likely continues.  Regardless, here’s the “What’s happenin’ now”:

Specific next to Gold’s weekly bars, the rightmost one benefits from the aforementioned +23 points of August contract premium, (which over these next two months shall whittle away at a rate of about -0.5 points per trading day).  Either way, this year ago-to-date “continuous contract” graphic is indicative of Gold having had a modest up week (+13 points) when in fact it had a modest down week (-10 points).  But at the end of the day, given Gold’s EDTR (expected daily trading range) is now 36 points, that difference at best is noise.  Note therein the blue-dotted parabolic Long trend (now 13 weeks in duration) shall flip to Short above the remindful 2247-2171 structural support zone:

 

Staying with the year ago-to-date theme, our pro-metals’ equities readers are finally getting some desired vindication.  In recent month-end missives wherein this like graphic appears, Gold oft has been ahead of its equites brethren.  Yet now, ’tis getting out-performed by a few of the crew.  From least-to-best by their percentage tracks we’ve:  Franco-Nevada (FNV) -15% (but in a recent uptrend), Newmont (NEM) +3%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +14%, Gold itself +19%, the Global X Silver Miners exchange-traded fund (SIL) +29%, Agnico Eagle Mines (AEM) +34%, and Pan American Silver (PAAS) +44%.  Suffer by leverage, but live well by same:

Meanwhile, similar to what we saw a week ago, by their respective 10-day Market Profiles price remains low in the stack for Gold (calibrated to the August contract) on the left and for Silver on the right:

And as ’tis our wont to say, ‘twouldn’t be month-end without our big picture view of Gold’s stratified structure by the month across these past 16 calendar years:

To wrap:  with each passing week, more and more internet information (or “bilge” if you will) builds toward financial end-times, part and parcel of which would include our “Look Ma, no money!” S&P crash.  ‘Course this being big election years coinciding both on this side of the Pond (five-year Parliamentary) and StateSide (four-year Presidential), the hype of “Well, it’s the election, you know…” already is quite rife.  But even were it not, the following macro-prudential fact remains:  the S&P 500 is priced at nearly double its earnings support, whilst Gold is priced at nearly half its Dollar debasement valuation.  And as we’ve demonstrated ad nauseum throughout 16 years of these weekly missives, price inevitably reverts to valuation.  Therefore, near-term price plop or not:  hopefully your Gold is well-guarded when sought!

  
 
Cheers!
 
 …m…

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

The Gold Update: No. 758 – (25 May 2024) – “Gold’s Marginal High and Habitual Cry”

by

The Gold Update by Mark Mead Baillie — 758th Edition — Monte-Carlo — 25 May 2024 (published each Saturday) — www.deMeadville.com

“Gold’s Marginal High and Habitual Cry“

We start with this from the “Pat on the Back Dept.”  Per the prior missive penned a week ago (“Another Gold All-Time High is Nigh”), ’twas therein stated that Gold (then 2420) was exhibiting sufficiently daily trading range such that one could reasonably expect a fresh All-Time High (above 2449) to occur as soon as last Monday … which is precisely what happened, the yellow metal trading up to 2454 … but that was it.

So let’s thus transit from that department to the “Pass the Hankie Dept.” as Gold’s new All-Time High was at best “marginal”.  And All-Time Highs recorded by Gold since at least the COVID years-to-date have then — oft with promptness — seen price go through “habitual” selling.  To wit:  following Monday’s 2454 high, the yellow metal this past week hastily traded down -128 points to as low as 2326 before settling yesterday (Friday) at 2335.  So yes, you may cry.

Yet we offer this broader-based solace.  Century-to-date, Gold has amassed 5,887 trading days, of which All-Time Highs have been registered on 268 occasions.  For those of you scoring at home, that means across these past 24 calendar years, Gold averages a fresh All-Time High every 22 trading days, which essentially is once per month, albeit that is far from linear:  for the nearly nine-year stint from 07 September 2011 to 27 July 2020, nary an All-Time High was notched, price in that duration dropping as much as -46% down to 1045 on 03 December 2015.

