There’s a New Sheriff in Town

Market participants and investors are under the assumption that this new administration will aggressively continue to propose fiscal stimulus aid.

Before his inauguration, President-elect Joe Biden revealed his stimulus proposal which will add another $1.9 trillion to the national debt. The proposed relief package will concentrate on the immediate needs of the nation. In an evening speech in Wilmington Delaware, President Biden said, “Unity is not some pie-in-the-sky dream. It’s a practical step to get any of the things we have to get done as a country, get done together,”.

More importantly, this is only the first step to a much larger recovery package that will follow. The new administration will begin its term with more than one crisis stemming from the global pandemic. Healthcare and distribution of the vaccines will be first and foremost as the president will allocate a large portion of the $2 trillion expenditure to focus upon testing, production, and delivery of vaccines. The remainder of the funds from the “American rescue plan” will provide direct aid to Americans, communities, and businesses which have been directly impacted by the pandemic.

Today’s solid move in both gold and silver, as well as U.S. equities, is based upon the expectations that President Biden will announce additional fiscal stimulus actions which will be announced and detailed as one of his first acts as president of the United States.

Concurrently the Chairman of the Federal Reserve, Jerome Powell has pledged to maintain an extremely accommodative monetary policy with interest rates near zero at least through the end of 2022 and simultaneously continue to purchase $120 billion monthly adding to their assets. These purchases will be primarily mortgage-backed securities, corporate bonds, and U.S. treasuries.

There are also high expectations that the new head of the United States Treasury Department Janet Yellen will continue to allocate additional trillions of dollars in fiscal stimulus. Janet Yellen is on record saying that the United States should “act big” on the economy. Since the beginning of the pandemic, the U.S. government has allocated almost $6 trillion for fiscal aid.

It is the massive expenditures by central banks globally in unison with the United States Federal Reserve and Treasury Department that will provide the underlying support which will weaken the dollar, and take gold and silver prices higher. The European Central Bank will hold a policy meeting this week with the goal of keeping the accommodative monetary policy in place.

Gold

As of 5 PM EST, February 2021 Comex gold futures are up by $31.10 (1.70%) and fixed at $1871.50. March Silver futures gained approximately $0.60 (+2.33%) and is fixed at $25.91.

Silver

As far as the expenditures that have totaled approximately $4 trillion for aid goes according to President Biden, he believes that this allocation of capital is unfinished business and said that “I know what I just described will not come cheaply. But failure to do so will cost us dearly.”

Clearly there is a new sheriff in town, one who promises to provide the American public and businesses with the needed capital to stay afloat. As such we expect that our national debt to reach new record levels.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

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

Silver Price Forecast – Silver Markets Looking Towards 26 USD

Silver markets will continue to be bullish as long as we have a strong case for stimulus coming out the United States, and at this point in time I think the $26 level is very crucial to pay attention to. The $26 level has offered plenty of recent resistance, and if we can break above that level it is likely that we go looking towards the $27.25 level. Ultimately, this is a market that I think will continue to see upward pressure, so even if we do pull back, I would be looking at silver as a potential “buy on the dips” type of scenario. Ultimately, I think that the 50 day EMA of course attracts a certain amount of attention and so does the $24 level. The $24 level has been supportive more than once, and the fact that we have stayed above at and bounce from there suggests to me that it is the new “floor the market.”

SILVER Video 21.01.21

To the upside, I believe that we will be looking at the $28 level above as an area where there should be a significant amount of resistance. I do believe that ultimately, we will find reasons to get long given enough time. The market probably breaks above there based upon an announcement of stimulus that opens up the possibility of a move towards the $30 level over the longer term. If we can break above the top of the $30 level, then it opens up the floodgates for a much larger move longer term. At this point, I do not have a scenario in which a willing to sell this market anytime soon.

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

Silver Price Daily Forecast – Silver Tries To Settle Above $25.55

Silver Video 20.01.21

Silver Continues To Move Higher

Silver is currently testing the resistance at the 20 EMA at $25.55 while the U.S. dollar is mostly flat against a broad basket of currencies ahead of Joe Biden’s inauguration.

The U.S. Dollar Index has recently made an attempt to settle below the support at the 20 EMA at 90.35 but failed to develop sufficient downside momentum and rebounded closer to 90.50. The next resistance level for the U.S. Dollar Index is located at 90.70. If the U.S. Dollar Index moves above this level, it will gain additional upside momentum which may put some pressure on silver and gold price today.

Meanwhile, gold is testing the resistance at the 20 EMA at $1865. The next resistance is located at the 50 EMA at $1870, so gold will likely face significant resistance in the $1865 – $1870 area. A move above this resistance area will open the way to the $1900 level which will be bullish for silver and other precious metals.

Gold/silver ratio made an attempt to settle below the 73 level but did not manage to gain downside momentum. If gold/silver moves towards the 72 level, silver will get additional support.

Technical Analysis

Silver managed to get above the resistance at $25.30 and is trying to settle above the next resistance level at the 20 EMA at $25.55. In case silver manages to settle above this level, it will head towards the next resistance at $25.85.

A move above this level will push silver towards the resistance at $26.30. There are no important levels between $25.85 and $26.30, and previous moves in this area were fast.

