Own Gold with Reason into S&P Crash Season


So stated, let’s begin with the two most frightening graphics of the S&P we’ve ever seen since dear old Dad taught us how to read stock tables in the newspaper back in ’64. For as labeled, the following two charts speak for themselves:



Barring the above two charts having elicited your suffering a myocardial infarction, should you still be standing we again ask: “Got Gold?”

As for the entitled notion of it being the S&P’s “Crash Season”, it goes without saying the September/October stint has a long history of being considered the stock market’s most treacherous time of year. Thus given the S&P’s runaway pricing (the only 17-month doubling on record), absurd lack of earnings (“live” P/E 51.0x), and minuscule yield (1.301%), right now seasonally is as good a time as any for it all to go wrong.

“So people sell their stocks, mmb, but then what can do they do with their money?”

First, Squire, is to acknowledge there’ll be a difference between how much money they think they’re going to have versus what they’ll actually reap from selling into a bid-less market; (recall Oct ’87, Jul ’02, Sep & Oct & Nov ’08, Mar ’20, et alia). As a fine friend and Investors Roundtable member wrote to us just two weeks ago: “…I do agree that we will eventually arrive at stagflation and that a 50%-70% ‘correction’ is not unwarranted … For now I am just following the yellow brick road of fantastic unrealized gains with my worthless buddies…”

And second, Squire, is to endure the realization that next time ’round the S&P shan’t then go zooming all the way back up, if for no other reason than everyone shall expect it to so do. Once burned (’01-’02), twice shy (’08-’09), thrice diced (where’d my dough go?) Reason enough to own Gold. (Oh wait, you still can!) Especially now at 1830 when our opening Scoreboard puts Gold’s value today at 3899. Reason indeed.

Regardless, through the first eight months (plus three September trading days) of 2021, the economically-driven BEGOS Markets are “In” whilst the safe-haven markets are “Out”:


(Aside: Hey California! How’s that $6/gallon of watered-down gasoline workin’ out for ya? Calculate litres-into-gallons, apply the cost of a €uro, and you’ve nearly caught up to the $7/gallon here. So you can cease with the snide “Gas costs twice as much in Europe” argument.)

Meanwhile, enjoying a fourth consecutive weekly up-ride is Gold in settling yesterday (Friday) at 1830, leaving now well-behind the paper low-blow price (1678) suffered four weeks ago. Further, Gold is now but 39 points away from the rightmost parabolic Short trend red dot as we see here in the weekly bars. Given Gold’s “expected weekly trading range” is 51 points, that red dot is ripe for the taking in the ensuing week, in turn opening the door back to the 1900s. And should there be an S&P scare, we’ll see how Gold doth fare:


However year-over-year, there’s been little to cheer as we turn to the percentage tracks of Gold and those of certain key metals equities. Therein at best we’ve Franco-Nevada (FNV) “unch”, followed by Gold itself -6%, Newmont (NEM) -10%, the Global X Silver Miners exchange-traded fund (SIL) -14%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) -19%, Pan American Silver (PAAS) -24%, and Agnico Eagle Mines (AEM) -27%. And yet by the Rule of Leverage, upon the day we find Gold with the least percentage increase of this bunch, price itself ought already be well on its way into uncharted territory:


Now as for the “it never actually was red-hot” StateSide economy, this past week’s set of 16 incoming metrics were all over map. Notably to the better were August’s ADP Employment gains, Hourly (inflationary) Earnings and lower Unemployment Rate, along with July’s Construction Spending and reduced Trade Deficit.

But notably to the worse were Labor’s well-down read for August Payrolls, the declines for the Chicago Purchasing Managers Institute, Institute for Supply Management Services and the Conference Board’s Consumer Confidence readings, whilst July’s Factory Orders increased at but one-fourth the pace for June. Thus here’s the all-over-the-map Baro:


Notwithstanding to where this all leads, Federal Reserve Chairman Powell keeps minds at ease in maintaining that the current inflationary stint is “transitory” en route to reverting to the Bank’s 2% target, but should that not occur, heck, the target can simply be raised. Ok.

But not to worry, because there’ll still be “free” stuff, as (per the words of Dow Jones Newswires) “Democrats are counting on money from tougher tax enforcement to fund their agenda.” But upon that not working out, you can consider moving to Japan where resigning Prime Minister Yoshihide “You Should Hide” Suga’s successor may well be an economic stimulus presser. To reprise Welsh football commentator Toby Charles, “Ohhh ’tis all happening there!”

And happening here as we go ’round the horn across the last 21 trading days for all eight components of BEGOS, save for Copper, every linear regression grey trendline is in ascent as is basically true for their baby blue dots of trend consistency, (with the notion of “Crash Season” nonetheless in the balance):


As to the 10-day Market Profiles for the precious metals, similar to what we saw a week ago, the present prices (white lines) for Gold on the left and for Silver on the right are near the top of their respective stacks, with volume support levels as noted:


‘Course it being month’s end, (plus the wee nub for September’s wend), here we’ve Gold’s Structure by the monthly bars from a decade ago-to-date. And as to our 2021 forecast high for 2401, yes, ’tis getting a bit late; but with the potential of “it all going wrong” in the year’s balance, ’tis still on the plate:


We began with the S&P, let’s thus end with it (pun intended) with this from our “Did You Know? Dept.” Wary that “Crash Season” can happen — and barring “The When” — ultimately will, did you know that across the past 20 years the average percentage change from the S&P’s September high to its October low is -8.2%? In such vacuum, we’d see the S&P (today 4535) move down to 4163.

More realistically however, to further “correct” to the top of the regression channel (3215) per the first of those two frightening S&P charts would be a correction of -29%. Is that out of range historically for a September-October stint? No. (See 1987 & 2008). And today’s extremes are far more so than back then. Thus it remains merely about “The When”. So, again, don’t get caught oversold: save your wealth with some Gold!



Gold Revisits the Doc and Stocks Further Rock


Including those still installed at the Salzburg clinical offices of noted analyst in the psychosis of precious metals, Dr. Youara Nichtsogut, to whom Gold late yesterday (Friday) paid a visit following what the FedHead said:

Dr. Nichtsogut: “Liebling! So kind of you to again grace us vith your presence! Vee last saw you here almost four years ago on 21 October 2017. And since zen, you made an all-time high at 2089 on 07 August just a year ago! Congratulations! Clearly your following our recommended treatment to go vith zee flow is working! And Mr. Powell of zee Fed gave you a nice bounce yesterday! So, life is good, eh?”

Gold, (lying upon the couch): “Not really, Nichty. The flow of dough from the Fed to the Treasury is so debasedly diabolical that I’m truly worth 3900 right now! But these nimrod know-nothing bankers and investors and traders are keeping me hemmed in at less than half that! I feel so low…”

Dr. Nichtsogut: “Zat is vhat you always say vhen you come here, Liebling, zat you are being treated like a common commodity of zee lower classes.”

Gold: “Nichty, the last time I saw you the US money supply was $13.8 trillion: today it’s $20.8 trillion! I should be at almost 4000 today! But instead, everybody wants to buy earningless stocks and foundationless crypto-currencies. So I’m stuck here at 1800. Hell, I was at 1800 ten years ago! Now they just say I’m big and bulky and can’t be used to buy anything! Nobody wants me…”

Dr. Nichtsogut: “Relax, Liebling. You merely are suffering a mild case of PLSE…”

Gold: “But I’m not ‘pleased’ whatsoever, Nichty!”

Dr. Nichtsogut: No, no, Liebling: it means a Psychotic Lack of Self-Esteem. Do not overlook zat you have been adored for 5,000 years and shall be for another 5,000! I vill be (as goes your expression) ‘pushing up zee daisies’ next to Maria Mozart here in Salzburg; but one day a precious ounce of you shall be worth $1,000,000!”

Gold: “Well, if you say so, Nichty…”

Dr. Nichtsogut: “Liebling, I know so! Vee hear it said zat one day za vorld awakes and you vill be $1,000 higher zan you vere za day before. Again, my directive to you is to still stay vith za flow, just be yourself, and as I said last time, za buyers vill be flocking to you in droves. Now: today’s time is up and zat vill be five Vienna Philharmonics please.”

Gold: “From two to three … and now five??”

Dr. Nichtsogut: “‘Tis za svelling inflation, Liebling. You need to rise faster!”

Gold: “Aaaggghhh!!”

Hardly is Gold happy, Indeed even after what the FedHead said, Gold is stilling seeing red, year-to-date -4.3% and still trading beneath the curl of the parabolic Short dots as we see here across price’s weekly bars from this time a year ago-to-date:


Hardly too has it been an “august August” for Gold, price now essentially net “unch” from July’s settle of 1817 in closing at 1821 for this past week, albeit +2.1% thereto, and still with two trading day’s left in the month’s balance. Moreover, Gold’s distance to the rightmost red dot has been reduced to 56 points: thus given price’s “expected weekly trading range” is now 53 points — and with Dr. Nichtsogut’s encouragement — we can see the parabolic trend soon flip up to Long. Aiding and abetting that could come in just another week’s time as once past StateSide Labor day (06 September) it all goes wrong for the S&P 500 … ‘course, we don’t “know” that, but the data overwhelming support “it” so doing both seasonally and earningslessly.

And yet the doves continue to fly from the Fed. Each six-to-seven weeks upon the Federal Open Market Committee issuing a Policy Statement, rather than be told what it said by the likes of CNBS/Bloomy/Foxy, we instead actually read the Statement. Thus we did same yesterday in reading Chairman Powell’s purported “Fed clarity” address from a virtual Jackson Hole (aka Tiskilwa, Illinois).

And you know what? Albeit more lengthy than an FOMC Statement, it said the same thing almost verbatim we’ve been reading time and again in recent FOMC Statements: “We haven’t started to taper, but we’ll do so later, and interest levels will remain dependent on data.” Yawn. What else is new: taper talk continues but never really comes through. And thus at yesterday’s beheading of the Buck, the markets gained luck.

The theme through the ongoing Fed conference this weekend is that of an “Uneven Economy … as the Delta variant of the coronavirus continues to pose uncertainty for the U.S. economy”; that in the words of Dow Jones Newswires which not two months back directly deemed the economy as “red hot”. ‘Course, by our Economic Barometer ’twas not. But now the Fed’s use of the word “uneven” comes duly with reason. To wit, here’s the Baro, not teasin’:


To be sure, just as all of our BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500) got a pump from Powell, so too did the Baro get an on-balance bump from last week’s metrics clump. Positively for July, Home Sales — both Existing and New — along with Personal Income all improved; negatively, Personal Spending slowed, Durable Orders marginally shrank, and the Fed’s favourite gauge of inflation — the Core reading of the Personal Consumption Expenditures Index — posted its smallest expansion (+0.3) since February. Net, net, there’s your “uneven” Baro. And, perhaps a slightly more relieved Powell.

For the FedSpeak from the prior week jerked the rug enough to see the S&P succumb by better than -110 points in just three days. But now with confirmation of the Fed’s ongoing “delay of game”, we’ve yet another all-time high for the S&P, the mighty Index having risen 106% since its COVID low just 363 trading days ago. That is the only 17-month doubling of the S&P since at least millennium-to-date.

Which leaves us with the usual questions:

  • How’s that “live” S&P price/earnings ratio of 49.7x and wee yield of 1.303% workin’ out for ya?
  • Has the S&P crashed yet?

Any notion of fiscal responsibility crashed long ago in the hallowed halls of the StateSide Congress, their having just unabashedly passed a $3.5 trillion “budget blueprint” with another $1 trillion for “infrastructure” waiting in the wings. Recall the calculation that if all the nation’s wealth of the so-called “one-percent” were to be confiscated, ‘twould run the U.S. for just a few months? Then: “Who’s Next?”–[The Who, ’71]

Next question:

Got Gold???

Meanwhile from the “We’re Not Waiting Around Either Dept.”, on the heels of Banxico we’ve now Hanguk “We Won Again!” Eunhaeng having just raised its Base Rate to 0.75%. That’s puttin’ a little bit of Seoul in yer portfolio.

And here you can see Gold also getting a little soul in its own mojo as we see below on the left across the daily bars from three months ago-to-date. But on the right, Silver has as yet to exhibit similar upside momentum, the Gold/Silver ratio marginally above the 21-year average (66.3x) at 75.8x:


Still, an “anticipated” Fed pump shows profound in the precious metals’ last ten days with both Gold (below left) and Sister Silver (below right) presently priced near the top of their respective Profiles:


All of which lends to Gold’s positioning in its stack:

The Gold Stack

Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3896
Gold’s All-Time Intra-Day High: 2089 (07 August 2020)
Gold’s All-Time Closing High: 2075 (06 August 2020)
2021’s High: 1963 (06 January)
The Gateway to 2000: 1900+
The Weekly Parabolic Price to flip Long: 1877
The 300-Day Moving Average: 1843 and rising
Trading Resistance: (none per the Profile)
10-Session directional range: up to 1822 (from 1772) = +50 points or +2.8%
Gold Currently: 1821, (expected daily trading range [“EDTR”]: 24 points)
Trading Support: 1806 / 1788
The Final Frontier: 1800-1900
The Northern Front: 1800-1750
10-Session “volume-weighted” average price magnet: 1793
On Maneuvers: 1750-1579
2021’s Low: 1673 (08 March)
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

As for the new week: ’tis by tradition (rather than by the calendar) the final week of StateSide summer vacation, following which — historically — the S&P 500 oft comes back down to its senses. More on that next time wherein we’ll review the stance of the BEGOS Markets year-to-date with a bona fide “crash season” potentially in the offing (double entendre). But don’t you get offed: make the Doc look good and add some Gold to your loft!


Gold (Unloved) Yet to Get the Cash; S&P (Adored) Yet to Get the Crash


And as you regular readers well know, the current market levels of Gold (1783) and the S&P (4442) ought justifiably be swapped: for ‘twould approximate quite well their “true” value today.

But even with the S&P beginning to show cracks in its otherwise relentless upside glide, Gold yesterday (Friday) closed out its narrowest trading week in over a year (since that ending 14 February 2020) at the unloved 1783 level. Yes, that’s the very same 1783 level which Gold first achieved a decade ago on 09 August 2011 when the U.S. money supply (by “M2”) was $9.46 trillion, just 45.4% of today’s $20.86 trillion fauxnomenon. Further with no respect to value — and the market never being wrong — on goes Gold’s otherwise sleepy parabolic Short trend, now eight weeks in duration, per the declining red dots in this year-over-year view of the weekly bars:


The S&P however finished its week at the adored 4442 level, a mere 38 points below the all-time closing high of 4480 … but not without having to “bear” (luv it) a mid-week scare. As penned back in our 31 July missive “An August August for Gold?” (and ’tis been hardly august at that): “…the Federal Open Market Committee … know they’re … a catalyst for ‘it all going wrong’ the instant they jerk the rug a tad…” as they just so inferred via their 27/28 July Meeting Minutes for slowing the flow — with just four months to go — this year from the asset purchasing tap.

Perhaps just a wee jerk of the rug, but ’twas enough to put our “Baby Blues” of S&P 500 futures trend consistency into free-fall as we see here on the left by the daily bars for the past month, and as well flip the daily Parabolics dots from Long to Short on the right. Perhaps an early harbinger (should we have one this year) of “crash season” (Sep/Oct)?


“But mmb, this earnings season was obviously so much better than last year…”

Squire, how could earnings not have improved over those Covid-infused of Q2 a year ago? Indeed this year’s Q2 was supposed to have been “The Big Quarter”, right? “Well Bud, we’re right in the earnings sweet spot post-Covid and Pre-Delta: it cannot get any better than this!”

At a high-level, let’s briefly turn to our summary of Q2’s Earnings Season (06 July – 20 August) for the S&P:

■ 454 of the 505 constituents reported within that calendar parameter;

■ 390 of the constituents reported positive earnings for Q2 in both 2020 and 2021;

■ The median earnings improvement for those 390 constituents was +35.4%.

Therefore, Squire, here’s the problem: to bring the current “live” price/earnings ratio of 48.5x down to its lifetime (since 1957) median of 17.8x (per Bob’s Shiller’s “trailing 12 months” measure) — which as you know always happens — at least one of two things must occur:

■ Either the “E” (earnings) have to grow at nearly five times the +35.4% recorded for Q2, which never shall happen given Q2 this time ’round being a one-off hyper-growth gift compared to the shutdown effects of a year ago; and/or

■ The “P” (price) has to correct by -63.3%, which demonstratively can happen given those corrections exceeding -50% in both 2001-2002 and 2008-2009. “Get Ready…”–[The Temptations, ’66].

And the dirty little secret continues to be that the “risk-less” yield on the U.S. T-Bond at 1.874% is 41.4% higher than the “risk-full” (understatement) yield on the S&P 500 at 1.325%. But that doesn’t fit the modern-day market mania whereby you need to sound cool at the barbeque because you own shares of Tesla (a four-wheel battery company with a current P/E of 304.6x instead of boring old Ford’s 14.3x or General Motors 5.6x).

The stock market crash really is coming; we just don’t know when: first “they” must play the game of who or what to blame. And yet here we’ve Gold today at 1783 trading at but 45.6% of its dollar-debased value of 3908. The choice is obvious: “Got Gold?”

To be sure, improved metrics this past week were posted for July’s Leading Indicators, Industrial Production, Capacity Utilization and Permits for building new Houses.

But too, there was the dark side: August’s New York State Empire Index, Philly Fed Index, and National Association of Home Builders Index all dropped substantially; July’s Retail Sales actually shrank; and June’s Business Inventories bloated. Sung to the tune of Henry Mancini’s iconic ‘Moon River’: “StaaaaagFlation, wider than a mile…”, itself right in tune with Dow Jones Newswires reporting this past week that “The Covid-19 variant is damping consumer demand and raising costs for business after a spring and summer that seemed to promise a rapid recovery.” (Has the S&P crashed yet?)

Stabilizing from its own micro-crash in the prior week is our Gold, as noted just having recorded its narrowest trading week in a year-and-a-half. Hence the most recent price bunching in the three-months daily bars chart (below left). Then in Gold’s 10-day Market Profile (below right) we see the dominant-volume traded prices as denoted:


But with the same graphical set for Silver: ouch! Indeed as economically-leading industrial metal Copper comes unglued (hint-hint, nudge-nudge, elbow-elbow), Sister Silver can’t escape her gloomy mood (left), in turn creating quite the thicket of labeled overhead trading resistance (right):


And now for this week’s CTQQ (“Closing Think Quick Quiz”): How many of the S&P’s last 50 Septembers (1971-2020) have been down?

“Uhh, more than half of ’em, mmb?”

Very good, Squire: indeed 27 of them have been downers, and when significantly so, with finales well into October. Hence our definition of “crash season”. ‘Course, we’ve still two full trading weeks to go until this year’s StateSide Labor Day (06 September), after which stocks in those down years further slid in earnest.

But you are prudently prepared, right? (…crick-crick …crick-crick …crick-crick…) To own the unloved? Or ride the adored? It again begs the question: Got Gold in your hoard?


Price Put Athwart, Gold Roars Back from Support


‘Course, hardly was the week’s gain impressive solely by the mere up blip in the above Gold Scoreboard’s evolving price track for this year. Indeed toward our seeking an “august August” for Gold, a weekly gain of 18 points (+1.0%) is more in line with the so-called sleepy dog days of August.

“Hold it, hold it, mmb! Gold got creamed on Monday by nearly 100 points! Right?”

An absolutely valid point there, Squire. If we measure from the prior Friday’s (06 August) high of 1807, the move down to last Monday’s (09 August) low of 1678 was a 129-point drop, (-7.1%). ‘Twas almost perfectly in line with the following sentence from last week’s missive: “…Were that zone [1796-1750] to fail (don’t say it) 1674 comes onto the board…” And essentially it did.

To be sure, there was no inkling of such “sell” from the prior Friday. Rather, Monday’s “sell” had all the look of “the lads” having consorted — via their weekend barbeques and mobile devices — to “sell” at Monday’s 00:00 Central Euro Time opening whilst the balance of world was in one form or another of somewhat inebriated summer Sunday slumber.

And ’twas within just that first trading hour that Gold fell from 1765 to the week’s low of 1678. Then ensued the “buying with both fists” as we’d offered in closing out last week’s piece.

Far be it from us to fully ferret out the rationale behind the “sell” other than (with reference to Basel III in our 03 July 2021 edition entitled “Stocks Cavort; Gold Goes Short”) Monday’s price demise having been an effort to drive down Gold’s paper level such as to pick up the requisite physical at more bargain levels. Indeed, a tip of the cap to Matt “Go Bears!” Piepenburg whose thoughtfully comprehensive explanation of last Monday’s metals malaise skated across the transom here. And considering Gold by the Scoreboard is valued at 3903, this present 1782 level remains a bountiful bargain.

Moreover: Gold’s roaring back from the stated support is a clear warning not to be Short. Recall that Gold settled the month of July at 1817: that is just 35 points above here with 13 trading day’s left in the month’s balance. Shall this be Gold’s ninth up August of the last 12? We still believe so: augustly so. Further, for those of you fortunate enough to be scoring at home, Gold’s “expected weekly trading range” is now set at 56 points, the notion of an again higher August well within just a week’s reach.

But farther out the curve by Gold’s weekly bars, the parabolic trend certainly remains Short, the hurdle of 1894 still better than 100 points to the upside. Nonetheless: price clearly has roared back from the rose-coloured line of support: you tell ’em there, Leo!


Meanwhile, the StateSide Economic Barometer — on which 15 June is the view’s highest peak — did not endure a very good week after Joe’s Jobs Jump. Among this past week’s 11 incoming metrics, the Econ Baro benefited from July’s combined increase in Export Prices with the decrease in Import Prices, and as well from the increase in Q2’s Unit Labor Costs, (itself typically a sign of improving economic activity).

But negatively, July’s pace of retail inflation was half June’s (although that plays positively into the Federal Reserve’s “transitory” inflation assessment), the month’s Treasury Budget ballooned beyond belief, Q2’s Productivity was nearly halved from that for Q1, and The University of Michigan’s “Go Blue!” Sentiment Survey for August took its worst month-over-month wallop since the COVID depths of April a year ago.

And from this week’s Fed episode of “Yes Taper, No Taper” came SanFran FedPrez Mary “Quite Contrary” Daly going against the grain of fellow Chicago FedPrez Charles “Easy Money” Evans, her suggesting that asset purchase reduction can be put in force this year. (Oh dear…)

As for the straight-up “Look Ma, No Earnings!” S&P 500, through this year’s 155 trading days, 58 have registered all-time-highs, i.e. once every three days. ‘Course as we approach the cusp of traditional “crash season” (September/October), we ‘spect such pace to diminish, if not outright stop … perhaps for years. (Write it down).

More specifically: ’tis “said” that these days 70%-80% of stock trading volume is algorithmic, (which for you WestPalmBeachers down there means computers rather than humans are placing trades, with buying begetting buying). The problem obviously is that when the selling starts — and then repetitiously begets itself — humans shall have little chance of stopping it: any of you who were trading the S&P 500 futures during the fall (both seasonally and directionally) of 2008 experienced such terrifically swift damage.

This next time ’round, given the S&P today being at heretofore unheard of valuation via earnings — and algorithmic trading being even more prominent than ’twas 13 years ago — the compounding of relentless selling shall be unfathomable. Beyond stock exchange circuit breakers (which merely are temporary), the only human intervention to control the carnage shall be to rip out the power cords to the computers … which shan’t be easy assuming they are housed in high-security complexes (…crick-crick …crick-crick …crick-crick…)

Either way, here are the percentage tracks of the five primary BEGOS Markets across the past 21 trading days (one month), led of course by the cricket-wooing S&P, and by Oil for volatility:


In turning to our two-panel graphic of the precious metals’ daily bars from three months ago-to-date, to be sure, ’twasn’t the sound of crickets being heard following the “sell” this past Monday. Rather, ’twas the cacophony of two-fisted buying which ensued. (We like that algorithm). But notable therein was Gold on the left recovering in full whereas Silver on the right has lagged. Indeed the Gold/Silver ratio increased from 72.5x a week ago to 75.0x today, (the millennium-to-date average being 66.3x):


Now the highlight of the next two-panel graphic of the precious metals’ 10-day Market Profiles is the dearth of trading volume from last Monday’s first hour “sell”. That’s what selling 23,537 Gold contracts (left) and 8,655 Silver contracts (right) into a nearly bid-less market looks like:


Fun, eh? Let’s go to…

The Gold Stack

Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3903
Gold’s All-Time Intra-Day High: 2089 (07 August 2020)
Gold’s All-Time Closing High: 2075 (06 August 2020)
2021’s High: 1963 (06 January)
The Gateway to 2000: 1900+
The Weekly Parabolic Price to flip Long: 1894
The 300-Day Moving Average: 1841 and rising
Trading Resistance: 1803 / 1813 / 1835
The Final Frontier: 1800-1900
The Northern Front: 1800-1750

Gold Currently: 1782, (expected daily trading range [“EDTR”]: 28 points)

10-Session “volume-weighted” average price magnet: 1774
Trading Support: 1774 / 1765 / 1749 / 1731
On Maneuvers: 1750-1579
10-Session directional range: down to 1678 (from 1836) = -158 points or -8.6%
2021’s Low: 1673 (08 March)
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

We’ll part for this week with these observations:

  • Yep, they just did it again: Banxico hiked its overnight lending rate; ’tis now 4.47%. Are you folks up there in the Eccles Building paying attention?
  • An annual rite of modern-day August is the proliferation of global warming warnings. Our favourite this time ’round is from the Intergovernmental Panel on Climate Change, citing ’tis “Code red for humanity”. Betcha the S&P’s demise beats ’em to it.
  • We all know that polls are commissioned to produce a desired pre-determined result, but we nevertheless got a chuckle out of this one from Foxy: “Nearly 80 Percent of Americans Blame Biden for Inflation Surge”. And yet he received a record-obliterating 81 million votes? (Yes, the latter came first).
  • If you’ve given some thought to moving StateSide, here’s some encouragement to so do. The latest “free everything” infrastructure plan is to include: universal nursery school, a couple years of community college, and Medicare coverage for ears, teeth and eyes. Therefore: keep your eyes on the prize: GOLD!



Gold Thrust into August a Cussed Bust


Abhorring Friday’s Bureau of Labor Statistics report of fervently faster growth for July’s jobs, Gold’s price in turn careened down to as low as 1760.

ADP counts actual payroll transactions; Labor does household/payroll surveys. Which report do you believe?

Either way, the result for Gold in swinging from the ADP report to that from Labor 48 hours later was -76 points (-4.2%), price settling yesterday (Friday) at 1764. By weekly measures, ’twas Gold’s worst performance and lowest close since that ending 18 June. The market never being wrong, you better believe it.

As for belief in all things StateSide-economic, we look to the Economic Barometer. Net of this past week’s 13 incoming metrics, here is the Baro’s present state from one year ago-to-date, the Labor Department making it go up straight.

The red line therein is, of course, the S&P 500. At 4436, ’tis at an all-time high. Isn’t that exciting? And our “live” price/earnings ratio is now back above 50x (50.7x), well beyond double that of the p/e’s historical mean of 19.4x. Or if you prefer, nearly triple the historical median of 17.8x. ‘Course, the word “exciting” shall morph into “biting” when (as has always historically happened) the p/e again reverts to said mean (…crick-crick …crick-crick …crick-crick…) Oh there go those crickets again.

August is a lovely month for northern hemisphere crickets. ‘Round these parts, the provençal crickets team up each evening with the cicadas in auditory orchestral splendor as if in celebration of Gold’s typical August price rise. But thus far in this young August, hardly august is Gold as apparently all is right with the financial foundation of the States, and thus in turn, the industrialized world. To wit:

  • The U.S. money supply (“M2”) at this writing has increased by only 13% from this date a year ago;
  • The U.S. Congress has just missed the deadline to raise the debt ceiling, (but up ’twill go);
  • The U.S. stock market at its all-time high confirms the new paradigm of earnings being meaningless.

‘Tis all a beautiful thing. (“Has the S&P crashed yet?”)

Not so much crashing but certainly correcting was Gold this past week. Today at the noted price of 1764, we recall Gold having first achieved that level exactly 10 years ago come Monday (on 09 August 2011) when the U.S. money supply was $9.46 trillion. Today ’tis $20.87 trillion. See our opening Gold Scoreboard and cue Luke Skywalker: “There’s something not right here…” –[The Empire Strikes Back, Lucasfilm/20th Century Fox, ’80].

“But mmb, back then you flat out stated that Gold ‘had gotten ahead of itself’…”

Indeed we did, Squire, and we appreciate your recollection thereto. Fast-forward to today, however, and we can flat out state that Gold is considerably behind itself. You regular readers who well-understand that can call your local sovereign bank to so remind them.

Indeed with respect to corporate earnings and currency debasement: 10 years ago had we presented the following two numbers to you — 1764 and 4436 — and had then asked you which two markets would be priced at those levels 10 years hence, clearly the answer would have been respectively the S&P and Gold. And yet today, ’tis total transposition from logic. “The prosecution rests.”

Not resting is Gold’s weekly parabolic Short trend, which had appeared without any material downside across the prior five weeks. But then the bad guys just showed up:


Still, with the perspective of looking back across the past 10 years of Gold’s daily closes, we are seeing some magnetism between price and its infamous 300-day moving average, the latter itself rising, but at a reduced rate. And it remains a fair piece away, our top line there for 2401 this year. We’ll simply have to wait and see how Gold shall fare upon the anticipated “all going wrong” scare … “Coming this fall in living color on CNBS”:


Meanwhile within the ongoing Federal Reserve pie-fight, (despite the Federal Open Market Committee all voting alike), FedViceChair Richard “Clearly” Clarida in an address this past Wednesday suggested the Fed could raise rates as soon as 2023. “Uh Dick… what about now?” (Just sayin’, but that would elicit the -67% S&P correction). And yet previously, FedGov Lael “The Brain” Brainard had just rather conversely stated that ’tis still too soon to taper. So on goes that caper.

In true taper is the track of Gold’s “Baby Blues”, the dots of linear regression trend consistency falling as we below see on the left across price’s daily bars from three months ago-to-date. Where does price stop its descent? The cluster at mid-graph (1796-1750) ought offer structural support, through much of which price has already traveled.

Were that zone to fail (don’t say it) 1674 comes onto the board. But the good news for you Fibonacci Fans out there is — basis that 1674 March low — Gold’s overall fall from 1919 (since 01 June) essentially completed a Golden Ratio retracement ’round this past week’s noted low of 1760. As for the 10-day Market Profile on the right, Gold’s reclamation of 1804 for a start would be smart, which is near-term possible given the current “expected weekly trading range” of 51 points for the yellow metal:


Sadly for Sister Silver, ’tis all been going wrong for her, rather than (as yet) for the S&P. Even after the big song-and-dance we herein did a week ago in citing that Gold’s linreg trend was up, as was that for Copper, and that historically when same has been down for Silver that she then turns right ’round upward toward gaining three full points across several weeks.

