Gold's Most Important Weekly Close Next Week.. Ever | Market Rundown
TD CTA report (plus)
Next week, if Gold closes above any number of levels, it will be the highest close weekly, monthly , and quarterly in forever…
Today:
Market Rundown
Gold Comments
TD CTA report (plus)
1- Market Rundown:
Good morning. The dollar is up 56. Bonds are stronger most pronounced in the short dated ( rate hikes less likely), Stocks are down 30 to 75 bps. Gold is down $3. Silver Fu are up 15c. Crude is down $1.60. Nat Gas is up 5c. Grains are wild with Corn up 1.7% and Wheat up 5%. Soy is up 25bps. Bitcoin is down 1.3% and ETH is down 2.8%
Comments:
US Banks:
The *current* US bank run crisis appears to be stopped. But Yellen is having a closed door Financial Stability meeting tomorrow. Perhaps more fiscal help/easing is in store.
EU Banks:
Europe, having inverted its capital structure in the CS/UBS deal may now be reaping similar panic as DeutschBank’s Tier 1 capital is taking on serious water. More likely this is also a reaction in part to the ECB’s decision to hike this week.
Gold:
Having had a phenomenal last 2 days, due to the fear of banking contagion and alternatively, the perception those quite deflationary problems would be slowed by Fed Easing/Pivoting there really is no safe reason to be short Gold.
Natural selloffs will be from longs getting out now. We do not think the Bullion banks are playing short side at all other than in their market-maker duties. Therefore, if they do smack it down, know it is almost definitely with express permission/incentive of Gov’t officials.
The most important official, at least during EU hours is Benoit Gilson, who was profiled in Meet The Central Bank(er) of Central Banks. ZH notes above he is online this morning.
Most Important Weekly Close Next Week.. Ever
Anyway. This has been a phenomenal week for sound money. And we remind readers that next week, if Gold closes above any number of levels, it will be the highest close weekly, monthly , and quarterly in forever…
This matters a great deal because investment funds will allocate new money on a monthly and quarterly basis as they shuffle capital around. This fundamentally means nothing. But in terms of inflows it is potentially monstrous.
Therefore, if we get closes as pictured here next week. Assume wholeheartedly there will be a mini buy-season as new capital is put into GLD domestically.
The one very important difference between this mini-buy season and the annual Buy Seasons we talk about frequently is: The Fed is watching this very very closely now. And that means, they do not like buy seasons occurring at ATH in Gold.
Therefore, Expect Benoit and company to be busy. Therefore, assume the buyins do happen if we get that high close, and gold does NOT pop on a new high from the fresh end of week/month/quarter buying; That means the buying was absorbed by an even bigger seller. Then be extremely careful of the Benoit smackdown risk.
Silver:
Silver is lagging for a very real reason. Banks buy Gold not silver. In all short term moves, Silver leads. In structural/macro moves, Gold leads. The longer gold leads higher, the bigger the move in Silver when it catches up. And it will catch up when Sovereign wealth funds buy it.. they will have to.
For now, know that when Gold drops, if the last couple weeks were any indication, Silver should not get destroyed like in the past.
This, if it continues to play out it could be insane. The GSR can go to 98 and it will not be bad for Silver as long as it is happening because Gold is going up. We are talking about contagion risk in metals now
Overall this price jump in gold is a byproduct of the West losing its pricing control over gold which trades globally
This [the West’s loss of control over commodity pricing] is a slowburning theme with significant implications for pricing, inflation, currencies and geopolitics over the coming decade.
Which is a result of mercantilist policies, Supply chain disruptions, and the descent of USD hegemony. It is all breaking down slowly with fits and starts.
Secular/structural changes are now on the macro radar and it is spreading:
