PM Weekly Market Commentary – 07/24/2020

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  • Mon, Jul 27, 2020 - 12:43am

    #11
    David Allan

    David Allan

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    PM topping out after covid?

I’m going to respectfully disagree with Dave here. It may happen but I wouldn’t count on it. 3 reasons –

1. The PM bull market is  world-centric not US centric. What happens in the US with regard to covid is significant of course and will influence but not dictate the market

2. The main driver of the PM bull market is the debasement of currencies by money printing.  Covid is one of the contributing / exacerbating factors. And the cat is now out of the bag ie massive money printing  already committed to.

3. If indeed the commercials have lost the ability to ‘rinse and repeat’ the smash-downs we’ve become accustomed to may be a thing of the past. We may be back to a more ‘honest’ market in a traditional sense.

 

  • Mon, Jul 27, 2020 - 01:02am

    #12

    davefairtex

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    gold +30 silver +1.31

Yeah I didn’t mean to suggest the PM move was over by any means.  Just the normal cycle of bull move, retracement, followed by another bull move.

But I’m just expecting this next retracement to happen alongside a move higher in the buck, as the US resumes its safe haven status once our current “state of disaster” is past.

My guess is, things will start to relax when we are a few weeks past the peak in deaths, and the metals will retrace, while the buck recovers.  And I’m just trying to put a date around that.  Not sure of the exact timing of that, but that’s what I’m thinking right now.

Arizona cases are leading the way – and Arizona deaths will – hopefully – follow soon thereafter.  They are now chopping sideways.  The nation will follow maybe 3 weeks behind AZ.

Look at Europe now.  All is well, for the most part.  New York is also fine.  That’s where the rest of the US will be soon enough.   Its the timing I’m talking about, and how that timing will affect prices.

The stage after this one (I think) will be about defaults and the resulting printfest.  If the US can get through this stage of the pandemic before the defaults hit, then the buck should act as the safe haven once more for phase 2.

The printing response to the defaults might be what ignites the second phase of the gold bull move.  We will just have to see.

This is all still just a work in progress – me thinking out loud.

  • Mon, Jul 27, 2020 - 01:38am

    #13
    VegasJim

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    PM Weekly Market Commentary – 07/24/2020

I was just going to ask if we were going to see $25/oz Ag this AM..

  • Mon, Jul 27, 2020 - 02:09am

    #14
    phusg

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    PM Weekly Market Commentary – 07/24/2020

Appreciate you thinking out loud Dave, but I’m with JAG on rising fear of second wave after the summer.

All evidence I’ve seen points to the antibodies only lasting a few months. Now there may be some residual immunity thereafter, but I’d guess any herd immunity largely gets flushed with the antibodies. Thankfully we’re getting better at treatment, but if you’re unlucky it’s still a nasty disease with potential long term effects.

As for Europe being a sea of traquility, I think it was briefly but then millions of people started travelling all over the continent for their summer holidays, apparantely thinking we are out of the woods, and we’re now getting outbreaks in multiple countries and regions.

I’m not sure all this is what’s causing the PM spike though, although it’s mainly a silver spike. If I was to have to reduce it to one causal line, then I’d suspect the dollar breakdown, which in turn was caused by the rescue/loan package that the EU leaders came up with. That and silver playing catchup due to not so distant fiat printing fears.

I’m doubtful that the global safe haven appeal of the dollar has so much to do with the US domestic situation, as most other commentators talk about how much the dollar is borrowed and traded with globally, or maybe I’m reading you wrong Dave?

I’m sympathetic to the things have changed perspective, but also wary that the feeling is based on only a few decades of life experience. History doesn’t repeat but it rhymes and all that. Sure historically fiat currencies have collapsed, but I don’t see a Comex default as one of the first shoes to drop, surely the trouble would start with defaults at the banks first?

  • Mon, Jul 27, 2020 - 02:41am

    #15
    RandomMike

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    Paying with gold

Hmmm, looks like Chris should have bought that sawmill with greenbacks.

  • Mon, Jul 27, 2020 - 02:44am

    #16

    davefairtex

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    PM Weekly Market Commentary – 07/24/2020

The UK’s papers were also talking about cross-immunity, from other corona virus outbreaks, as providing a level of immunity.

And of course there’s always the T-cell immunity too, which lasts a very long time.  People still have T-cell immunity from SC1, 17 years ago.

And while I see more cases in Europe, I don’t see more deaths.  If its just the youngsters getting it, and mostly they’ll be fine, its much ado about nothing.

If we look at Sweden’s “second wave”, deaths hardly moved, even though cases jumped.  Here – look.  I suspect the same thing will happen in Europe, now that the rest of Europe is finally behaving like Sweden.

Lastly – I see the plunging buck just about the US getting smacked with all those new cases.  My friends abroad have the sense that the US is totally getting crushed by the virus.  I’m guessing money follows fear.  Once this fear passes – and it will pass – then I really do think the buck will recover.

The US printing has not accelerated during the dollar’s decline.  In fact, it has slowed down.  The thing that happened during this time period was the “second wave” in the “safe haven” country.

If there is no safe haven currency, then gold is your only hope.  [Euro – just a partial safe haven.]  I believe that is why gold has easily moved through 1900 with no fuss at all.  That, and no shorting by the commercials too.