BUT: Gold’s linreg trend (thank you Labor survey) has just now rotated to negative, whilst that for Copper appears swiftly en route to so doing. Here are Silver’s daily bars at left, and Profile at right. Silver entered structural support at 25.69, which extends (off the chart) to as low as 23.74, should the white metal that far bore:


Having mentioned Cousin Copper, as a bonus graphic here is its stance, the “Baby Blues” (left) obviously running out of puff, with price buried near the base of the Profile (right). ‘Tis looking like a test of the teens is in the trend for the red metal:


Next week for the Econ Baro is “inflation week”. Transitory? Or Perma-Story? Regardless of Gold’s having been thrust into August a cussed bust in succumbing to the Labor survey, as written to our Investors Roundtable yesterday, ’tis an opportune time to buy Gold and Silver with both fists, “Allez, Allez”!




“An August August for Gold?”


Moreover, ’twas during August just a year ago when Gold impressively printed its All-Time High at 2089. August indeed, that August. But from the “That Was Then, This Is Now Dept.”, what about this August? Shall it be another august August for Gold? Or rather a month of directionless disorganization, similar to the bedlam from one Dr. August Balls of Nice, (aka “The Great Balls”, so dubbed by Inspecteur Jacques Clouseau)?

To be sure, Gold was at best disorganized throughout July, price settling yesterday (Friday) at 1817. Having opened July at 1771 and not reaching below 1766, price could not clear 1835, the month’s wee 3.9% trading range being Gold’s narrowest since that recorded over two years ago in May 2019.

Our take is that Gold shall record another august August. Not necessarily up to its All-Time High (2089), let alone our forecast high for this year (2401). But nonetheless, an up month in the offing. And if for no other technical reason than price’s refusing to succumb to the ongoing parabolic Short trend as denoted by the rightmost red dots in this chart of Gold’s weekly bars from one year ago-to-date:


“So mmb, are you already eliminating August for Gold reaching your 2401 level?”

Not absolutely ruling it out, Squire; rather, being seasonally realistic. Our sense is that Gold’s best shot to accelerate upward shall occur during the September-October period when — for everything else — “it all goes wrong”. Such timely market turmoil you and I see as justified both fundamentally and quantitatively, but to which the balance of the investing world seem out to lunch, (which is always how it is before IT suddenly happens).

Still to this day when we query money folk about how they’re prepared to protect their or their client’s portfolios upon waking up with the S&P 500 futures “locked limit-down”, it remains that the subject swiftly is changed and/or we hear crickets. And as we’ve already cited: upon the price/earnings ratio of the S&P reverting to its mean (19.2x) — which it has always done throughout the Index’s 64-year history — the loss this time ’round regressed into “Dow” terms may exceed -20,000 points in as little as three “trading-suspended” days. (As a recent reminder exercise, calculate the “Dow” high from 19 February to its 18 March low of just a year ago).

And now Dr. Anthony Fauci declares our COVID vaccinations shan’t necessarily shield us from DELTA? What’s next? OMEGA? Got Gold?

Surely none of us wish to see Gold soar because the world ends, (“Dow +2”). We merely wish to see Gold rise to meet its Scoreboard debasement value, presently shown as 3888.

Still to date in 2021, hardly is Gold on any run. For as we turn to our BEGOS Markets Standings, the yellow metal is but one notch above the bumbling Bond:


‘Course, we cannot completely discredit the Bond: for as the “red-hot” economy was instead cooling through most of Q2, the price of the Bond today is 7.6% above its 18 March low, the yield since then having fallen from 2.505% to now 1.897%. Clearly that is indicative of Bond traders (who live in reality) following the Economic Barometer, whilst equity traders (who live in lemming land) chase earningless risk. Here’s the Baro, its rightmost pale violet stint essentially representative of the metrics reported for Q2.

Thus when you just saw the “Advanced Gross Domestic Product” annualized pace for Q2 come in nearly flat (6.5%) compared with that of Q1 (6.3%) — whilst all around were projecting a pace some 30% higher (8.5%) — hardly were you surprised when CNBS reported: “U.S. GDP Rose 6.5% Last Quarter, Well below Expectations”. (But that’s why you follow our stuff).

Still, with July’s Chicago Purchasing Managers Index and the Conference Board’s read on Consumer Confidence both improving, June’s Personal Income was flat with Spending hardly higher, New Home Sales slowing, and Pending Home Sales shrinking. “Red-hot”? Not: as so anticipated the Federal Open Market Committee, their only “talking taper” as usual in again voting unanimously last Wednesday to do nothing. They know they’re both stuck as well as a catalyst for “it all going wrong” the instant they jerk the rug a tad.

Meanwhile, we have a positive read on Q2 Earnings Season: with 277 of the S&P 500‘s constituents having reported, 88% having beaten their bottom lines of a year ago, far and away the best year-over-year performance we’ve ever recorded. (‘Course going from “shut” to “open” makes for such substantive improvement). In fact, so “august” are earnings improvements that (thus far) they’ve knocked our “live” p/e for the S&P down from 56.3x a week ago to 49.8x today. Why, a return to the 19.2x median warrants an S&P correction of now just -61%. Are you prepared? (…crick-crick …crick-crick.. .crick-crick…)

As to the yellow metal’s aforementioned state of disorganization, so ’tis further emphasized here per our graphic of Gold & Co’s percentage tracks from one year ago-to-date, all of which are under water save for (barely) Franco-Nevada (FNV) +2%, followed by Newmont (NEM) -4%, Gold itself -7%, the Global X Silver Miners exchange-traded fund (SIL) -11%, Agnico Eagle Mines (AEM) -14%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) -16%, and from worst-to-first-and-back-to-worst Pan American Silver (PAAS) -21%. But upon their all going well when “it all goes wrong”, don’t forget the leverage, luv:


Now here’s an eye-opener that is as Pro-Silver as ever. In going ’round the horn for all eight BEGOS Markets by their daily bars from one month ago-to-date, look notably at the ascending grey trendline for precious metal Gold. Look as well at the ascending grey trendline for industrial metal Copper. And yet almost impossibly, the same for Silver is descending. But here’s the good news: rare as ’tis, this phenomena has occurred (on a mutually-exclusive basis) six times since the beginning of 2020. And each time hence Silver has within a matter of weeks settled at minimum three full points higher. So from the yellow and red metals to the white metal, there’s a tradable gift on a Silver platter. Note too that Silver’s baby blue dots indicative of trend consistency have just kinked up:


Next, specific to the last fortnight, here we’ve the Market Profiles for Gold on the left and Silver on the right, their nearby trading supports as noted, (with a little resistance up there for Gold at 1832):


And it being month-end, we can’t quite wrap it without bringing up Gold’s Structure by the monthly bars. With respect to that mentioned earlier, the rightmost bar shows us just how comparatively narrow was Gold’s July … ahead of what we anticipate shall be a more robust, indeed august, August:


To close, we have these three observations:

  • From the ever-popular “They’re Just Figuring This Out Now? Dept”: Bloomy reported this past week that “Oil Rebounds After Industry Report Shows Shrinking U.S. Supplies”. Given the perfunctory shutdown of otherwise potential U.S. Oil transport facilities in the changeover of the StateSide Administration this past January, ought we be surprised? (See too, in leading the aforeshown BEGOS Markets Standings, Oil +52.4% year-to-date … Thanks Joe).
  • Next week brings the oft-dubbed “Mother of All Numbers Day” (Friday, 06 August) when the Department of Labor Statistics reports Non-Farm Payrolls for July, the expectation being for a 9% gain over those for June, with the Unemployment Rate dropping from 5.9% to 5.6%. That’s nice, ‘cept the ADP Employment Change (Wednesday, 04 August) for July is estimated to be a 6% loss. But who’s counting, right?
  • And last Wednesday, Dow Jones “Red-Hot Economy” Newswires noted in spite of vaccinations, COVID continues to emanate from one surge to the next, but that “…a host of adaptations by governments and businesses have also helped limit economic damage…” Translated to layman’s terms, such “adaptations” are currency debasement and enterprise restriction. Reason enough to follow the stars for Gold’s august August that also shines for Silver!




S&P Hauls, Gold Stalls, Silver Falls


Indeed, the function of stock market value has also stopped. Our honestly-calculated, cap-weighted “live” price/earnings ratio of the S&P 500 is now 56.3x; (we’ve as well seen 46.9x depending upon what “they’re” not counting). But the point is: the S&P 500’s average p/e since its inception back in 1957 is 19.2x. And given that the p/e always reverts to its mean, a two-thirds price “correction” is obviously in the offing. (Whether ’tis a lingering “Gentleman’s Crash” or simply three consecutive “limit-suspended” sessions of -900 S&P points/day — equivalent in toto to some -21,000 “Dow” points — remains to be seen).

“But can you really say ‘obviously’ there, mmb?”

Absolutely, Squire. 19 years ago the S&P concluded a correction of more than 50%. Then seven years later it again finished another correction of more than 50%. So for this next one, what’s an additional dozen or so percentage points totaling some 67%, eh?

The most interesting bit shall be how “they” couch the crash’s catalyst (the truth being lack of earnings). We ‘spect they’ll condemn a re-emergence of COVID-and-variants combined with the prior StateSide Administration’s having allowed for too much real economic improvement by enabling the private sector to manage more of its own earnings. Regardless: stock market negatives are as numerous as Gold positives. And you regular readers know them well. Thus without detailing them ad nausea, ’tis now merely a matter of flipping the sentiment switch:


So to Gold we go: And as we wrote for the precious metals a week ago: “…No, we don’t expect Gold to increase every week as it has done for the past four…” and that “…Silver [is] looking to run out of puff unless she can quickly get off her duff…”

And so it came to pass amidst the S&P‘s haul that Gold’s stall found its price settle out the week yesterday (Friday) at 1802 for a mild five-day loss of 0.6%. But Silver’s fall put her settle at 25.24 for a 1.8% loss, a sufficient-enough deviation to further the Gold/Silver ratio back to its highest level (72.4x mid-week) since January. The good news there for Silver is that Copper on Friday took off like a rocket, +2.7% (its largest one-day gain since 27 May): this ought allow the white metal to industrially catch up to the red metal and preciously catch up to the yellow metal. “No excuses now, Sister Silver!”

‘Course as we oft state with respect to “change being an illusion whereas price is the truth”, were Gold rightly today at the above Scoreboard valuation of 3872, applying the millennium-to-date average Gold/Silver ratio of 66.3x would place Silver now at 58.40. (Then sprinkle that with a little miners’ leverage…)

Thus with the S&P horribly overdue to dive — and Gold and Silver amazingly due to thrive — if you own the metals you’ll be glad (versus owning the S&P leaving you sad and your having to go back to work, lad).

As for the recent “Dollar strength” said to be stalling Gold’s show, it hasn’t really, you know:


Next in turning to Gold’s weekly bars from one year ago-to-date, the label stating “2021 Forecast High: 2401” clearly is way up there. Without restating all of the historical examples of Gold’s having traveled that far within the like balance of time left for this year, price thus remains provenly capable of getting there, albeit ’tis going to take a bit of fundamental scare. For the present, hardly is Gold caving within the context of the present red-dotted parabolic Short trend. Moreover, with August on the horizon, that month has finished higher for Gold in eight of the past 11 years:


Now to some real switch-flipping material: the Economic Barometer. This past Monday, Dow Jones Newswires referred to the U.S. economy as “red-hot”. What do you think?

To be fair contextually, the “news” service went on to note that economists sense Q2 was the peak for the rate of post-COVID growth. To be sure, the Conference Board’s lagging report of Leading Indicators nearly halved in June to 0.7% from May’s 1.2% pace. However, ’twas reported as well that the COVID variant dubbed “Delta” shan’t “Dent Robust U.S. Recovery”.

But such is not the case on this side of the pond, with outside masque requirements here resuming today and restaurants again being limited to locals with health passes. (Cue W.C. Fields: “I went to Monte-Carlo, but it was closed.”) More broadly, the European Central Bank firmly is sticking to its negative rates policy. Is it any wonder the Bond’s price (below left) has been exploding and the Euro (below right) imploding?


So much for rising interest rates, (not). No surprise (right?) the S&P today at 4412 is an all-time closing high. (At its aforementioned p/e average, ‘twould instead be 1505 today, just in case you’re scoring — indeed preparing — at home).

‘Course, ’tis high-times we anticipate for Gold in spite of this recent week’s breather. That noted, Gold’s now-declining baby blue dots below on the left are some cause for near-term concern, although we see structural support from 1796-1750. Still on the right in the 10-day Market Profile, there is some overhead trading resistance per the price labels:


Certainly Silver’s picture has been a bit weaker than that for Gold, again the noted Gold/Silver ratio having in turn risen. Below is her like two-panel graphic. But if Copper continues to firm and the Econ Baro continues to infirm, higher Silver we shall soon affirm:


So there we are for this week’s missive. Yet what does next week bring? 13 incoming metrics for the Econ Baro, plus the next policy statement from the Federal Open Market Committee. We again ask: shall there finally be dissent amongst the ranks? But wait, there’s more: seems most of the cash in the StateSide government’s terribly crippled piggy bank has been shaken out … and no more borrowing is allowed effective a week Sunday (01 August)! Uh-oh… We opened with a query/quip; let’s end with our most basic one: “Got Gold???”




Stocks Cavort; Gold Goes Short


We’re just askin’… After all, by any and all historically tried-‘n-true measures — be they fundamental or technical — none of ’em matter anymore, let alone are indicatively useful.

And just in case you’re scoring at home, the “20% same-day sell-off limit” means the S&P 500 can drop some 900 points (and “The Dow” some 7000 points) in a single session. Moreover: if (i.e. when) we get a 50% correction, by present earnings, the S&P still shall be overvalued. Do the math.

Yet the “herd mentality” maintains that the post-COVID economy is “Go-Go-Go!” But as you regular readers already know.

We read this past week that “…U.S. businesses are pouring money into equipment and technology…” –[DJNewswires]. Further, Stateside President Biden just lauded the 46% June growth in Payrolls.

“But what did his staff not tell him, mmb…”

Well Squire, let’s just say they didn’t convey that the Unemployment Rate ticked up, nor that the ADP measure of jobs fell 22%, nor that the Chicago Purchasing Managers Index tanked from 75 to 66 (its worst drop since “hello” April a year ago), nor that May’s Construction Spending actually shrank. “You go, bro Joe!”


  • Jumping on the bandwagon that the Federal Reserve be obliged to raise rates by the end of next year is the International Monetary Fund itself;
  • The Congressional Budget Office targets the Federal Deficit to be $3 trillion this year (’twas $1 trillion just two years ago);
  • 130 nations have now “signed on” to having a global minimum tax on corporations;
  • Taxes are to rise as well on personal income and capital gains;
  • And the cherry on top from the class-envy-spreading FinMedia? Those benefitting the most during COVID are “The Rich”.

Ready for (more) civil unrest? Ready for stagflation? Ready for the greatest global financial train-wreck in history? Got Gold?

As for Gold goes Short, (which isn’t really a surprise per our recent missives), by the following graphic of price’s weekly bars from a year ago-to-date, the parabolic trend has so flipped per the rightmost fresh red dot:


So what’s going on? And what of our forecast high for this year of 2401? Be it little reaction to Basel III, the Dollar having an up spree, or bits**t still posing as a currency, common sense interest in Gold remains wee. Nonetheless, we’re anticipating that this new Short trend shall be short-lived.

Yet here at mid-year with Gold settling yesterday (Friday) at 1788, can price still achieve 2401 by year’s end? Such previous 34.3% price increases occurred within six-months originating in 1976, 1978, 1979, 1980, 1982, 2005, 2007 and 2011. It can go quickly. (Recall, too, our premise that “Shorting Gold is a bad idea”, notably per our Market Profiles later shown in this missive).

Still year-to-date, Gold along with the Bond now finds itself down in the cellar of the BEGOS Markets as we view their mid-year (plus two trading days) standings. And isn’t it curious how the “economically-driven” components (Oil, Copper and the S&P) stand at present atop the podium — but as we just saw — with the Econ Baro in decline?

Even more curious is the Dollar: as measured by its Index, ’tis presently 92.250. That is the same level ’twas better than three years ago on 14 May 2018 when the US Money Supply (“M2”) was 32% smaller than ’tis today! (Tick… tick… tick…)

As for the BEGOS Markets’ respective linear regression trends across the past 21 trading days (one month), here we go ’round the horn with the whole bunch including their baby blue dots of trend consistency, throughout which the Bond is actually getting a bid, (hint hint, nudge nudge, elbow elbow…):


Specific to the precious metals equities, prices are not that far afield from where they were on this date a year ago, the exception being the Global X Silver Miners exchange-traded fund (SIL) +19%; (recall a year ago at this time the Gold/Silver ratio was 97.9x vs. today’s more historically in-line 67.2x). For the rest of the group we’ve Franco-Nevada (FNV) +8%, Newmont (NEM) +4%, Gold itself “unch”, Pan American Silver (PAAS) -1%, Agnico Eagle Mines (AEM) -2%, and the VanEck Vectors Gold Miners exchange-traded fund (GDX) -5%:


As to near-term pricing, here we’ve our two-panel display of the 10-day Market Profiles for Gold on the left and Silver on the right. As earlier inferred, despite Gold’s weekly parabolic trend having just flipped to Short, its Profile appears price-supportive from 1783 down to 1775. Similarly, Sister Silver looks safe above 26.00:


Finally, here is Gold’s Structure by the monthly bars from 2010-to-date. With Gold grabbing for grip inside of The Northern Front, these recent months can be construed as price consolidation ahead of said common sense buying; (do urge your sovereign bank to get with the program):


We started with the S&P; let’s conclude with same. Its inane rise of insanity finds a great colleague here joking with us about “S&P 5000 by year-end!” Obviously we don’t believe that a wit. BUT: linearly regressing the S&P’s COVID closing low level of 2237 on 23 March 2020 through today (4352) and then extrapolating that trend, the mighty Index would settle on 10 January 2022 at 5001. (And that — given the present unsupportive level of earnings — would put the P/E ratio at 65.9x). We cannot ask this enough: Got Gold???




Gold Finds Footing; FedSpeak Stewing


…when (cue FedSpeak) up popped St. Louis FedPrez James “Bullish” Bullard stating inflation is more than they’d just expected, such that a rate hike may come next year. Then chiming in with same came Atlanta FedPrez Raphael “Ready to Raise” Bostic. At the same time, Minneapolis FedPrez Neel “Keep Cash a-Comin'” Kashkari says they can slide without a rate rise beyond 2023. (Is that deflationary-depression-speak?) Too, New York FedPrez John “It’s All Good” Williams still leans to keeping the spigots open. Stewing away are the FedPrez!

Still, diplomatically maintaining equilibrium is Federal Reserve Chairman Jerome “Please ‘Em All” Powell pointing out to Congress that whilst the economy has shown “sustained improvement”, it nonetheless has “a long way to go”. (See further down our Econ Baro).

‘Course going down Mexico-way, they’re not waiting another day, Banxico boosting their lending rate by 0.25% (to 4.25%), their first increase in two years.

But the week’s real kicker was TreaSec Janet “Old Yeller” Yellen stating with hat-in-hand to Congress that the USA defaulting on its DEBT would be “unthinkable”; (that really would wreck stock markets right ’round the world). Nothing like issuing DEBT in perpetuity, eh? “Got Bonds?” We hope not. “Got Gold?” We hope so.

And indeed with all the FedSpeak and weaker economic data throughout the week, Gold — the recent decline for which was well overdone — finally found some footing, albeit narrowly so. Gold’s “expected weekly trading range” for that just past was 57 points: but only a range of 32 points actually was traded, second narrowest year-to-date. Moreover as we go to Gold’s weekly bars from a year ago-to-date, the present parabolic Long trend is still barely in place, price needing to stay above 1764 in the new week to avoid such trend flipping to Short. But the broad trend as measured by the diagonal dashed line has rotated a tad more negatively:


And comparatively across the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P) from one month ago-to-date, Gold (-6.5%) is the weakest of the bunch, whereas Oil (+10.4%) is firmest:


As a further reminder, Gold would like to see the Fed get on with raising its Funds rate, for as history shows, the yellow metal can do very well when Fed Funds rise from nothing as again we reprise this chart from the three-year 2004-2006 stint:


So with the Fed now stewing in a bit of a pie-fight as to when to raise rates and engage in paper taper, let alone agree on the state of the Stateside economy, we understand it quite clearly via the Economic Barometer, which looks to be commencing a fresh decline:


Indeed from this past week’s rash of incoming metrics, only May’s Durable Orders showed any improvement, and just mildly at that. Otherwise, the month’s Home Sales (both Existing and New) missed their April levels, Personal Income remained negative with Spending flat, and the Fed’s favoured gauge of inflation growth — the Core Personal Consumption Expenditures Index — came in slower than April and milder than anticipated. Again as we’ve said: the expected economic boom “has already happened.” Let’s see what next week’s 13 data items do to the Baro.

As for the S&P 500 — which no longer goes down — the 4300 level is within Monday’s “expected daily trading range”. And perhaps 5000 before year-end? Why not. Our “live” price/earnings ratio is a mere 56.6x. Do you pay $56 for something that earns $1? Of course you do: all day long! Making money has never been easier. (One wonders if those airhead FinMediaTV networks could be litigated for “financial libel”). Again: “Got Gold?”

We do here on the left in the following two-panel graphic of the precious metals’ daily pricing from three months ago-to-date, Gold’s “Baby Blues” of linear regression trend consistency careening down to their -80% axis. But upon them curling up from that level, ’twill be an early indication of the trend turning positive. For Silver on the right the assessment is the same:


Now for their respective 10-day Market Profiles, you can readily see the “footing” to which we allude in this week’s title. For Gold (below left) the key hold area is right here in the current 1783-1778 zone, whilst for Sister Silver (below right) ’tis between 26.25 and 26.00:


To wrap, in that we can’t get through an edition of The Gold Update without bemoaning the S&P’s horrendous overvaluation which we above cited, here’s a plus (ha!) and a minus toward it all ultimately unraveling.

The Plus: According to Fed stress tests, shareholders can jump for joy as the banks in which they invest can tolerate some $500bn of loan losses. So bring on the share buybacks! “We don’t need no margin for error!”

The Minus: The in-thing to do these days if you’re a publicly-traded company with no earnings, lots of debt and no competitive edge is to sell more stock. ‘Tis basically accepted now that folks will blindly buy your shares. “We’re stuck on stooopid and don’t even know it!”

‘Course, you shan’t ever be stuck — royal right or otherwise — given you’ve got Gold!



Gold Drops Exceedingly; Fed Ducks Reality



Having settled the week exceedingly down 6.2% at 1764, Gold is now priced by the market at but 46% of its currency debasement value (as measured by the StateSide “M2” money supply) of 3870, even as adjusted for the increase in the supply of Gold (which today is 201,480 tonnes). Neither is Gold a discarded relic, nor shall it ever be supplanted by cryptocrap. Gold remains humankind’s sole de facto true currency as so shall it be even after we’re not around anymore.


Its Index (by descending weight = the €uro, ¥en, Sterling, CanDollar, SweKrona and SwissFranc) gained 2.0% for the week, which of the 1,068 weeks millennium-to-date ranks 44th best (in the 96th percentile). Contextually, ’twas the Dollar’s firmest up stint since a series of weeks during the March 2020 depths of COVID, prior to which was the +2.3% week ending 14 November 2016. But as a valued member of our Investors Roundtable would say: “For the moment, the Dollar is leading the Ugly Dog Contest.” Shan’t last; it never does.

Gold and Dollar

Long-time readers of The Gold Update know that Gold provenly plays no currency favourites. As herein referred to a week ago, in 2014 on 04 September, Gold year-to-date was +4.7% and the Dollar +4.4% … “How can that be?” … Just because Gold tends to be priced in Dollars doesn’t mean squat as to how the Doggie Dollar itself is priced. Cue Fleetwood Mac from back in ’77: “You can go your own way…”And clearly for Gold, ’tis a long way up to go, the Dollar be damned.

The S&P

The mighty S&P 500 just lost 2.1% of its value in four days. Millennium-to-date that at best ranks as “noise”; ’tis not even in the bottom 10th percentile of four-day price changes. The “live” price/earnings ratio is at this writing an outrageously ghastly 53.5x, the yield a puny 1.359%, and the risk of ownership 100%. As we penned to our Investors Roundtable on Thursday: “My stock market fear has morphed into sheer terror. I used to take The Rud’s “50% correction” with a grain of salt. That now actually may be modest. ‘Tis merely about “The When”.” The stock market remains a losing game, (which is why most people on Wall $treet never make any real money).

The Fed

Here’s a simple equation: Late Fed + Dopey Media = Comprehensive Misconception. A time-honoured truth specific to the Federal Reverse is that ’tis “always behind the curve”. However, we wonder if this time the Fed in negotiating the curve has instead gone beyond the edge of adhesion and off the cliff. This past Wednesday, the Federal Open Market Committee unanimously voted to neither taper asset purchases, let alone raise its Bank’s rate, toward maintaining the ongoing 0.00%-0.25% FedFunds target range.

But more incredulously (this from the “Defying Common Sense Dept.”) the FOMC “penciled in” to raise interest rates by late 2023, (ahead of that initially considered). Accordingly, the fawning FinMedia — specifically the FinTimes — printed: “The Fed nailed it.” Nailed what? That they see two FedFunds rate increases the by end of 2023? How about by the end of this year? The Fed hasn’t nailed anything: rather, in ducking reality, ’tis The Fed that stands to get nailed. Are their two portended rate increases going to thus be 10% apiece? Just to catch up to inflation (er, uh, stagflation), you understand; (see 1976-1980). Honest to Pete and back again: if one still is in stocks and not in Gold, there’s not much more we can do. Facts indeed.

As for you valued readers who understand and take the Gold Story seriously, the following view of the weekly bars from a year ago-to-date at present doesn’t look that great. Or does it actually a buying opportunity make? Recall the late great Richard Russell: “There’s never a bad time to buy Gold”:


That noted, the parabolic Long trend certainly appears poised to flip Short in the ensuing week, price having completely hoovered our 1846-1808 structural support zone. And yes, our forecast high for this year of 2401 may be in jeopardy. Or (the French word for Gold): may the forecast in hindsight by year-end appear to have been modest? Recall 1977, 1978, 1979, 1980, 1982, 1983, 2006 and 2008. On verra, mes amis…

As for the near-term, Gold today at 1764 is within a structural support area of 1799-1755; should that bust, the next such area (with some wee overlap) is 1760-1677 (let’s not even go there…)

Rather, let’s go have a look at the Economic Barometer. It does have the beginning of that good-for-Gold “Game Over” look:


We read this past week that non-financial aggregate StateSide debt is now nearly one-half the size of the U.S. economy. (Again, let’s not even go there…) And as to our ongoing notion that the post-COVID economic boom “has already happened” as folks abandon COVID-time activities and replace them with those more apropos of “normal” times, spending data now indicates that large item purchases are “out” … and that eating out is now “in”.

To be sure, whilst May’s Housing Starts, Industrial Production and Capital Utilization all improved, Building Permits slowed as did Retail Sales. And for June, the New York Empire State Index, Philly Fed Index, and National Association of Homebuilders Index all fell short of their May readings. Up with inflation, down with the Economic Barometer/S&P 500, and hello stagflation. (“Tick…tick…tick…”)

Meanwhile, on this side of the pond, ’tis said so much COVID-debt was taken on by companies, that “life-support lending” is in vogue toward combating insolvencies. This has of course (and notably post-Fed) knocked the €uro from the podium in the ongoing Ugly Dog Contest, the Zone’s currency taking its biggest three-week tumble since COVID really kicked in during April a year ago. (And for those of you scoring at home with that European vacation in mind, the €uro’s present 1.189 level looks to erode by our purview to 1.173, even to 1.161). “C’mon Mabel, we’re goin’ to Rome!”

Now two weeks back when we could “see” some Gold setback — even just seasonally let alone technically — we perhaps ought have entitled that piece (instead of “Gold’s June Swoon”) rather as “Gold’s June Doom”. Indeed since Gold’s recent 1913 high on 26 May, price today is -7.8%, about its net change year-to-date (-7.2%). And per the following graphic on the left, upon Gold’s “Baby Blues” cracking the +80% ice back on 07 June, ’twas surely the real commencement of this swoon.

Note that on the right in Gold’s Profile for the last fortnight there’s been scant trading volume through much of the mid-to-lower 1800s, which for the “All gaps get filled” fans is encouraging for Gold to rebound, (and which common sense of course says ’twill):


Silver’s like +80% ice broke even sooner, back on 25 May as we seen below left. Should she not hold price here, her next structural support area is a full Dollar’s range from 25.68 down to 24.68. Sister Silver’s Profile below right matches sufficiently well with that for Gold, the Gold/Silver ratio now 68.2x running just a tad above the millennium-to-date average of 66.3x:


Whew! After a week like that (our outlook/review thereto), we can only finish up with something even more cuckoo. In her testimony this past week before the Senate Finance Committee, former Fed Chair Janet “Old Yeller” Yellen in sellin’ the Biden Administration’s $6 trillion budget presented it as a step to resolving “climate change” and “inequality”. We can’t wait: all of us equally poor under clear skies. “Got Gold???”



Gold Goin’ Red Ahead of the Fed

As prior penned in “Gold’s June Swoon”, the technical and seasonal case was laid out for Gold to settle June “nearer to 1800” than to 1900. Thus far, that is the trend, albeit with 13 trading days remaining in June. And the Big One is this Wednesday (16 June) when the “FOMC-11” (Mmes Bowman, Brainard, Daly and Messrs Barkin, Bostic, Clarida, Evans, Powell, Quarles, Waller and Williams) vote to either maintain their Bank’s FedFunds target range at 0.00%-0.25% … else bump it up to 0.25%-0.50% … perhaps spiced with a bit of purchased paper taper.

This is the most important Federal Open Market Committee vote in better than a year (since 16 March 2020) when COVID convinced ’em to cut the rate down to the present target range. Further, Wednesday’s Policy Statement — should it incorporate a hike in the rate — is a key fundamental and uplifting case (given currency debasement otherwise being ignored) that can get Gold back onto a positive track into month’s end.