‘Course more recently, not every incremental All-Time Gold High since the COVID outbreak in 2020 has then been swiftly sold off.  And yet, an inevitably habitual pattern of selling certainly is made manifest by the following chronological table of just how far Gold — following a run of All-Time Highs — has then declined within one month:

 

And the low row in the above table reflects last Monday’s All-Time High at 2454.  Note therein the decline with only four trading days having since passed, price already having come off by as much as -5.2%.

Now hardly are we bearish on Gold:  but ‘twould not be untoward to see price glide lower still given Gold having just crossed below our Market Values “smooth valuation line” for the first time since 28 February.  As you seasoned website followers know, eclipsing that line to the downside (be it for any of the five primary markets which comprise BEGOS, i.e. the Bond / Euro / Gold / Oil / S&P) regularly leads to further selling as we below show.  Note this latest negative price crossover as encircled in red, (the lower panel oscillator being price less valuation):

Specific to the current crossover, ’twas confirmed as of Thursday’s close at 2331.  Year-over-year, ’tis the ninth such downside crossover.  For the prior eight, the average negative penetration within one month is -65 points, (the median being -56 points).  Thus in that vacuum alone, we’d see Gold 2275-2266 over the near term.  ‘Course, rarely is “average” reality:  there is pricing congestion for Gold from 2364-2285 to at least initially limit any truly material downside from here (2335).  Still, we’re again placing for perspective purposes the underlying structural support zone of 2247-2171 on Gold’s weekly bars graphic — the crybabies notwithstanding — from one year ago-to-date.  (Note at lower-right an Investing Age of Stoopid intruder…):

“Yeah, it snuck right past me, mmb“

Well, Squire, they’ll do anything and everything to convince you to dump Gold for “GameFlop” (GME, p/e 950x).  But true to ongoing form, such Investing Age of Stoopid continues to run its inevitably-ending course, the “live” price/earnings ratio of the S&P 500 (aka “Casino 500”) now 39.4x and yield 1.380% versus the U.S. annualized three-month rate of 5.245%.  The S&P’s market-capitalization is now $46.3T supported by a liquid U.S. Money Supply (M2) of only $21.3T.  ‘Course when you WestPalmBeachers are sufficiently shaken to sell along with the rest of the herd, your brokers shall all be good for the money, right?  (Recall, too, the ten stock market crash catalysts itemized in Gold Update no. 712 from last 08 July:  today, all ten remain firmly bona fide).

Speaking of crash catalysts, we’ve some good news as regards the StateSide economy.  Incoming metrics this past week for the Economic Barometer were so sparse (just five inputs), that it suffered limited additional damage.  Next week is again rather light as well with just nine metrics due, notably including the Fed-favoured inflation gauge of Personal Consumption Expenditures for April which is not expected to have slowed from March’s annualized pace of +3.6%.  But net-net by consensus, the Baro looks to be lower still in a week’s time as stagflation creeps ‘cross the nation:

Hardly was Gold’s decline this past week at a crawl.  The yellow metal’s net two-day drop (from Tuesday’s settle at 2425 to that for Thursday at 2331) was -94 points:  that ranks ninth-worst by points for any two-day span century-to date; (the like -3.9% drop has been worse on many two-day occasions, the most extreme being -13.3% in mid-April 2013).  Still, the week’s fallout was enough to drive price from nearly the top of its 10-day Market Profile toward the bottom per the below right hand panel.  The left-hand panel of Gold’s daily bars from three months ago-to-date depicts the baby blue dots of trend consistency having just turned lower.  Again as aforementioned, the 2364-2285 area is price-congestive, and thus for now, supportive:

As for Silver, her two-day (Tue-Thu) drop was -5.8%.  But unlike Gold, hardly did she hoover her whole Market Profile, basically finishing in the center of that two-week stack (below right).  Too, her “Baby Blues” have (yet) to lurch lower per the three-month stint (below left).  Indeed ’tis heartening to see Silver Silver getting some degree of respect lately.  Further, she remains quite cheap relative to Gold, even as the Gold/Silver ratio (as noted a week ago) has moved sub-80x.  Today ’tis 76.5x … however the century-to-date average is 68.3x.  So priced at that average with Gold at 2335 today, Silver would be +12% higher than her current 30.54 level at 34.21:

Our takeaway is:  ‘twould be folly not to anticipate lower Gold prices near-term.  In addition to price having just crossed beneath the aforeshown smooth valuation line, we’ve the following technical negatives:  Gold’s daily Parabolics flipped from Long to Short effective yesterday’s open as did the MACD (moving average convergence divergence); the daily Price Oscillator is dwindling and the Moneyflow is nearing a cross from inflow to outflow.

Still, with prudent cash management always paramount — and acknowledging that “shorting Gold is a bad idea” — let’s wrap with the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3769
Gold’s All-Time Intra-Day High:  2454 (20 May 2024)
2024’s High:  2454 (20 May 2024)
Gold’s All-Time Closing High:  2430 (20 May 2024)
10-Session “volume-weighted” average price magnet:  2385
Trading Resistance:  various per the Profile from here at 2335 up to 2440
Gold Currently:  2335, (expected daily trading range [“EDTR”]: 38 points)
10-Session directional range:  down to 2326 (from 2454) = -128 points or -5.2%
Trading Support:  none per the Profile
The Weekly Parabolic Price to flip Short:  2263
Structural Support:  2247-2171
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The 300-Day Moving Average:  2046 and rising
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

‘Course the bottom line is, regardless of its marginal high but then habitual cry, don’t miss out when Gold goes to the sky!

  
 
Cheers!
 
 …m…

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

The Gold Update: No. 757 – (18 May 2024) – “Another Gold All-Time High is Nigh”

by

The Gold Update by Mark Mead Baillie — 757th Edition — Monte-Carlo — 18 May 2024 (published each Saturday) — www.deMeadville.com

“Another Gold All-Time High is Nigh“

One week ago we herein opened with this query:  “Is Gold’s near-term correction completed?”  Given the yellow metal’s upside price action since then, we can now answer in the affirmative, (which for you WestPalmBeachers down there means “Yes”).

As for employing the word “Another” in this week’s title, ’twasn’t that long ago in milestone missive No. 700 (15 April 2023 with Gold then 2018) we wrote “Gold:  The Next All-Time High is Nigh“, which of course obviously came to pass, indeed on 16 daily occasions since then.  Now Gold is merely on go to do it again.

Our Mighty Metal settled at an All-Time Weekly Closing High yesterday (Friday) at 2420, just -29 points shy of the most recent All-Time Intra-Day High of 2449 this past 12 April.  Further, given Gold’s “expected daily trading range” (per the website’s Market Ranges page) is 36 points, price is within such range of reasonably reaching above 2449 as soon as Monday, (just in case you’re scoring at home).

True, a week ago — at least technically — we were reserved about Gold’s then imminent direction, price having completed a perfect Golden Ratio retracement, from which at 2386 it swiftly sank in the new week to 2338.  To wit as we penned in Wednesday’s Prescient Commentary:  “…until the former clears … the Golden Ratio retracement … the recent near-term correction would technically remain in place…”  But having then since risen higher still, there’s really not that much pricing congestion now between here (2420) and there (2449).

“And so the question becomes ‘How high is high?’, right mmb?“

That is a critical knowledge point there, Squire.  To be sure, Gold has already surpassed our forecast high for this year upon achieving 2375 this past 09 April; (recall such prognosis having been made last 30 December in “Gold – We Conservatively Forecast 2375 for 2024’s High”).

