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Precious Metals

Why Silver’s Breakout Into a Major New Upleg Is Likely Soon

Source: Clive Maund for Streetwise Reports   08/18/2021

Technical analyst Clive Maund charts silver and explains why he believes the metal…

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This article was originally published by Streetwise Reports

Source: Clive Maund for Streetwise Reports   08/18/2021

Technical analyst Clive Maund charts silver and explains why he believes the metal is in the “perfect” buy spot.

Silver is now regarded as the best value hard asset around, and it really doesn’t matter in the long-term whether J. P. Morgan and the other banks try to suppress the price or not. Like gold, it has intrinsic value and, in the situation of high inflation that we are moving into and that has already started, when most asset prices are surging it is illogical to think that silver won’t do likewise.

If they insist on trying to sit on it, all that will happen is that the physical market will break completely from the paper market and they will be increasingly perceived as absurd. We should therefore take advantage of its current relatively very low price to accumulate silver investments across the board.

Like gold, silver put in a reversal at key support last week, which is more obvious on the weekly chart that filters out “noise”. On this chart we can see a significant hammer candle at support, although it is not as dramatic as the one in gold. On the 3-year weekly chart we can see the reversal candle at support and how it is clearly at a very good entry point here, especially as moving averages remain in bullish alignment, which makes it highly likely that the pattern that has been forming for the past year is a consolidation that will be followed by another big upleg and probably soon, obviously made more likely by mounting inflation.

While a risk-off pan selloff would obviously cause it to breach the support and crater, this doesn’t look likely soon for reasons mentioned in my parallel gold market update.

Silver’s latest COT chart is also more conducive to another major upleg developing sooner than it has been for at least a year. On it, we can see that commercial short positions and large spec long positions are at their lowest levels for at least a year, which means that interest in silver has waned, which often precedes a new upleg.


Originally posted on CliveMaund.com on August 14, 2021.

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers, and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

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Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
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Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Articles

OpEx Frontrunners BTFD After Stocks Suffer ‘Good News Is Bad News’ Dump

OpEx Frontrunners BTFD After Stocks Suffer ‘Good News Is Bad News’ Dump

Philly Fed spiked more than expected (despite employment, new orders,…

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OpEx Frontrunners BTFD After Stocks Suffer 'Good News Is Bad News' Dump

Philly Fed spiked more than expected (despite employment, new orders, and 6-month outlook all plunging), retail sales surged more than expected (despite a tumble in motor vehicle sales), and continuing jobless claims fell to a new post-COVID low (despite total number of Americans on the dole rising back above 12 million).

All good news on the face of it - so 'Sell Mortimer Sell' was the message for markets as investors threw a mini-taper-tantrum sending stocks, bonds, gold, and crude lower as the dollar spiked.

As Goldman's Chris Hussey also noted, today may simply be a case of 'sell the news,' ahead of next week's FOMC meeting. The S&P 500 is still up 18.7% ytd, despite the advent of the Delta variant and the ensuing downdraft in GDP growth forecasts for 2021. In other words, going into September, the bar had been set high. And a big driver of strong returns -- ultra-low rates -- is facing a bit of uncertainty ahead of next week's FOMC meeting (where the committee may indicate that it is preparing to announce a cut in QE in November .

Of course while stocks tumbled out of the gate from the cash open, inevitably the dip-buyers could not resist. However, some modest weakness at the close left stocks marginally lower on the day with Nasdaq the small winner...

This probably helped convince them...

As everyone and their pet rabbit dived in to front-run tomorrow's option-expiration ramp (Friday, September 17th is a large Triple Witching expiration which means that many stocks/ETFs/Indicies have large options positions that will be closed at 4pm EST on Friday). Specifically, updated open interest figures now show 35% of SPX, 50% SPY, and 35% of QQQ gamma expiring tomorrow. As you can see below we now have 4465/75 as a “pin point” which a sharp drop in the SG Momentum down to 4400.

What this essentially says is that we can anticipate high volatility on a break of 4465, with 4400 now the major support marker...

The S&P maintained its bounce off the 50DMA again...

Cyclicals decoupled from Defensives but both saw dump'n'pumps today...

Source: Bloomberg

Shorts were squeezed once again...

Source: Bloomberg

The dollar spiked to the key resistance level at the trough of Jay Powell's Jackson Hole Day speech...

Source: Bloomberg

Treasury yields spiked too today, but while the short-end is now higher in yield on the week, the long-end remains down 5bps...

Source: Bloomberg

But once 10Y Yields had tagged the pre-J-Hole speech levels, yield reversed lower...

Source: Bloomberg

Cryptos were mixed today with Bitcoin down very modestly, unable to hold $48,000 for now (ETH managed gains, hovering around $3600)...