For as you regular readers know: Gold has proven to have done well when the short end of the yield curve actually rises; (recall the FedFunds rate and the price of Gold increasing together through the three-year stint from 2004-2006). Otherwise should the FOMC sit tight as they see, we ‘spect Gold’s “nearer to 1800” scenario shall be what we’ll see.

To be sure, the Fed now sits upon “A Delicate Balance”–[Marian McPartland, ’66]. In recent missives we’ve derogatorily referred to the Fed as being “scared s**tless” toward (finally) upsetting the outrageously overvalued stock market by merely increasing the cost of money. The last thing the Fed wants to do given the economy having recovered from COVID is to crash the now all-time high S&P 500 (4247), for which at this writing our “live” price/earnings ratio is 53.3x, with Bob Shiller’s non-cyclically-adjusted version not far behind at 45.1x.

Already for months, the yield on the riskfull S&P (now 1.375%) has trailed that of the riskless 10-Year U.S. Treasury Note (now 1.462%), let alone that of the 30-Year U.S. Treasury Bond (now 2.152%).

“But Gold itself has no yield, mmb…”

The perfect “leading statement” there, Squire. For if one defines “yield” as that rate of return to be realized upon Gold reaching up to our opening Scoreboard’s present valuation of 3861 (i.e. its “par value”), given price having actually settled yesterday (Friday) at 1880, that’s a 105.372% “yield”.

Indeed “To raise, or not to raise, [perchance to taper] that is the question: whether ’tis nobler in the mind to suffer the slings and arrows of outrageous debasement, or to take Gold against a sea of troubles, and by opposing, end them.” (Way to ad lib the Bard’s 1600 script there, Hamlet, back at a time when Gold was — as ’tis today — a currency).

To be sure, higher Dollar interest rates bring attraction to the Buck. And yet contra to conventional wisdom — given Gold plays no currency favourites — its price can rise right in stride with the so-called oxymoron “Dollar strength”, (recall for example their multi-month ascensions together in both 2010 and 2014).

Regardless of whether the FOMC votes to raise or not to raise or taper for a phase, we have to think this time ’round there shall be dissent amongst the ranks rather than the usual unanimous “voting for the monetary policy action were” … some may stand pat, some may vote taper, some may say hike. On verra.

Either way, here is the present state of Gold’s weekly bars from one year ago-to-date, the prior “outside week” having now been followed up with an “inside week”, (i.e. a “lower high” and “higher low”) as price continues red ahead of the Fed:

And for those of you thinking (perhaps skeptically) ahead, were Gold to settle June at, say 1800, might it still muster a 33% increase to reach our forecast 2401 high by year-end? It did such six-month stints in 2006, 2008 and 2011. Sprinkle in too the stagflation and stand by…

Meanwhile we continue to wonder how long ’twill be before the COVID-recovered economy next keels over. Confiscatory tax increases provenly are the killer regardless of how “compassionately” they’re couched. Most folks figure that out upon being laid off. The StateSide the capital gains tax is going up as is tax on corporations. And now, let’s add on to that a “G-7” global minimum tax. “Sorry, Chuck, we know you’re set for retirement and a pension next year, but we now have to instead divert that dough into some foreign thing.” Have a great day.

As comprehensively demonstrated throughout history, such tax increases are ultimately paid for by the elimination of jobs, without which the consumer still has to pay their tax bill on whatever they nonetheless earned. “Here we go again!” And here’s the Economic Barometer, for which 16 incoming metrics are due in the week ahead, not to mention the Fed (!):

Elsewhere, given the economically-weaker EuroZone, the European Central Bank is maintaining their stimulus policy, even as they’re a bit more upbeat in their outlook. Then over in China, ’tis said their producer prices are inflating more than they have in a dozen years. (And is COVID coming back in southern China? “Uhh boy…”)

Now let’s turn to the precious metals specifically from three months ago-to-date by their daily bars for Gold on the left and for Silver on the right. Notably for the yellow metal, its baby blue dots continue to cascade as the current price uptrend further loses its consistency, whereas price for the white metal is attempting to defy same. But as you regular readers well know, ’tis the “Baby Blues” which generally will out:

Then in looking at their 10-day Market Profiles, Gold (below left) has succumbed below its key 1895 trading resistor, whilst Silver (below right) is treading water above its 27.90 supporter. “Sink or swim, Sister Silver?”:

And thus here is how Gold stacks up at present:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3861
Gold’s All-Time Intra-Day High: 2089 (07 August 2020)
Gold’s All-Time Closing High: 2075 (06 August 2020)
2021’s High: 1963 (06 January)
The Gateway to 2000: 1900+
Trading Resistance: 1895 / 1902 / 1908
10-Session “volume-weighted” average price magnet: 1894
Gold Currently: 1880, (expected daily trading range [“EDTR”]: 25 points)
Trading Support: 1873
10-Session directional range: down to 1856 (from 1919) = -63 points or -3.3%
The 300-Day Moving Average: 1829 and rising
The Final Frontier: 1800-1900
The Northern Front: 1800-1750
The Weekly Parabolic Price to flip Short: 1750
On Maneuvers: 1750-1579
2021’s Low: 1673 (08 March)
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

Toward closing, we’re more stock market wary than ever. You already know of the beyond-belief level of the S&P’s P/E, and that its MoneyFlow is hardly supportive of the Index’s unsustainably high level in extremely thin trading conditions, (which for you WestPalmBeachers down there is like mowing your lawn pretending there’s gasoline in the empty tank). Indeed from our “You Won’t Find This Anywhere Else Dept.” today you personally (in a trading vacuum) can move the S&P 500 Index one full point with just 63% of the amount of money needed to so do just back on 08 April.

And if that doesn’t make the point of the market being thin, try this statistic: yesterday’s (11 June) total share volume traded for all of the S&P 500 constituents was 1.7 billion shares. The volume one year earlier to the day was 4.0 billion shares, well double that of today. Then on top of it all, this display popped up during our end-of-day data run on Friday night, (the “Spoo” is the S&P 500 futures contract):

And finally from the “Last to Figure It Out Dept.” this past week Deutsche Bank expressed concern over inflation as a global “time bomb”. (Nothing like realizing the obvious a year after everyone else). At least you realize that having some Gold is obvious!

Cheers! (And mind that Fed!)

The Gold Update by Mark Mead Baillie — 604th Edition — Monte-Carlo —


For a look at all of today’s economic events, check out our economic calendar.

Gold’s June Swoon


“Well that’s a pretty loosey-goosey statement there, mmb…”

Admittedly ’tis, Squire. Akin to “The sun shall rise at month’s end somewhere between midnight and noon.” But the point is: we see Gold entering a bit of a June swoon, however not sufficiently negative to nix our “2401 in 2021” tune.

Gold has had a great run of late, encompassing a 14.7% rise across just 60 trading days (from 1673 on 08 March to 1919 on 01 June) which is an annualized pace of 61.8% (yes, the “Golden Ratio” rate!!) As well, price has returned to where it started the year ’round the Big Round Number of 1900, which by some analysts and algorithms is cause for pause. And as we’ll see deeper down in this missive, Gold’s “linear regression uptrend” is just now beginning to run out of puff. Moreover, June historically is at best a fairly namby-pamby month for our yellow metal.

Therefore: loosey-goosey + namby-pamby = the following high-level executive assessment on June Gold:

Millennium-to-date, Gold has endured (for those of you who properly know how to count) 20 full months of June: 11 of those have resulted in negative net changes and 9 of those positively so. Gold’s worst June therein was -12.2% in 2013 and the best was +8.7% in 2016. Apply that range from 2021’s May settle at 1904 and we’d likely find Gold at the end of this June somewhere between 1672 and 2070.

Refining that too-wide zone by assessing Gold’s recent pricing structure and the low-to-mid 1800s seem a reasonable area in which to settle June. Too, the Junes of both 2019 and 2020 were positive … but across the past 46 years, Gold has never recorded three consecutive positive Junes.

‘Course, records are made to be broken and we hope we’re wrong such that Gold completes June above 2000 … but as the numbers don’t lie, ’tis those we go by.

Now not to get too deep into the numerical weeds as we proceed to Gold’s weekly bars from one year ago-to-date, but the rightmost bar recorded both a “higher high” and a “lower low” than in the prior week. Traders refer to that as an “outside week” such that perhaps a trend change (presently up) is nigh. So we checked and found that across all the parabolic Long trends since 2019, following an “outside week” Gold’s price was on average 52 points lower within the ensuing four weeks: which applied to this instance with Gold having settled yesterday (Friday) at 1894 would find price by month’s end having traded at 1842. That’s supports our “nearer to 1800” notion (Again we hope we’re wrong). Still, the slope of the declining dashed trendline in the below graphic is rotating a bit more negatively, the level at its rightmost tip being 1806:


‘Course more broadly, Gold by its daily closes for nearly 10 years-to-date looks great, even given the overhead structural resistance to which we’ve regularly pointed in recent missives. But upon a close above the All-Time High of 2089 (07 August 2020), Gold can be off like a rocket toward our 2401 upper line. Indeed from a June swoon to then the moon would be lovely:


Now to the Economic Barometer — the quote at its upper left courtesy of Dow Jones Newswires (02 June) — with respect to which we repeat that penned in the 10 April 2021 of The Gold Update: “…we don’t see the economy post-COVID going upside gonzo nuts . It already has…”:


Rather, it looks fairly in context with like up bumps viewed in the Econ Baro since its inception back in 1998. Or to use the current lingo: “Nothing to see here…”

“But mmb, people are getting back out into areas that boost the economy…”

Exactly right, Squire, and in so doing, they’re abandoning the substitute economic impetus engaged during the COVID period. Remember: beyond the macro measure of the Gross Domestic Product, folks adjusted their economic activities such that the vast micro measures essentially kept right on going. People kept working, they kept eating and overwhelmingly they kept online ordering anything and everything. And to fill any gaps, they keep receiving dough from Uncle Joe. “Got Gold?”

To be sure, in a week dominated by various measures of employment, month-over-month, May’s numbers improved, albeit Hourly Earnings slowed (“Hey, isn’t inflation supposed to pay me more?”). Yes, but stagflation doesn’t. And did you see April’s growth in Construction Spending? ‘Twas but one-fifth the rate in March. And did you see April’s growth in Factory Orders? Or wait, sorry: instead they shrank 0.6% … (but don’t tell anybody).

As for the FedHeads, PhillyFedPrez Pat “The Hawk” Harker joined his mates Clarida and Kaplan in the lean toward reducing asset purchases. But then prescient as he oft is, NYFedPrez John “It’s All Good” Williams countered such talk of paring stimulus, indeed so speaking within a day of May’s Payrolls missing the expectation mark. Nice call, Johnny.

So upon the release of the “weak” jobs number, money on Friday poured across the board into all of the BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil and the S&P 500). For the Fed punch bowl looks to remain full, which in turn ought redound (dare we even mention this) to an all-time high in the new week for the S&P; (“It hasn’t crashed yet?”).

Even as our live price/earnings ratio remains above 50x? Even as President Biden proposes the leap in the capital gains tax to be retroactive? Even as his $6 trillion spending plans have a tax shortfall of $2.6 trillion? Hello Federal Reserve? Note to self: a June swoon notwithstanding, again, “Got Gold?”

Next to our proprietary analytics, first for Gold via this two-panel graphic of price’s daily bars and “Baby Blues” trend consistency on the left and 10-day Market Profile on the right. And clearly you can see our near-term June swoon concern, the blue dots — after ascending for the past three months in three beautiful waves — now are in cascade formation coming off the top. Thus as mentioned earlier for Gold’s recent pricing structure, the immediate support area looks to be 1846-1808. And by the Profile, sub-1873 would appear a drop quite sheer:


So second for Silver we’ve a similar, albeit more accelerative, picture. Her “Baby Blues” (at left) broke the key +80% level back on 25 May with price struggling about since that day. And by her Profile (at right), price settled smack on her most dominantly-traded level of the past fortnight at 27.90. How low might Sister Silver Go? We trust the 26s shall be the worst of her woe:


Thus Gold given our opening Scoreboard valuation today of 3853, we’ll close with this from the “Currency Debasement Dept.” This past week during a tennis hit with a fine acquaintance of ours whose career path was through Zambia, the following tale was recounted with respect to the nation’s currency, the Kwacha.

As the yarn unwinds, it seems that back in ’77 during the early stages of the Carter Administration, then Zambian President Kenneth “KK” Kaunda was touring the U.S. and had the opportunity to attend with President Carter the Cape Canaveral launch of a Delta rocket. Carter proudly remarked to Kaunda, “That rocket cost us $35 million!” Kaunda then turned to an aide and asked “How many Kwacha is that?” The aide punched out the numbers on a calculator and replied: “All of them, Sir.”

Which again begs our question: “Got Gold?”


Gold Great? Or Sedate?


‘Twas just 59 trading days ago on 08 March that Gold traded down to the year’s low of 1673. But since then, yesterday’s (Friday’s) settle at 1904 marks a 231-point gain. Thus to again revisit our proportional math class from back in 7th grade:

“59 trading days is to 231 points as 150 trading days [remaining in this year] is to X points”

  • Therefore: 231 x 150 ÷ 59 = 587 points.

Which added to Gold’s present level of 1904 would put Gold at 2491 come New Year’s Eve. Which exceeds our forecast high for this year of 2401 by 90 points. That’s pretty Gold Great, eh?

Now in turning to Gold’s weekly bars from a year ago-to-date, one may rightly say, “Well, all that straight line math makes for a good story, but…” given markets move in anything but a straight line. Further, the pure technician can readily point to all the previous price to-and-fro in our chart below to keep a lid on the show:


However, the fundamental realist need only cite the Dollar’s rampant debasement (its $20.5 trillion supply by “M2” +14.0% year-over-year), President Biden’s “plan” to increase spending by another $6 trillion (that’s 29.3% of the present money supply), stagflation on the come, and of course our opening Gold Scoreboard’s present valuation of 3844. All of which is inarguably supported by the 3Ds of Debasement, Debt and Derivatives. Gold Great indeed.

As for Gold Sedate let’s pause a moment for price perspective by looking at our standings for the BEGOS Markets thus far for 2021 with five full trading months in the books; (as you know, Monday being a StateSide holiday, its abbreviated trading session is to be accounted as part of 01 June).

And as we see in the table, Gold year-to-date is all but “unch” in having settled last year at 1902, just two points below today’s level of 1904. Not (yet) any stagflation bid there. Gold Sedate indeed. But with Oil and Copper dominating this year’s performances, their rise with the economy’s pending demise shall all but you surprise, (given you read The Gold Update):


“So the Economic Barometer is now sensing some stagflation, eh mmb?”

Squire, ’tis a bit startling that little if any mention is made of stagflation (yet) through most of the “rah-rah” media. “Oh the economic boom is coming!”, they say. “Oh we’ll get the money to turn the world green!”, they say. “Oh international taxation shall point the way!”, they say.

Ok. Looking at this past week’s incoming metrics for the Econ Baro, here’s what we say: Q1’s Gross Domestic Product Chain Deflator was revised upward: that’s inflation. April’s Core Personal Consumption Expenditures Index — the Federal Reserve’s favoured gauge of inflation — increased 75% over that from March to an annualized rate of +8.4%, quadruple the Fed’s target rate: say it again, that’s inflation.