Yet to Squire’s query as to “How high is high?” — at least fundamentally — we can see per the opening Gold Scoreboard that by Dollar debasement (even accounting for the annual increase in the supply of Gold itself), we’ve the yellow metal’s value at 3767, or +56% above today’s “lowly” price at 2420.

But given this ceaseless Investing Age of Stoopid wherein — save for central/sovereign banks — Gold is considered “passé”, determining the inevitable “when” for 3767 (and beyond) is subjective.  The art of designing Fibonacci retracements per our prior missive may be one thing:  but, the art of future Fibonacci extensions we leave to you “seers” out there.

Either way, ’tis a pleasant gaze at the past via this view of Gold’s weekly bars from one year ago-to-date, again the rightmost nub being an All-Time Weekly Closing High.  Indeed through these first 20 trading weeks of 2024, this past one ranks fifth-best by both points (+53) and percentage (+2.2%) gains.  As for the more skeptical amongst you — and price is arguably “too high” above the rising dashed regression trendline —  we’ve again depicted the green-bounded 2247-2171 structural support zone, within which is the current “flip to Short” price of 2236.  (But let’s not go there…)

And no, that Gold/Silver ratio at the foot of the above graphic is not a typo:  76.2x champions Silver’s stellar week wherein price rose +3.27 points (+11.5%), the white metal’s best weekly gain by both measures since that ending 07 August 2020.  ‘Tis why we oft quip:  “Don’t forget Sister Silver!”

Whilst speaking of metals, surely you saw Copper having reached its own All-Time High at $5.128/pound this past Wednesday, which may give further boost toward Gold’s next All-Time High.  For be it lore, or substantively more, ’tis said the red metal leads the yellow metal.  Here are their respective daily percentage tracks decade-to-date:  just one of those things that makes you go “Hmmmm…”

But next we go to something guaranteed to make you go “Ugghh…”:  the stagflating StateSide Economic Barometer.  Its outright dump just in this past week is the worst for such stint since April a year ago.  Moreover:  for the nearly 26 calendar years that we’ve maintained the Econ Baro, such five-day fall ranks in the 99th percentile of worst plunges.  Here’s the year-over year view:

‘Course, this can make Gold quite happy, for now the Federal Reserve must be forced to cut its Bank’s Funds rate … except that April’s just-reported inflation numbers belie that notion.  First at the wholesale level (Producer Price Index) the 12-month summation is spot-on the Fed’s +2.0% target … except that April’s pace annualized was +6.0%.  Second at the retail level (Consumer Price Index), it slowed by one percentage pip … except that the 12-month summation is well above target at +3.2% (and +3.7% core), with April alone annualized at +3.6%.  And by now you well know the formula:

  • Inflation + Shrinkage = Stagflation

“But mmb, is it really fair to say the economy is actually shrinking?“

As opposed to its growth merely slowing, Squire?  We shan’t see the Bureau of Economic Analysis’ first read of Q2 Gross Domestic Product until late July.  And already per their initial Q1 read, the annualized pace fell from +3.4% to just +1.6%.  As well, the Conference Board’s “U.S. Leading Economic Index” (which we regularly quip is in fact “lagging” given the Econ Baro is always well ahead of it) has reported only one month of growth (for February of this year) since March of 2022(!)  Is it any wonder the broad tilt of the above Baro is negative?  No, ’tisn’t.