Source: Bloomberg

Gold plunged again today, back below $1800...

Potential support for gold stands around $1,682/oz., the 38.2% Fibonacci level from its December 2015 low to 2020 peak.

Oil prices dumped and pumped like everything else to end unchanged, with WTI just below $73...

Finally, this is not normal...

But this is...

Let's just hope The ECB and The Fed are bluffing... or lots of freshly-minted stock-trading gurus will get quite a reckoning.

Tyler Durden Thu, 09/16/2021 - 16:00
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Economics

Foreigners Sold The Most US Stocks In July Since 2007 ‘Quant Crash’, China Bought Treasuries

Foreigners Sold The Most US Stocks In July Since 2007 ‘Quant Crash’, China Bought Treasuries

In the latest TIC data – from July – Treasuries…

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Foreigners Sold The Most US Stocks In July Since 2007 'Quant Crash', China Bought Treasuries

In the latest TIC data - from July - Treasuries (and agency debt) were bid by foreigners as a wave of fear crossed the globe over the Delta variant, and stocks (and corporate bonds) were dumped en masse.

  • Foreign net buying of Treasuries at $10.2b

  • Foreign net selling of equities at $34.3b

  • Foreign net selling of corporate debt at $11b

  • Foreign net buying of agency debt at $20.7b

In fact, July saw the second biggest selling of US stocks by foreigners since the August 2007 Quant Crash (as the re-emergence of COVID - in its Delta variant - sparked fear across markets mid-month before bank buybacks rescued them)...

On the bond side, China broke a 4 month streak of selling and bought $6.35bn of US Treasuries in July...

Source: Bloomberg

Japan’s holdings climbed in July by $30.5b to a record $1.31t

Source: Bloomberg

Luxembourg, Belgium, and Switzerland all saw notable selling of US Treasuries in July.

Finally, we note that the trend of 'rotation' from bonds to gold has continued in recent months...

Source: Bloomberg

Will that trend change or accelerate next week if The Fed hints at tapering?

Tyler Durden Thu, 09/16/2021 - 16:16
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Precious Metals

The United States reported a 0.7% rise in retail sales. Should I sell Gold?

The gold price has weakened more than 2% this Thursday and reached the lowest level in a month after the U.S. dollar climbed following a better than expected…

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The gold price has weakened more than 2% this Thursday and reached the lowest level in a month after the U.S. dollar climbed following a better than expected rise in U.S. retail sales for August. The United States reported a 0.7% rise in retail sales, raising investors’ expectations that the Federal Reserve will soon begin tapering down monthly bond purchases.

Fundamental analysis: U.S. retail sales figures put pressure on Gold

Gold price remains under pressure this Thursday after the U.S. dollar climbed following a better than expected rise in U.S. retail sales for August. The better than expected results positively influenced the U.S. dollar, and the most significant force behind the Gold price slide is the appreciation of the U.S. dollar.

Investors have started to behave nervously amid concerns that the Federal Reserve will have to tighten its ultra-loose monetary policy sooner than anticipated. Investors will continue to pay attention to the Federal Reserve commentaries looking for any clues, but surging COVID-19 cases could boost demand for Gold because this precious metal is considered a safe-haven asset.

“Risk appetite among market participants continues to be high, as reflected in steep rises in energy and base metals prices. Stock markets remain stable, and what is more, there has been an unexpected and considerable brightening of sentiment among industrial companies in the New York Fed district in September. Gold was not in demand in this market environment,” Commerzbank analyst Daniel Briesemann said in a note.

On the other side, Wall Street’s three main indexes continue to trade in a bull market while U.S. Federal Reserve Chairman Jerome Powell said that inflationary pressures are likely to be temporary. The coronavirus Delta variant is fueling concerns about the recovery path, but the U.S. economy continues to perform well.

The U.S. Initial Jobless Claims fell to the lowest level in almost eighteen months, and the renewed U.S. dollar strength on the back of robust U.S. data continues to negatively influence the price of Gold.

Technical analysis: $1700 represents a strong support level

Those whose interest is to invest in commodities like Gold should consider that the risk of further decline is still not over.

Data source: tradingview.com

The gold price has weakened more than 2% this Thursday, and if the price falls below $1700 support, the next target could be around $1650. The strong resistance level stands around $1850, and if the price jumps above this level, it would be a signal to trade Gold, and we have the open way to $1900. 

Summary

Gold price remains under pressure this Thursday after the U.S. dollar climbed following a better than expected rise in U.S. retail sales for August. The U.S. Initial Jobless Claims fell to the lowest level in almost eighteen months, and investors have started to behave nervously amid concerns that the Federal Reserve will have to tighten its ultra-loose monetary policy.

The post The United States reported a 0.7% rise in retail sales. Should I sell Gold? appeared first on Invezz.

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