The month’s Personal Spending practically dried up whilst Personal Income fell 13.1%. Growth in April’s New Home Sales markedly slowed and the month’s Pending Home Sales fell 4.4%. And Durable Orders fell 1.3%. As well, The Conference Board’s read on May’s Consumer Confidence fell. That’s shrinkage. Back to math class once again:

  • Inflation + Shrinkage = Stagflation

Oh and from the “Has The Market Crashed Yet? Dept.”, the “live” price/earnings ratio of the S&P 500 is now 52.5x (Bob Shiller pegs it at 44.7x): recall contextually from business school that 15x is “expensive” and over 20x is “stooopid”. And as we oft remind: mind the website’s MoneyFlow page, its quarterly measure for the S&P citing it as 277 points “high”, (which is modest given a 50% “correction” would still find the Index overvalued). And by the Baro, the suggested “massive top” for the S&P (red line) continues to broaden:


“But mmb, we’re still told that people have a lot of money to go into the market…”

A valid observation there, Squire. So if “it” is there, why isn’t “it” going into the market? The S&P one month ago (29 April) was 4211. Today ’tis essentially the same at 4204. And yet the monthly MoneyFlow (as regressed into S&P points) is 130 points lower. (You won’t see that on CNBS).

That’s a “stealth drain” of dough out of the S&P. Which throughout history we know leaves Joe Blow holding the bag when it all goes wrong. And yet, ’tis as if the entire equities investing community is a bloated fat ostrich with its head inextricably buried in quicksand along the banks of da Nile.

Then too on the FedSide, there are musings of slowing their stimuli as the past week’s FedSpeak found both Vice Chair Richard “Clearly” Clarida and Dallas FedPres Robert “Cap it” Kaplan leaning toward asset purchase reductions. The point is: if “it” isn’t really as plentiful as thought, and moreover “it” via the Fed isn’t being as sought, just make sure ’tis Gold that you’ve bought.

‘Course if you’d bought Gold at this time a year ago, you’re ahead of the game. Here is its percentage track from then-to-now along with those of these key metals equities, their performances being: Franco-Nevada (FNV) +6%, Gold itself +9%, Agnico Eagle Mines (AEM) +12%, both Pan American Silver (PAAS) and the VanEck Vectors Gold Miners exchange-traded fund (GDX) +15%, Newmont (NEM) +26%, and the Global X Silver Miners exchange-traded fund (SIL) +35%:


Next let’s assess the “Rising Tide of Inflation Lifts All Boats Dept.” In going ’round the horn for all eight components of the BEGOS Markets across their past 21 trading days (one month) we find every diagonal trendline as positive, albeit barely so for the Bond and Copper, (their baby blue dots of trend consistency being anything but). But which market shows the best trend consistency?

Gold, (which for you “r-squared” fans out there at present reads as 0.94: that’s pretty close to perfection). ‘Course for the contrarian, such shan’t last, and combined with Gold trading at the big round number of 1900 may be cause for some shoving about through here:


Now to our 10-day Market Profiles for Gold on the left and for Silver on the right. As denoted, the key trading support area for Gold near-term is the 1870’s whilst same for Sister Silver is the upper 27s:


So it being month-end means ’tis time once again for Gold’s broad structure graphic by the month from some 10 years ago-to-date. Several more “candles” like the rightmost one for May and our upper right 2401 forecast can come into play:


In fact the above graphic sums it all up quite well: for at the end of the day — and in this case the month — hardly is Gold sedate, indeed of late ’tis ever so great!

“Oh, yer lookin’ great there, baby…”




Gold in Top Gear


For on a closing points basis from Gold‘s low of 1683 this past 30 March, price in settling yesterday (Friday) at 1882 has since driven 199 points (+11.8%) higher across those 37 trading days. Apply that rate from your tachometer to your speedometer’s odometer and you’ll find it reads Gold 2713 at year-end. (‘Course hardly is Gold’s undulating circuit a straight-line dragstrip).

Still, like point-acceleration paces happened essentially twice in last year’s COVID-driven “fear-and-debasement” volatility, prior to which we must go all the way back to 2012 to find like points changes up through the gear box. Nevertheless, cue Monsieur Le Chiffre, [‘Casino Royale’, 1967]:

“…Mr. Bond, we aren’t playing for marbles…”

Indeed we are not, for Gold is now being played — and positively so — for real.

So purposeful across the past seven-plus weeks has been Gold’s gain that — even more impressively — ’tis been up and largely through the 1800s’ structural price resistance to which we’ve alluded in recent pieces. Were such pace to continue, Gold would reach our forecast high for this year of 2401 come 08 October. But as inferred, we give all due deference to the “Nothing Moves in a Straight Line Dept.”, albeit ’tis an intriguing mathematical point.

Intriguing as well is the entirety of the BEGOS Markets’ metals triumvirate leading the trading pack from one month (21 trading days) ago-to-date. In the following two-panel graphic at left we’ve the percentage tracks for robust Gold vs. the languishing S&P 500 (the latter in the throes of what traders may in hindsight refer to as a “massive top”). Then at right we’ve a table of those changes for all the BEGOS components plus a few other markets; (and that’s no “typo” at the bottom):


Meanwhile, Team Gold’s engineers are analyzing the overall picture on their monitors, at present displaying the following chart of the weekly bars from one year ago-to-date. The rightmost bar sports Gold’s second-best weekly gain of the year by both points and percentage as the blue dots of the fresh parabolic Long trend ascend. Obviously Gold needs fundamentally to “keep pushing” (a little F1 lingo there) up through the technical resistance structurally created during the decline from last year’s All-Time High of 2089:


“Well mmb, the metals really have their pedals to the metal, eh?”

A fine pun there, Squire, as they truly are flat throttle. So much so that they may have to pit for fresh tyres ahead of what next transpires. Key note: the average low-to-high points gain of Gold’s prior five such parabolic Long trends (extending back nearly three years) is 290 points. The low thus far in the current Long trend is 1766; to then add that “average” of 290 points brings us to the 2056 level, materially near the 2089 All-Time High such that it could be met/exceeded on this run. (“You hoid it here foist!”)

And yet as significantly undervalued as Gold is, there’s plenty of ongoing rationale for the aforementioned fundamental push as we turn to the Economic Barometer. Clearly it took a bit of a caving this past week as the Federal Reserve’s regional indicators for May of both the New York State Empire Index and Philadelphia Index weakened, as did the April readings of both Existing Home Sales and Housing Starts. Oh yes, the lagging indicator of The Conference Board’s Leading Economic Index improved, (but that was from back in April when we already saw the Baro on the rise). But now has it peaked? Have a peek:


Moreover from the “Money Grows on Trees Dept.”, 39 million StateSide households with kids are to begin receiving upwards of $250-$300 per month. “Hey Mabel! We got us a $3,000 raise for the year!” Just like that. (Don’t tell the kids). “Got Gold?”

Elsewhere, the EuroZone (depending on your FinMedia source) is bouncing back from recession, else it already has, or it hasn’t. Meanwhile in Asia, economic activity in China is characterized as “slowing”, whilst Japan’s economy for Q1 outright shrank.

All the foregoing in mind, we remind you as well of last week’s missive “Gold Works Whilst Stagflation Lurks” should you seek a refresher course there.

Refreshing too is our two-panel image of Gold’s daily bars from three months ago-to-date on the left and the 10-day Market Profile on the right. So positive are the two panels that we might have to withstand the contrarian Shorts exposing themselves for a bit, as is their wont. But at the end of the day, both the 1600s and 1700s may well be for Gold’s race car histoire:


Here’s the same setup for Silver (daily prices below left and Profile below right). Relative to Gold, Sister Silver by her Profile has come off a bit; but more importantly she’s been maintaining her historical pricing ratio with Gold (as shown earlier in the weekly bars graphic at 68.0x):


We’ll close it our here with these few observations on what narratives are deemed “important” rather than their focusing on the terrifically overvalued stock market (aka the “Great American Savings Account”):

  • We read from our own University of $poiled Children’s Marshall School of Business Professor Paul Adler that “Climate change presents a critical challenge to our capitalist system”; no mention there of the S&P 500 trading at double the value of its earning support, a critical challenge to the Great American Savings Account.
  • We read that “Cryptocurrency Has Yet to Make the World a Better Place”; no mention there of our quarterly measure of the S&P 500 MoneyFlow valuing the Index lower than currently ’tis, neither making the Great American Savings Account a better place.
  • We read via the FOMC’s April policy meeting minutes that “the Fed should be nimble as the economy recovers”; no mention there that the economy already has recovered (as you regular readers know), let alone any dire implication for the Great American Savings Account when it all goes wrong.

So don’t end up in the financial Armco with a shunt; stay in top Gear with Gold to be out front!



Gold Works Whilst Stagflation Lurks


Back on 21 November 2009, (with Edition No. 1 which was at the sole request of our great mate JGS), the price of Gold was 1151. Now 11+ years later, price settled yesterday (Friday) at 1844, an increase from then of 60% (and one by as much as 81% upon Gold reaching 2089 on 07 August of last year). Across that time span, the U.S. money supply (as measured by “M2”) has increased 145%.

Thus in that vacuum alone, Gold today “ought be” 2820 … and of course when honestly accounting across the past four decades, rightly incorporating therein the increase in the supply of Gold, we’ve more meaningfully the above Gold Scoreboard valuation right now as 3906.

In turn, that means Gold by such trending construct likely gives us a “valuation” by year-end of 4000.

For hardly is the Fed gonna play dead — did you see the “Biden Economic Boom” Retail Sales growth for April — oh wait, there wasn’t any … and upon Gold eventually catching up to “valuation” as is its historical wont, add in the overshoot and we’ll one day see Gold 5000 for real.

One wonders as well when we’ll one day see S&P 2000 for real. For those of you with children who are still taught arithmetic in school, they clearly can divide the S&P 500 (4174) by two, thus calculating it to be line with the today’s actual level of earnings (or lack thereof).

“Or earnings could instead double, mmb… and congrats on our 600th, man…”

And a thousand thanks to you, Sir Squire. Couldn’t have made it this far without you. As to the notion of earnings doubling, those for Q1 of this year are pretty much in place: 433 constituents of the S&P 500 have reported, of which 395 had income (not losses) in both this Q1 and in Q1 of a year ago. And their median earnings increase? …(wait for it)… 21.8%, even with climbing somewhat out of COVID. That ain’t gonna do it. We thus remain on vigilant watch for the “Look Ma! No Earnings!” crash. Coming soon to a portfolio near you. In fact, let’s reprise one of our favourite graphics, (the present “live” S&P price/earnings ratio therein boxed at 54.1x):


Gold is up. But as we penned a week ago: “…bear in mind (no pun intended) that the 1800s have been a congestive area for Gold…” Of the 45 technical tests we run on Gold each day — the best of which make it to our Market Rhythms page — 40 of them are signaling “Long”. However of the five signaling “Short”, four of those just so triggered in the past two trading days (the 8 and 6-hour MACDs, plus the 6 and 4-hour Moneyflows … just in case you’re scoring at home). And more broadly beyond all of those studies, we can’t ignore that Gold’s dashed regression trend line has recently rotated to negative across the weekly bars as shown here:


But at least the weekly parabolic trend is back to Long and we’re maintaining our forecast Gold high for this year at 2401. To be sure as the year unfolds, that price becomes more and more of a stretch, indeed one of +30% with 160 trading days left in 2021. But similar Gold rises within that like timeframe occurred in 2006, 2008, 2009, 2011 and 2020. Moreover, as the aforementioned JGS remarked so many years ago: “One day we’ll wake up and Gold will be 1,000 points higher than where it closed the prior day.” (Contextual example: see January 1980). Just keepin’ the faith, babe.

We’re keepin’ the Econ Baro as well. And by that, how do we know we’re in the throes of a “throwing money at everything” mania? The Economic Barometer through its first two decades was a leader of stock market direction as measured by the S&P 500. But over the last year, such observance has become somewhat dysfunctional. This is because “the S&P never goes down anymore” (so to speak) despite the material ebb and flow of the Econ Baro.

And said “mania” is of course all around us: there’s the S&P trading at double its earnings valuation and ghastly unsupportive moneyflow, baseless cryptocrap hysteria including delirium over something called “doggy coin”, plus spasming over “SPACs” (whatever that is). We’re living in the age of abstract “digital tulips”: acres of ’em! Why even look at the automobile industry: Ford trades at an earnings multiple of 11.6x, General Motors at 9.0x … but Tesla at 504.5x.

“Well mmb, gas-powered cars are going to be banned.”

Right, Squire. And the jumbo jet’ll go wheels up on solar power. (Or as a great StateSide trading colleague remarked upon returning from a trip to the Midwest: “The one thing you won’t see in South Dakota is a Prius.”)

In any event as we turn to the Econ Baro, we wonder: when does it all go wrong this time ’round? Or is it “different this time” as it always is before it all goes wrong? Got Gold?


‘Course, making the rounds of late within the financial in-crowd is the “I-Word” which we sense given the logical direction of both monetary and confiscatory fiscal policy shall morph into the “S-Word” (stagflation). Inflation is on the up-move: ’tis there in the Producer Price Index, the Consumer Price Index, the Pricing of Exports and Imports, and in the Federal Reserve’s favoured inflation gauge of the Personal Consumption Expenditures (Core) Index. And it all makes some sense with businesses beginning to ramp up as COVID transits (so they say) from pandemic status to seasonal annoyance. “Got yer jabs? No mask until October!” How cool is that?

Still, some FedFolks such as ViceChair Rich “Clearly” Clarida and FedGov Chris “Well…” Waller are not fully convinced about inflation picking up: rather, this is perhaps a mere “transitory” pickup. And again, given April’s Retail Sales not growing (indeed shrinking by the “core” reading), they may have a point.

Regardless, Gold in time of inflation and rising interest rates has (despite naysayers) rightly done quite well, the most glaring of examples being during the Carter Administration. Recall this bit from a couple of missives ago: “…Gold [on 02 November ’76] was priced at 125, the annualized rate of inflation was 5.7%, and the ‘prime’ lending rate was 6.50% … four years hence [on 04 November ’80] Gold was 660, inflation 11.3%, and ‘prime’ 15.50%….”

Further, you long-time readers of The Gold Update surely remember this “speaks-for-itself” graphic:


As for “The Now” in looking at the daily bars of the last three months-to-date for Gold on the left and for Silver on the right, both panels reveal price as appearing a bit toppy. This does make near-term technical sense given (as stated in last week’s piece) that the Gold 1800s have a somewhat congestive pricing history. Still, for the yellow metal the upper 1700s ought be safe support, as for the white metal should be the mid-26s:


Then here we’ve the 10-day Market Profiles for Gold (below left) and for Silver (below right). Gold has built up a good amount of trading volume in these 1800s, however there is that price gap lurking sub-1815 down to 1793. A like gap for Silver shows as 27.00 down to 26.50, although she did have the graciousness to settle for this 600th Edition of The Gold Update right on her most voluminous fortnight price of 27.50. Thank you Sister Silver!


To wrap, a milestone edition wouldn’t compete without this peek at:

The Gold Stack

Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3906
Gold’s All-Time Intra-Day High: 2089 (07 August 2020)
Gold’s All-Time Closing High: 2075 (06 August 2020)
2021’s High: 1963 (06 January)
The Gateway to 2000: 1900+
10-Session directional range: up to 1847 (from 1766) = +81 points or +4.6%
Trading Resistance: none by the Profile
Gold Currently: 1844, (expected daily trading range [“EDTR”]: 25 points)
Trading Support: 1838 / 1821 / 1815 / 1793 / 1783 / 1776
10-Session “volume-weighted” average price magnet: 1816
The 300-Day Moving Average: 1811 and rising
The Final Frontier: 1800-1900
The Northern Front: 1800-1750
On Maneuvers: 1750-1579
The Weekly Parabolic Price to flip Short: 1680
2021’s Low: 1673 (08 March)
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 we’ll pen No. 601 replete with the expected knowledge and fun. For Gold in our mind remains No. 1!