But I still think once virus-calm is restored, which I think it will be, within perhaps two months, the buck will return, and maybe even before then.  It is pandemic math, just like in February.  “Oh, the US isn’t going to sink beneath the waves after all.”  Safe haven returns.  Whew.  70 years of USD supremacy reasserts itself.  This sucks money out of gold.

Right now, all the fear is being magnified to drive the 2020 election.

And magnified to impel demand for the vaccine too.  You’ll need one of these every year.  It just reduces symptoms.  6 billion people x $30 x 70 year lifespan = a whole lot of money.

I really don’t trust the vaccine weasels who control “science” these days.  Six months ago I did, but I just don’t anymore.  Any news story that would scare people, and tend to sell a vaccine, I instinctively distrust.  I’ve seen them lie and distort and spin way too much to be fooled a tenth time.

Its a bad – engineered – virus, with all sorts of odd features to it.  I don’t want to get it.  But if I do, I know how to treat it.  It won’t take me out.  And it won’t take most people out either.

We will see how it plays out, of course.  If cases scream higher in Sweden after the “antibodies are flushed out” and people start to die by the thousand, then we will know you were right.  My guess is: that’s not going to happen.

  • Mon, Jul 27, 2020 - 03:27am

    #17
    RandomMike

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    PM Weekly Market Commentary – 07/24/2020

If you’ve been reading oftwominds.com, Charles Smith is basically saying it’s all over, and that now several competing forces are working in the media, one of which is something like “don’t worry, every thing is going to be ok.”

Charles says this force is powerful and is mainly to keep people spending and borrowing and to keep up the facade so the elites can extract as much as possible before it is over.

You sound like one of those forces. Personally I think next summer won’t be that much different from now, COVID wise, and a lot worse socioeconomically.

  • Mon, Jul 27, 2020 - 03:32am

    #18
    phusg

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    PM Weekly Market Commentary – 07/24/2020

And while I see more cases in Europe, I don’t see more deaths. If its just the youngsters getting it, and mostly they’ll be fine, its much ado about nothing.

The data I’ve only had time to glance at also shows < 40 year olds are the majority of cases at the moment. Sounds right with all the youngsters clustering together and exchanging bodily fluids and all that for their summer holidays. But after the party is over they all return to their families/jobs/universities/public transport.

I’m not even worried about being taken out, more so the thought of having some DNA inserted that’s going to be a drag on my quality of life for the rest of it. Yes you could call it a fear, but I don’t think an irrational one.

And magnified to impel demand for the vaccine too. You’ll need one of these every year. It just reduces symptoms. 6 billion people x $30 x 70 year lifespan = a whole lot of money.

Haha, I hadn’t even thought it of from that perspective, it sure does make it a money spinner if true. I just can’t believe that Covid19 (fear) is what would be engineered to extract money from us, there are so many more ways to do this.

One last thought then I’m digital detoxing for a bit; maybe all this dollar weakness and PM spike business is almost all about China – US/West relations taking a major turn for the worse? It’s going a bit under the radar with all the Covid fear and loathing, but I suspect ‘big money’ sees that as the big medium- long term deal.

  • Mon, Jul 27, 2020 - 05:12am

    #19

    travissidelinger

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    PM Weekly Market Commentary – 07/24/2020

PM prices are the convergence of many factors.  The magnitude and direction of all those factors are certainly challenging to debate.  So let me toss in another large factor.  I’m following information learned from Craig Hemke.  The huge demand on PMs really started back in March/April.  At that time the COMEX was basically transformed from a betting casino into a delivery system.  Those deliveries just took a few months to play out before available stock piles where depleted to levels where the big banks finally had to stop their shorting schemes.

-Travis

  • Mon, Jul 27, 2020 - 05:45am

    #20

    davefairtex

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    about china

phusg-

Interesting thought about the US-China issue.  I agree things are moving downhill rapidly.  Overall, I think there are a lot of balls in the air for China – the ridiculous border clash issue with India, seizing Hong Kong (and the international damage that is causing – even Europe is paying attention now), which has pushed Taiwan even further away, and now the major flooding and – perhaps – a catastrophe with that dam.  FP had an interesting article on the closing of that consulate; I ignore the globalist spin (!) but I thought the overall pace and collection of things ongoing was interesting.

https://foreignpolicy.com/2020/07/22/trump-shut-down-china-houston-consulate-espionage/

Related, but not exactly on point:

Heard an interview over at KWN – Pierre Lassonde, smart guy, tons of industry experience – talked about how large the margins will be at the miners with metals prices where they are now, and how the street hasn’t factored that into prices for the shares just yet.

Anyhow, he also said that both India and China were not in the gold market at all right now, based on delivery data from the refineries in Switzerland.

Curious that.  That means the buying in the US & Europe must be really monstrous.

As for irritating DNA fragments, its always something.  I mean, cancer is probably worse, right?  What are the survival odds on that one?  We should all do our best to dodge the bullet but, the less fear we operate under, the better our system works to defend us.  And – at least for me – I’ve set the odds up in my favor as much as possible.

I think we are operating under a huge climate of fear right now.  There’s a reason for that – it is not an accident.  I may be wrong about vaccines being the sole reason.  But I’m not wrong about Campaign Fear.

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