SD WEEKLY METALS & MARKETS
With Gold and Silver Hit Hard
This Week On The Fed’s Rate Hike Threat, Craig Hemke Joins the Show,
Discussing:
- Support at $1250 & $16.50: Will Gold and Silver Hang In There?
- “THIS IS THE HAMMER” – Chinese Buy Barclay’s
2,000 Ton Gold Vault Built in 2012
- Why Won’t Anyone Stand For Delivery and CRASH THE
COMEX?
- Fundamentals Snap the Game!:
“We’re Shaping Up For Something That’s Going to be MONUMENTAL”
- New Bull Market Is SNORTING – Institutional
Investors Are BTFD!
Doc, Dubin, & Craig Hemke Break Down All the Action In a
Critical Market Update:
MP3 podcast streaming or right-click and “save as” for download:
YouTube steaming alternative:
WEEKLY WRAP WRITE-UP
Handicapping the antics of Fed “jawboning” with Craig Hemke is always
great fun, and this week offers a target rich environment. Despite
market turmoil, Hemke makes the case that the minimal damage we’ve seen since
FOMC minutes release is the sort of trading one would expect from the new and
unfolding precious metals bull market.
Gold found support this week at its 50 day moving average and the mining
shares continue to brush aside cartel antics like Yellen and company are
nothing more than annoying gnats.
The lion’s share of this week’s show handicaps how precious metals have
been trading differently in the face of efforts by central banker masters of
the universe. We’re not out of the woods yet. But without a
doubt, precious metals markets are trading differently this year, and the
bull is alive and well.
Isn’t it rather amusing that the same FOMC meeting can be spun in multiple
ways? The April Federal Reserve confab included ample opportunity for
“jawboning” via the official statement release. Federal Reserve officials
made multiple appearances on the rubber chicken circuit and made multiple
statements to the media that week and subsequent weeks. The tenner of
Fed messaging has been more dovish than not, and this built upon Janet
Yellen’s surprisingly dovish comments to Congress earlier this year;
Yellen went as far as to warn that the Fed couldn’t rule out negative
interest rates.
Fast-forward to this week and the minutes of the same April meeting are
now cherry-picked to emphasize risks that going-forward economic data remains
supportive of interest rate normalization (stop laughing).
Truth be told, the rate of the U.S. dollar’s April decline likely factored
in Federal Reserve (and Treasury) thinking. At the close of April, the
dollar was in a world of hurt and on May 3rd, the first trading day of this
month, the “DXY”
dollar indexspiked down to 91.88 on an intraday basis. A concerted
effort to switch that trend was put in place.
By last week’s SD Weekly
Metals & Markets, with the DXY having hit an intraday peak 94.845, I
could see the effort had run its course and that’s why I forecast that DXY 95
would not be breached and that we were going back down.
That is exactly what started to happen early this week. But the Fed
put a stop to that dynamic, and with the added spin of Wednesday’s FOMC minutes release, the DXY
leaped to an intraday high of 95.51 on
Thursday – but not before China sent a shot cross Janet Yellen’s head
by devaluing the renminbi.
Above all else, managing the edifice that is the US Treasury Bond market
under conditions of large selling (China has dumped over a trillion in US
Treasuries) becomes difficult when the currency those bonds are denominated
in experiences “disorderly” and “too rapid” moves to the downside.
Currency wars are sloppy – all the more so when technically insolvent governments
and economies with vast over-capacities and malinvestments of differing
varieties lock horns.
As this weekend approached, forex dollar longs decided to taken some chips
off the table. But we’re going to see continued talk about the dollar
continuing its upward trek. Count me skeptical. This FOMC stunt
will fade, and that will probably be clear by as early as the end of next
week.
DOC’S SILVER BULLION MARKET
UPDATE:
The US Mint sold another million American
Silver Eagles this week, bringing the monthly sales total to 3.03 million
Silver
Eagle coins.
Year to date, the Mint has sold an astonishing 21,942,500 Silver
Eagles, on pace for an annual sales number north of 55 million coins!
While the Royal Canadian Mint does not release monthly sales figures for
their gold and silver bullion coins, Silver
Maple coins sales are undoubtedly on a record setting pace as well.
The RCM’s Predators Silver
Cougar continues to push silver bullion demand, and the June 9th release
of the Royal Canadian Mint’s new Superman
S-Shield 1 oz Silver Bullion Coin (mintage of 1,000,000 like Wildlife,
Birds of Prey, and Predators Series) is likely to trigger a frenzy of newbies
buying silver as well.
With Silver Eagle and Maple coins for the most part readily available
again, the Perth Mint’s 2016 Silver Kangaroo
coin sales have slowed dramatically.
90% junk silver
premiums, which often act as a leading indicator of the physical silver
market, continue to soften, with SD Bullion now dropping premiums below
Silver Eagles- the first time in nearly 5 years that 90% silver coins have
been available at better premiums than Silver Eagles.
WEEKEND LINKS
Thanks for checking out this week’s SD Weekly Metals & Markets – Eric
Dubin