Gold Thanks the Fed and ‘Tis Full Speed Ahead!


At this writing a week ago, Gold “near-term” was confirming a negative turn across various tried-and-true technical studies. But there’s nothing like a little Federal Reserve concern over “stretched valuations” of assets to rapidly whirl price right back ’round to the upside. And in the process of sporting its best up week in half-a-year (26 weeks since that ending 06 November), Gold’s weekly parabolic trend flipped from Short to Long as we see here:


Moreover in going back to our 13 March missive entitled “Higher Gold from Here” (price then 1726), we’d penned this key paragraph, now oh so apropos:

“…We know, and you know, that Federal Reserve Chairman Powell, his Fed Presidents and FOMC all know, the stock market is horribly due for a massive blow. And the key unmentionable in the fertile minds of every one of them is exactly what Stephen Stills admitted to the masses at Woodstock pre-dawn on 18 August 1969: “We’re scared s**tless.” And the FedFolk cannot prevent it…”

And this past Thursday as stated by FedGov Lael “The Brain” Brainard on behalf of the Financial Stability Committee (great oxymoron): “The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.” (For you WestPalmBeachers down there, a “re-pricing event” is a stock market crash). That got Gold to 1800.

Then on Friday, StateSide Payrolls came in at “just” 266,000 versus the consensus for one million (a -73% consensus miss). That got Gold to 1844.

More alarming however was to then watch the stock market climb rather than nosedive!

“Well, mmb, that job weakness means the Fed’ll keep on printing…”

And ’tis a very curious point that, Squire. If the rampant stimulus (per the U.S. money supply alone by “M2” having increased $5.2 trillion — or +34% –since the beginning of 2020) was meant for keeping everyone afloat whilst everything was shut down, what was the point if instead the dough to a material extent ended up in the stock market? Further, the U.S. Treasury looks to increase its borrowings four-fold to pay for more stimulus! WHY?

Ask yourself this question: Would the S&P 500 (already well-overvalued at 3338 on 21 February 2020 which is the day prior to COVID first hitting the market hard) today be at 4233? By any which way you can conceivably measure, the answer is categorically “NO!” Had COVID not occurred and we place a trendline from the S&P’s closing low of 667 a-way back from 09 March 2009 to 21 February 2020 — and then extend that trendline to right now — the S&P “would be” 3239 today. Yer darn tootin’ “The Brain” & Co. are concerned about a “re-pricing event”! (We’ve been concerned about it for years). Here’s the scary graphic:


Ready for the S&P (4233) and Gold (1832) to swap prices? (We’ve been for years). Or as our fine colleague here says: “Just wait for the Fed to lose its AAA rating.”

Meanwhile, things are “better” because apparently inflation is greater. “Corporate America Rides Wave of Inflation to Record Profits” pens Bloomy’s Lu Wang. And recall this year’s Q1 Chain Deflator as double the norm? Mind the price of your “Happy Meal”.

Yet we nonetheless read that “millions” of folks remain unemployed. Why not, when you can stay at home and buy stocks all day long, eh? Life is good. Just look at the Economic Barometer:


And despite a horribly off-the-mark April Payrolls figure as reported by the Bureau of Labor Statistics, that provided by ADP bettered their March number, whilst that prior month’s Factory Orders swung from shrinkage to growth. But March’s Wholesale Inventories backed up and Consumer Credit slowed. Further, both the Manufacturing and Services readings for April declined as provided by the Institute for Supply Management. And as you regular readers know, hardly are we expecting the economy to boom given the creativity that essentially kept it going through the tough COVID slowing.

Further, looking toward the new week’s slate of incoming metrics, our sense is the Baro may be below where ’tis today come our next weekly missive.

Now to Gold through the eyes of our two-panel graphic with the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right. You’ll recall with Gold’s baby blue dots having fallen below their +80% axis, that in turn caused us to abandon our “near-term” call for 1800. But then came “The Brain”, and we thank her for that. However, bear in mind (no pun intended) that the 1800s have been a congestive area for Gold: thus the substance of this past week’s push stands to be put to the test through here:


Too, we’ve the same graphic set for Silver, her “Baby Blues” tiptoeing across their +80% axis (at left) with her trading supports clearly denoted in her Profile (at right). Note that the directional track of her daily bars closely matches that of Gold, meaning that Sister Silver clearly is adorned in her precious metal pinstripes (rather than her industrial metal jacket):


Finally from our “Old Saw Dept.” we simply point out that the stock market — stimulus aside — has nothing remaining upon which to stand. You saw above the extended trendline graphic for the S&P 500 were COVID not to have occurred. The “live” price/earnings ratio for the S&P is an impossibly high 61.1x and the Index’s rise notably is built but on froth. For the website’s S&P moneyflow says it all, whether by the week, the month or the quarter:


Do be careful.

Next week brings our 600th consecutive Saturday writing of The Gold Update. To celebrate? Get some Gold, mate!



Gold … and Jimmy Carter (Part Deux?)


“Well the week’s intra-day high of 1790 was pretty close, mmb…”

Very sporting of you there, Squire. However: we’ve been leaping and pom-pomming about now for better than a month toward Gold returning to 1800 and it hasn’t happened, even with the Triple Top setup for a pop per our prior missive. And arguably your noting 1790 having just traded, one might opt that ’tis a quadruple top.

But at the end of the day (in this case the week), Gold per yesterday’s (Friday’s) settle at 1769 reflects price having lost some of its shine. Moreover, a bevy of Gold technicals have just turned negative, although we just cannot conceive in any fundamental way too much of a material price decline.

Worse, the “in thing” this Spring is some compelling urge amongst analysts et alia to compare Gold with bits***t as a store of value! The very notion of that is sufficiently disgusting as to heave one’s cookies at such sacrilege! What are these people thinking?

“They’re not, mmb…”

Absolutely right, Squire. Such manias merely add to the many signs of a wholesale topping for horribly overvalued markets and assets. By which let’s segue to our title.

Remember ole James Earl Carter Jr.? We do. The night he was elected U.S. President back in ’76, my roommate at The University of Spoiled Children (U$C) said “This can’t be good…”, straightaway grabbed Grandpa Hugh Baillie’s sterling silver mixer and filled it with crushed ice, Tanqueray and a splash of Noilly Prat.

Gold that day (02 November ’76) was priced at 125, the annualized rate of inflation was 5.7%, and the “prime” lending rate was 6.50%. Come Election Day four years hence (04 November ’80) Gold was 660, inflation 11.3%, and “prime” 15.50%.

We mention this as, upon learning the context of President Joe “Nikita” Biden’s address this past Wednesday night, we thought: “Here we go again…”

For you know, and we know, and everyone with a brain from Bangor, Maine to Honolulu and right ’round the globe knows that “greater government investment” is akin to that in pyrite (aka “fool’s gold”); but its stagflationary ramifications bode well for real Gold, (as is made obvious in the preceding paragraph). “Pass the peanuts and Billy Beer” and let the long, sorry sloth begin.

And we can start with Thursday’s release of Q1 Gross Domestic Product: +6.4% “Oh, Yes!” Uh, but wait: the Chain Deflator was +4.1% “Oh, nooo…” That’s its largest reading since Q1 of 2007, a year after which it all went wrong, albeit due to massive overextension of unrepayable credit. And how about yesterday’s report for March’s Core Personal Consumption Expenditures Index: ’tis the Federal Reserve’s favoured read on inflation, and at +0.4% for the month, that annualized reading of +4.8% is more than double the Fed’s target of +2.0%. But such inflation is “transitory” says the FedHead. On verra…

What we do know is — at least by the below graphic of the BEGOS Markets from one month ago-to-date — one might deduce “the rising tide of inflation is lifting all boats”. Every grey trendline is firmly up. BUT: look at Gold’s baby blue dots of linear regression trend consistency: they’ve just slipped sub-80% which infers lower prices near-term, (thus generating the word “SELL”). Yet as noted, we don’t see too much downside given the structural support zone of 1759-1723. Mind Silver as well, for her “Baby Blues” have begun also to slip:


As for the BEGOS Markets Standings year-to-date, every component is in the same position as ’twas at March’s end. Of particular interest therein is Copper. You website followers out there know that for each subsequent trading day is posted a “guesstimate” of the “high if an up day” or “low if a down day”. For Copper (as is normal for all the components), a “low if a down day” typically is achieved once per week in prices’ normal ebb and flow. However: Copper has not touched its “low if a down day” for 27 consecutive trading days: that’s akin to falling off the end of the Bell Curve. Which means we’re expecting an imminent falling off of the Copper price. (“And as goes Copper…”). Nuff said. Here are the Standings:


Now to another Gold technical negative as we turn to the weekly bars from one year ago-to-date: the diagonal dashed trendline has noticeably rotated to negative for the first time in over two years (since the week ending 23 March 2019). Further, in price not near-term achieving at least 1800, the parabolic trend remains Short, although the reduced flip price to 1808 is still within the expected weekly trading range of 55 points from the present 1769 level. That noted however, Gold’s parabolic trend on its daily bars just confirmed flipping from Long to Short per Friday’s close, again suggesting a reasonable test of the 1759-1723 structural support zone:


And it being month-end, let’s also go year-over-year with the percentage tracks for Gold and the high-level metals equities. Note that ’tis the two Silver representatives that have out-paced the Golds. From top-to-bottom we’ve Pan American Silver (PAAS) +50%, the Global X Silver Miners exchange-traded fund (SIL) +34%, then falling off to the VanEck Vectors Gold Miners exchange-traded fund (GDX) +7%, Agnico Eagle Mines (AEM) +6%, both Franco-Nevada (FNV) and Newmont (NEM) +5%, and Gold itself +4%. Of note: Q1 Earnings Season has thus far been very metals-favorable, NEM’s bottom line nearly double what was earned year ago, and that for AEM nearly triple. Here’s the graphic:


Now as we turn to the Economic Barometer, let’s present you with the usual scary stat: our “live” price/earnings ratio for the S&P 500 now sits at 73.2x. One year ago to the day, such P/E was 35.7x (yes, even that being outrageously “high” by business school standards). The S&P 500 a year ago was 2912, but today is 4181, +44%. So: the P/E having more than doubled means that “implied earnings” for the S&P 500 have actually declined from this day a year ago. (And yes, that’s still the case even if we exclude Tesla [TSLA] from the S&P 500!) Here’s a thought: “Got Gold???”

And here’s the Baro replete with its robust (as expected) week…


… as the “boom”, the “vigorous rebound”, and the “takeoff” (in the words of Dow Jones Newswires) “at the expense of businesses and the wealthy” all come to fruition. (Hilarious, even if historically proven horrendous). More peanuts and beer, please.

But crying in one’s beer we fear are the prices of the precious metals as we turn to their 10-day Market Profiles. Clearly for Gold on the left, the 1768 level appears as the final near-term price of dominant trading volume support, (notwithstanding the aforementioned 1759-1723 structural support zone). And as for Silver on the right, 26 remains her key fix, though she may dive to 25 given Gold losing a bit of jive:


Again it being month’s-end, ’tis time to bring up Gold’s Structure from 2010-to-date by the monthly bars. Price has been revisiting haunts of long ago, “The Northern Front” notably so. And even given a near-term pullback, we’re maintaining our forecast high for this year at 2401 with eight months in the balance:


So on the surface, everything’s great. Below the surface it looks to stagflate. Might Jimmy (still blessedly with us at 96) chime in to articulate? To be sure, Gold near-term looks to abate, but make sure you’ve yours before ’tis too late!



Gold Triple Top Suggests Upside Pop


We begin by quoting the late Hervé Villechaize as Nick Nack in the film ‘The Man with the Golden Gun’ –[United Artists, ’74]: “So near… and yet so far…”

Admittedly, those are (barely) consecutive lower highs. “Growl!” goes the bear. But to look at the three tops graphically…


…that has “Triple Top ‘n Pop” written all over it. And you already know from your dog-eared paperback copy of ‘Traders’ Truthful Tenets’: “Triple Tops are meant to be broken!” Thus we look to 1800+ in the new week and in turn the opportunity for Gold’s weekly parabolic trend to flip from Short to Long at 1820. “Roar!” goes the bull.

Animal audibles aside, Gold settled yesterday at 1777, (a whopping one point net loss for the week). Moreover, ’twas Gold’s third consecutive week of recording both higher lows and higher highs. To which the contrarian may say: “Well, it has to go down then.” To which the trend follower may say: “There have been six, seven, and even eight consecutive weeks of both higher lows and higher highs on multiple occasions across the past 20 years.” But bless the dear Shorts, for we need them to take the other side of the trade. And right now for Gold, 1800 is all but made.

Further as just mentioned, should 1820 trade in the new week, Gold’s parabolic trend per the following chart of weekly bars shall flip from Short to Long. At present, Gold’s expected daily trading range is 24 points, and its expected weekly trading range is 58 points. Thus in that vacuum, 1800 is within a day’s range, and 1820 is within a week’s range, (barring the Shorts spoiling the party):


In fact, should you be planning for the flip to Long, there’ve been since the year 2002 a total of 42 weekly parabolic Long trends. The “median maximum” price increase for Gold across those 42 occurrences is +9.1%. So in that vein, should Gold’s weekly parabolic trend flip to Long in the new week at 1820, a median repeat performance of +9.1% would eventually put price up to 1986. Yes, that pales in comparison to our call this year for 2401: but ‘twould be a lovely upside lurch en route. (And for those of you fortunate to be scoring at home, the median duration of those 42 Long trends is 11 weeks: ’tis thus conceivable by those yardsticks that we’ll again see Gold 2000 by July: don’t forget to tell your friends).

Now let’s turn to the StateSide Economic Barometer:


As bereft was incoming data for the boppy Baro this past week, its few reports were firmly led by March’s New Home Sales topping the one million mark for just the second time in better than 14 years: that means one in every 328 Americans bought a new home in March, a fairly dazzling statistic.

“Well mmb, Americans are flush with cash from all the COVID handouts…”

So we’re told, Squire .. and so as well are we thereto dubious. Since the start of COVID crackdowns, the United States Department of the Treasury has issued an all-in total of $370 billion to the nation’s population of 328 million. That’s an average of $1,155 per man, woman, other and child. “Hey Mabel! We got an extra two grand! Let’s go buy a house!” (Uhhh… no). As well, March’s lagging report of Leading Indicators rose, (but you already knew they would, given you follow the Econ Baro).

Thus the big bee in our butt remains the unconscionable level of the S&P 500. Our honestly-calculated “live” price/earnings ratio per the website is now 77.5x, which from “The Broken Record Dept.” is nearly four times what was taught in business school as “expensive”. But wait, there’s of course more: per the site’s S&P Moneyflow page, whether on the weekly, monthly or quarterly basis, the moneyflow is not supportive of the Index’s level (4180); indeed by that quarterly measure, the S&P 500 is nearly 400 points “too high”. Another measure is that of the S&P’s Futures at present reading 190 points above their smooth valuation line as shown on the site’s Market Values page. Again, that’s really scary stuff if you own stocks, (save, naturally, for those tied to precious metals).