However, we sense what “is” is a fresh Gold high soon nigh.  Let’s go to the two-panel graphic of Gold’s daily bars from three months ago-to-date on the left and same for Silver on the right.  Therein per the baby blue dots of trend consistency, our thought is that present upside price momentum can pull the “Baby Blues” for both precious metals up above their respective +80% axes.  Again, “Follow the Blues…”:

 

Also we’ve the two-panel graphic of the 10-day Market Profiles for Gold (below left) and Silver (below right).  Whether marching or looking up toward higher highs, ’tis what our analysis implies:

Let’s wrap with our assessment of Q1 Earnings Season.  As just ended “by the calendar”, for the S&P 500 — which also set a record high on Thursday at 5325 — we count 439 constituents having reported.  Of those, 64% improved their bottom lines over Q1 of a year ago, (meaning that 36% did not so do).  Excluding the four COVID quarters of 2020, the average year-over-year improvement runs ’round 69%:  thus this past Earnings Season might be couched as rather sub-par.  Yet upon its start back on 08 April, the S&P was 5204 and its “live” price/earnings ratio 46.1x.  Today they are respectively 5303 and 39.9x:  so some relative progress was made there in getting the p/e down a bit.  Yet by any historical yardstick — especially in this positive interest rate environment — the p/e of 39.9x remains treacherously (understatement) high.

‘Course, ’tis made all the more complicated by this, (hat-tip Hedgeye’s hilarious Bob Rich):

 

So goodness gracious, with a new high nigh, stay gripped to Gold … and Silver bold!

Cheers!
 
 …m…

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

The Gold Update: No. 756 – (11 May 2024) – “Gold Garners a Groovy Golden Ratio Retracement”

by

The Gold Update by Mark Mead Baillie — 756th Edition — Monte-Carlo — 11 May 2024 (published each Saturday) — www.deMeadville.com

“Gold Garners a Groovy Golden Ratio Retracement“

Is Gold’s near-term correction completed?  If so, it lasted 16 trading days spanning from the recent All-Time High of 2449 (12 April) down to 2285 (04 May), a loss of -164 points or -6.7%.

Moreover, renewed buying interest in Gold did not even let price reach down to test the 2247-2171 structural support zone, (which of course remains a viable consideration).  But Gold buyers clearly came to the fore these past few days as COMEX contract volume recorded its fifth-most substantive week in well over a year, (indeed going back to that ending 20 March ’23).

So after two consecutive losing weeks, Gold scored a winner in settling yesterday (Friday) at 2367, its highest weekly close since that ending 19 April (then 2414), where upon we straightaway penned “Gold Fit to Pull Back a Bit” which it so did lickety-split.  (That courtesy of the “We Hate It When We’re Right Dept.”)

As for the entitled “…Groovy Golden Ratio Retracement”, ’twas quintessentially Fibonacci perfection for Gold on Friday.  Now as you long-time advocates of The Gold Update know, hardly do we ever dwell upon nature’s pristine paragon of numerical sequencing as uncovered by Leonardo Bigollo “Fibonacci” Pisano away back into the turn of the 13th Century.  Yet on occasion, that infamous 61.8% Golden Ratio as determined by The Fibster can elicit astonishing precision for markets’ price reversals.

Simple stated for those of you scoring at home, as noted, Gold’s All-Time High is 2449 and the low since then 2285.  The 61.8% Golden Ratio retracement from that low back up toward the high is 2386:  ’twas the precise high Gold reached on Friday before settling at the classic 50% retracement price of 2367.  Perfection personified.  To wit, look at the rightmost candle per this view of Gold’s daily bars from March-to-date, yesterday’s high at the 0.618 label and the close at the 0.500 label.  A worthy tool to keep under your cash management hat:

‘Course, the question then remains:  has the near-term downside Gold correction run its course?  Or is the perfect Fibonacci Golden Ratio retracement and subsequent same-day pullback signaling the resumption of such downside?  To be sure, Gold’s daily “textbook technicals” (MACD, Price Oscillator, Moneyflow) — which a week ago were leaning lower — are just now bending up a bit.  And yet per both the website’s Market Values and Gold pages, price is still +69 points above its smooth valuation line, (it has not been below same since 28 February).  Also fundamentally, in a week almost completely bereft of incoming metrics for the Economic Barometer, save for some arguably “hawkish” FedSpeak to end said week, there’s really not that much upon which to critique.  Yet as we all know, “the trend is your friend”, and as we next go to Gold’s weekly bars from a year ago-to-date, both the rising dashed linear regression trendline and blue-dotted parabolic Long trend look great.  Warily however, prior to Gold next scoring a fresh All-Time High at 2450+, it may be a bit premature to start dancing to The Chipmunks “Funky Monkey“:

Speaking of the Econ Baro, here ’tis by the day from one year ago-to-date along with the obscenely overvalued “Casino 500” (red line), the honestly-calculated “live” price/earnings ratio for which is now 39.1x and the yield 1.404% versus the U.S. Three-Month T-Bill’s annualized yield of 5.243%.  But since fee-churning is everything to your investment banker, “Stocks are where it’s at, baby!”  (Friendly reminder:  lock-limit down for the S&P 500 futures is -7%, the last three such occurrences coming astride COVID back in March 2020):

Oooh, and guess to what word the financial community is finally awakening?  “Stagflation”. Thus far in 2024, we first mentioned it ten missives ago on 02 March with “Gold Grabs Center-Stage as Stagflation Starts to Rage”.  But in this age where no one does the math to be properly informed, it takes awhile for “stagflation” to get parroted up to the higher echelons of the FinMedia.  To wit yesterday, (hat-tip Bloomy):  “S&P 500 Runs Out of Steam Amid Stagflation Chatter.”

As for running out of steam (really?), the S&P has gained better than +4% in just the past seven trading sessions, (yes, it has again become “textbook overbought”).  And with but a week to run in Earnings Season for Q1, growth hasn’t materially improved (which for you WestPalmBeachers down there means in this case hasn’t “lowered”) the aforementioned P/E of the S&P.  “Stagflation” indeed:  coming to an economic squeeze near you. Further, with 18 metrics due in the new week for the Econ Baro, we’ll know more on the staging of “stagflation”.

Clearly staging a rally into week’s end was Gold.  To our two panel graphic we go featuring on the left Gold’s daily bars from three months ago-to-date and on the right price’s 10-day Market Profile.  Note the sudden up-lurch in the “Baby Blues”, (and you know the drill:  “Follow the Blues… else…”).  Meanwhile by the Profile, Gold’s fattest volume support price is 2324:

With the like graphic for Silver, her “Baby Blues” (at left) already have been lurching higher, with present price just tucked in there above the 28.35 Profile bar (at right).  As earlier noted in the graphic of Gold’s weekly bars, the Gold/Silver ratio is now 83.4x versus the century-to-date average of 68.2x, i.e. Silver comparatively remains El Cheapo, (and Gold markedly so by currency debasement, in turn making Silver Super Cheapo).  So don’t you be a Cheapo by forgetting Sister Silver!

Toward the wrap, let’s go to the stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3765
Gold’s All-Time Intra-Day High:  2449 (12 April 2024)
2024’s High:  2449 (12 April 2024)
Gold’s All-Time Closing High:  2391 (11 April 2024)
10-Session directional range:  up to 2386 (from 2285) = +101 points or +4.4%
Trading Resistance:  2374
Gold Currently:  2367, (expected daily trading range [“EDTR”]: 37 points)
Trading Support:  various from 2333 to 2298, most notably therein 2324
10-Session “volume-weighted” average price magnet:  2328
Structural Support:  2247-2171
The Weekly Parabolic Price to flip Short:  2213
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
The 300-Day Moving Average:  2028 and rising
2024’s Low:  1996 (14 February)
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

“So, mmb, we got your closer ready to go!“

And thank you, Squire, ’tis as rich as they come.  We’ll spare (to benevolently save embarrassment) such pundit’s identity, but here we go.  Ready?  Hat-tip Dow Jones Newswires from last Monday:

  • “Gold is overvalued now and won’t help you beat inflation in coming years.”

(Even the “doggy” can’t believe that one!)

Write it down and diarize to review, given ever-groovy Gold 3700+ is already overdue!

Cheers!
 
 …m…

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