Even more broadly, we’re reminded of a very valued friend and charter reader of The Gold Update who less than two years ago — way back there at S&P 3000 — was suggesting a 50% correction to be in order, (similar to that of the DotComBomb during 2000-2002 and the GlobalFinFlop during 2008-2009). At the time, we thought our friend’s -50% notion was a bit excessive; now we view it as realistic. Recall, too, we’ve another long-time and extremely successful trading colleague engaging in put options sub-S&P 2000. On verra: but when it all goes wrong, hopefully you’ll have “Got Gold!” Across of all the prior stock market crashes we’ve witnessed, never have we seen valuation excesses such as those today. Or as our great colleague here says: “I’ve run out of words.”

Meanwhile as the States seemingly are climbing out from COVID, such seems not the case elsewhere. On this side of The Pond ’tis reported that institutional demand for lines of credit and loan facilities has now fallen for three straight quarters. New COVID case rates according to the government agency Santé Publique France alone doubled during April from the pace during this year’s first quarter. With both economic statistics and yields on balance having risen in the U.S., one wonders how much longer the €uro (at present $1.21) can stay afloat: ’tis up 13% from its COVID depths of $1.07 during March 2020. “We’ll bid but one buck, please!”

Escaping from their own recent depths are the precious metals. First, here we’ve Gold’s two-panel graphic of its 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 having essentially arrived at the +80% level confirms that the uptrend is indeed just that: consistent. As for the Profile, the days of the 1600s seem passé, supportive of our notion from a month ago that, with hindsight, 1673 may stand as this year’s low:


Very similar is the two-panel state for Sister Silver with her “Baby Blues” (at left) for the past three months now kissing the +80% level and Profile (at right) showing 26 as near-term support:


Now the fundamental highlights of the ensuing week include 12 incoming metrics for the Econ Baro (most of which are expected to be improvements), plus the Federal Open Market Committee’s gathering on Tuesday and Wednesday. Dare they make a market scare? (Probably not…) Rather, let’s focus on Gold’s Triple Top entrée to 1800!

In closing we’ve the following unsolicited recommendation. We recently were privileged to meet Alex Krainer and read his book “Mastering Uncertainty in Commodities Trading: Generating sustainable profits in forex, commodities and financial markets through trend following”. The book was actually published back in 2016, but ’tis more apropos of today’s markets than ever. If you are fascinated by following markets and applying the elbow grease to be successful in trading and investing, we really recommend reading this book. Indeed, its readability is wonderful: the chapters are succinct and the sentences breeze by.

The content is supported throughout by classically analogous quotations, fine footnoting, graphics and engaging wisdom not without wit, (his commenting for example with respect to the work ethics of algorithms being such that they “don’t get tired, call in sick, take vacations or ask for a raise.”) If ever you’ve had the hankering for systematic market engagement, this book is for you. ‘Tis truly a worthwhile read, (emphasis on “worth”). A big tip of the cap to Alex!




We’ll Soon Behold 1800 Gold


With respect to this week’s title, in each of the prior three missives we’ve anticipatively penned:

20 March: “So clearly we see Gold as on the go through here: 1800 seems quite reasonable as an initial goal, however the 1800s in general could well be fraught with much to and fro.”

27 March: “…we expect Gold to now be on the rise, even with 1800 as a reasonably near-term prize.”

03 April: “This remarkable week of resiliency for Gold really fuels our recent reckoning that price is setting a near-term course for 1800.”

“But you’ve suggested ‘the when’, as near-term, mmb…”

Duly noted there, Squire, is your diplomatic use of the word “suggested”. Typically when we talk “near-term” we’re thinking out about a month’s time. However should we behold 1800 Gold even by mid-year, no one is going to say boo about it: rather, they’ll gladly take it.

Moreover in settling this past week yesterday (Friday) at 1744, price traded en route to as high as 1759, a mere 41 points below 1800. Further, given Gold’s “expected weekly trading range” is now 61 points, 1800 is well within that range. Thus briefly here are Gold’s weekly bars from a year ago-to-date, wherein a wee bit of sheer magnetism may be all that price needs:


Now let’s expound upon a driving Gold positive: this next bit is important. Any one who understands The Gold Story a wit (and that’s you) already knows that price is significantly undervalued (our opening Scoreboard valuation now reading as 3759, which is more than double the present 1744 level).

That 3759 valuation is being aided and abetted by an unconscionable creation of faux dough having increased the U.S. money supply (“M2”) at an annualized rate within the last year of over 25%. Worse, the essentially infinite universe of the 3Ds — Debasement, Debt and Derivatives — is such that if we all simultaneously tried to convert our so-called “assets” into cash, 99% of us would receive nothing, i.e. zero (“0”).

Again, you already know all that. So why isn’t Gold already way up there? The market never being wrong, its offers taken and bids hit have rightly put price at 1744. But as is oft our wont to point out, perceived price is not veritable valuation. And to embark on the road up there, Gold really needs a positive catalyst, one that regrettably for many mainstream market analysts shall become the reality. And that is: there shan’t be a materially-robust post-COVID economic boom. Sorry, but ’tis better to grasp that eventuality right now rather than later. And as such surprise sinks in, ’twill make Gold “real popular real fast” as we’ve seen in the past.

From our purview, this remains seemingly unconsidered across the financial spectrum. But we’ve herein hinted at it in recent weeks and upon it being realized could help propel Gold to 1800 … to our forecast high this year of 2401 … in time to our Scoreboard valuation of 3759 … and beyond.

‘Tis today comprehensively considered conventional wisdom that “if” or “when” post-COVID the economy “fully re-opens”, that ’tis going to go upside gonzo nuts. “Straight up, baby!” ‘Tis already been priced in a bazillion times over per the now 4128 level of the S&P 500, (which “if” or “when” halved would still be too expensive given its constituents’ lack of earnings).

Oh no: we don’t see the economy post-COVID going upside gonzo nuts . It already has. Oh to be sure: COVID creamed 21,557,000 Non-Farm Payrolls in March-April of 2020. But since then, albeit still at a net deficit, 13,657,000 already have been re-created during the May’20 – March’21 period. (By comparison, the May’19 – March’20 period created but 1,009,000 such payrolls).

Oh yes: The StateSide private sector with some benevolent public sector sprinkling has been busy. To wit, here is an expanded edition of the Economic Barometer from January 2019-to-date, the Baro line itself coloured as “periwinkle” pre-COVID (through February 2020) and then as the usual navy blue-to-date. ‘Tis darn stark in the chart that following the COVID bottom, the economy already has gone upside gonzo nuts. ‘Tis what industrious folks cause to happen by dealing with the problem and then getting on with the program:


The point is: when the economy lacks puff moving forward, especially as higher minimum wages and higher corporate tax rates both exacerbate unemployment, the upside gonzo nuts shall instead be job cuts. And then ’twill be Gold that goes nuts! That’s how we see it unfolding.

In fact, is the Federal Open Market Committee nervously seeing same, but not so saying? After all, Alternate Member Cleveland FedPrez Loretta “Jump Back” Mester notes that March’s “great” payrolls report is not an incentive for the Fed to raise rates. As well, the FOMC’s minutes of the 16-17 March meeting supports the ongoing dovish policies.

But perhaps the unmentionable through the hallowed halls of the Eccles Building is that “upside gonzo nuts” ain’t gonna happen. Still on a broader basis, the International Monetary Fund is looking to 6% growth for the globe in 2021 which is pretty much on par with what the Atlanta Fed is expecting for the U.S. in Q1’s annualized rate: we get its first peek in April’s last week. Just be wary that the bottom line through this year’s time may not be as fine. And that is a Gold positive catalyst.

Here’s another one, technical in nature. ‘Tis Gold’s 300-day moving average which in bearish times keeps the lid on price, but supports same when the bulls (as now) are winning the game, (per last week’s piece “Gold Buyers Own the Trading Volume“). And the penetration of the bright blue line within a bullish climb screams for it being buying time:


Drilling deeper into “The Now”, here we’ve our two-panel graphic of Gold’s daily bars from three months ago-to-date on the left and price’s 10-day Market Profile on the right. The baby blue dots of linear regression trend consistency are resting upon their 0% axis, meaning that price today is basically where ’twas 21 days (one trading month) ago. The Profile is now indicative of trading support in the 1720s:


The same graphic for Silver is arguably weaker by the negative level of her “Baby Blues” (below left); however her price these past two weeks has been rebounding in stride with Gold. As well per our thought a week ago, she has now regained the 25s per her Profile (below right). C’mon Sister Silver and fix at 26! For by the present Gold/Silver ratio of 68.9x, Gold 1800 = Silver 26.12:


Finally, let’s wrap it with something scary. Remember all those futuristic fictions such as Orwell’s ‘Animal Farm’ and ‘1984’, H.G. Wells’ ‘The Time Machine’, Saul David’s ‘Logan’s Run’ (MGM ’76), et alia? Well doggone if they ain’t coming true. Clearly the public sector has gone Orwellian, the private sector is populated — and worse more and more managed — by Eloi (adults with the brain development of an eight-year old), and if you’re over the age of 30, you’re an unnecessary “has been”.

And now we’ve got The United States Department of the Treasury earnestly envisioning a “Global Minimum Corporate Tax Rate”?? To quote tennis great John Patrick McEnroe: “You canNOT be SERIOUS!!” Well, “Old Yeller” herself is taking it darn seriously as is the G20. And under what Global Law shall this be governed? Oh, they’ve not yet invented that, but ’tis coming? My oh my, we again ask: “Got Gold??”


Gold Buyers Own the Trading Volume


But here’s the real but: Gold’s trading range for the week initially ran from 1733 down to 1677, and then back up to 1732 — boo boo bee doo, you Short April Fool. That’s a 55-point positive reversal through which true Longs survived, but shallow Shorts died. ‘Tis once again exemplary as we’ve on occasion put forth these many years that “Shorting Gold is a bad idea.” And the recovery off the week’s low was fierce against the frail Shorts, price therein leaping 34 points within just six hours on 31 March: “Got Gold to show in your portfolio for the Q1 close?” Darn tootin’ you do!

But wait, there’s more: The cumulative contract volume on the way down (across 38 hours) was 75,760. The cumulative contract volume on the way back up (across 54 hours) was 370,239. Thus with the Sellers in charge, an average of 1,994 contracts traded per hour; but when the Buyers then took charge, an average of 6,856 contracts traded per hour. Buyers win by 3.4x. Right now, the Buyers own the trading volume … Ready for higher Gold prices?

This remarkable week of resiliency for Gold really fuels our recent reckoning that price is setting a near-term course for 1800. ‘Course, ’twas all obscured within the FinMedia, the overwhelming focus there instead being on the S&P 500 eclipsing the 4000 level, at which moment we sent the following one-liner to our Investors Roundtable: “S&P 4000 … ‘Live’ P/E 74.9x … Lord have mercy …”

Suicidal stock market insanity. From 1987-to-date, we’ve been through all the major S&P 500 crashes, none of which remotely were preceded by such pricing excess relative to earnings as we have today. And with the next debacle in the inevitible balance, metaphorically to again quote Gabor Vernon in the role of Borchoi, (‘Octopussy’, United Artists/Eon Productions, 1983): “Be at least 25 miles away when it goes off.”

Now as ’tis month-end, (plus one full trading day), let’s go straight to this eye-opening graphic of the percentage tracks from one year ago-to-date of Gold and those of its major equities brethren. This is one of these best examples we’ve had of the leverage inherit in metals stocks: whilst Gold itself shows as +8%, Franco-Nevada (FNV) is +26%, Newmont (NEM) is +33%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) is +40%, Agnico Eagle Mines (AEM) is +43%, the Global X Silver Miners exchange-traded fund (SIL) is +76%, and the “once-dog-now-darling” of this group Pan American Silver (PAAS) is +115%. Granted: the power of these up moves is the result of money moving into the metals just after their COVID plunge during March a year ago. But the chart nonetheless highlights the leverage of the equities:


All that excitement aside, across the same time frame in turning solely to Gold’s weekly bars, clearly the rightmost bar’s resilience is there, its low (1677) nearly matching that of three weeks ago (1673), which as then stated may still in hindsight mark 2021’s low. If so, 1800 by default (assuming the Gold market doesn’t dry up) comes into play, perhaps fairly straightaway. Gold’s “expected weekly trading range” is now 64 points, which in that vacuum should a “straight up week” now ensue, the high’d be 1794 in front of 1800’s door:


In fact, as we openly note the deteriorating diagonal upslope of the dashed trendline across the above graphic, ’tis in concert with Gold actually being -9.0% year-to-date as we go to the BEGOS Markets Standings. The Bond’s demise as yields rise (are you listening S&P 500?) finds the great debt instrument having replaced Gold as the cellar dweller, with Oil, Copper and the S&P on the podium in the same positions as they were when we last viewed this table at February’s end.

Should the year unfold as we anticipate “it ought” and Gold achieve our forecast high of 2401, ‘twould then be +26.3% whilst the undoing (via the “Look Ma, No Earnings!” crash) of the S&P would find it at the bottom of the stack, having unraveled some -30%, -40%, -50%, or whatever:


Now to the economy — and for the second week running — Dow Jones Newswires points to that StateSide as “hot”, indeed this time ’round stating it to be “red-hot”, (as so-printed on 01 April … thus their joke?) Either way, as we go strictly by the numbers, it doesn’t look so “hot” to us … not bad mind you, but hardly “hot”:


And moreover, let’s repeat that from a couple of weeks back: “…if the economy is ever allowed to reopen in full, the expected surge shan’t be there, simply because the private sector has already adjusted to carrying on with business as best it can…”

To be sure, incoming metrics this past week for the Economic Barometer were positive on the various sentiment fronts and notably so for March’s Payrolls increase of nearly one million jobs; however, Hourly Earnings declined for the first time since those from last June, February’s Construction Spending shrank for the first time since last September, and Pending Home Sales were whacked -10.6%, their worst reading since the early depths of COVID a year ago. And up next? Income tax payments! No April Fools’ joke there. And higher tax rates await! Ain’t that great? At least they’ll pay both for fixing the roads and the climate … (“Whew!”)

Meanwhile as France goes into a comprehensive one-month lock-down now across all of its Departments, International Monetary Fund Managing Director Kristalina Georgieva’s crystal ball sees the global economy as brighter given vaccines and stimuli … and lions and tigers … and bears, oh my …

What of course bears watching are the trends of the BEGOS Markets as we go ’round the horn for the whole lot of them with this graphic of their daily bars from one month ago-to-date, diagonal grey regression trendlines, and the baby blue dots which depict each trend’s consistency. Of note: only Gold and the S&P 500 (“Spoo”) are at present sporting uptrends:


And as for the precious metals’ 10-day Market Profiles, the prices of both Gold and Silver survived their intra-week dives. The yellow metal’s goal now is to get above the 1730s whilst that for the white metal is to at least get comfortably above 25:


Finally, it being month-end plus a day, here we’ve Gold’s structure by the month since 2010. That blue line at the top indicating our forecast high for this year of 2401 seems “a fair piece” from here; but as pointed out in recent missives, Gold — as it has done percentage-wise on numerous occasions historically — is perfectly capable of getting there within the nine months of this year’s balance. And once the price of 2000 is re-achieved, that run to such high may come swiftly:


To close we’ve a question with respect to Normura Securities, Credit Suisse, et alia looking at equity desk losses on something to do with an Archegos Capital significant asset unwinding: yes, it does beg the obvious, but with the S&P 500 at an all-time high, how does this happen? Just askin’…

Better to jump on the volume trend and get yourself some Gold! Just sayin’