On the support side, the previous resistance level at $25.30 will likely serve as the first support level for silver. The next support level is located at the 20 EMA at $25.20. If silver declines below the 20 EMA, it will get to the test of the next support level at $25.00. This support level has already been tested during the current trading session and proved its strength so silver may need additional catalysts to settle below $25.00.

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

Gold Traders Await more Clarity on The New Administration’s Policies

Silver futures are trading respectably higher on the day, scoring the largest percentage gain of all of the precious metals.

Silver

Dollar weakness was a definitive factor in today’s gains. As of 4:11 PM EST, the U.S. dollar index is currently trading down 27 points (-0.30%) and fixed at 90.48.

Currently, February 2021 gold futures are up to $9.20 (+0.50%) and fixed at $1839.10. March Silver futures have gained approximately $0.40, fixed at $25.26. Spot gold had fractional gains of $2.00 which was due to dollar weakness overcoming the selling pressure.

Gold

President-elect Joe Biden has just arrived at Joint Base Andrews, as he prepares to be sworn in as the 46th president of the United States. This new administration will bring forth a completely different set of policies, and market participants will focus intently on his proposals to rebuild our economy and eradicate Covid –19.

Expectations are that he will greatly increase fiscal stimulus and continue as long as needed. He has already proposed a $1.9 trillion package. While fiscal aid is proposed is essential for the economy. At the same time, we are aware that the more fiscal stimulus that is allocated the greater the United States digs deeper into debt.

The Fed has stated they will be maintaining the current highly accommodative monetary policy, which includes quantitative easing and the purchase of approximately $120 billion of assets a month in which they will add to their current balance sheet.

The question becomes what long-term effects will these actions have upon our national debt and budget deficit. As we reported last week data from the Federal Reserve Bank of New York indicated that the national debt has risen by almost $7.8 trillion during the Trump administration. This additional debt amounts to $23,500 in additional Federal debt for every individual in the United States according to the associated press.

The most alarming fact is that the United States Treasury Department acknowledged that the budget deficit rose by 60.70% during the first three months of this fiscal year which began in October. Current projections indicate that by the second quarter of last year we had a jump to 127% of our GDP. This enormous mounting national debt is still coupled with massive unemployment that will likely lead to a major devaluation of the U.S. dollar and a tremendous rise in the price of gold over the upcoming years.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

Silver Price Forecast – Silver Markets Show Signs of Strength Again

Silver markets initially pulled back during the trading session on Tuesday to reach down towards the $24 level. At that point, the market turned around to bounce significantly and ultimately it seems as if we can break above the $26 level, then the market could very well go looking towards the $28 level over the longer term. All things being equal, this is a market that is well supported underneath, and quite frankly moving on the idea of stimulus still. The US dollar falling and of course is fuel for silver to continue going higher, and I think that is what you need to pay attention to more than anything else.

SILVER Video 20.01.21

If we can break above the $26 level, I think it will attract more in flow of money, as it would probably signify the US dollar falling as well. Janet Yellen is testifying in front of Congress during the trading session for her confirmation hearing, so it is possible that traders may get some idea of just how dovish she is going to be. Quite frankly, I do not think the Janet Yellen has it in her DNA to be anything remotely close to hawkish, so more than likely we will see a continuation of the US dollar depreciation eventually. In the short term though, we have gotten a little bit overstretch when it comes to selling of the US dollar so I think that the silver markets may more or less go back and forth in the short term with an upward bias.

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

Silver Price Daily Forecast – Silver Gains Ground On Weaker Dollar

Silver Video 19.01.21.

Silver Moves Higher Ahead Of Yellen’s Speech

Silver is trying to get back above the 50 EMA at $25.15 while the U.S. dollar was under pressure against a broad basket of currencies.

The U.S. Dollar Index developed downside momentum ahead of Yellen’s speech before the Senate Finance Committee and managed to get below the support at 90.50. Currently, the U.S. Dollar Index is trying to get to the test of the next support level at the 20 EMA at 90.30. If the U.S. Dollar Index settles below this level, it will gain additional downside momentum which will be bullish for silver and gold price today.

Meanwhile, gold is stuck below the $1850 level although it tries to move higher. In case gold manages to settle above the nearest resistance level at $1850, it will move towards the next resistance at $1865 which will be bullish for silver and other precious metals.

Gold/silver ratio failed to settle above the 50 EMA at 74.20 and is testing the support at the 20 EMA at 72.90. A move below the 20 EMA will push gold/silver ratio towards the 72 level which will provide additional support to silver.

Technical Analysis

silver january 19 2021

Silver is currently trying to settle above the 50 EMA at $25.15 and get to another test of the next resistance at $25.30. If this test is successful, silver will move towards the next resistance level which is located at the 20 EMA at $25.55.

A successful test of the resistance at $25.55 will open the way to the test of the resistance level at $25.85. In case silver manages to get above $25.85, it will head towards the resistance at $26.30. No important levels were formed between $25.85 and $26.30 so this move may be fast.

On the support side, silver must settle below the 50 EMA at $25.15 to have a chance to develop downside momentum in the near term. The next support level is located at $25.00.

In case silver declines below this level, it will move towards the support at $24.70. If silver manages to settle below the support at $24.70, it will head towards the next support at $24.50.

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

Stocks Move Higher Ahead Of Yellen Speech

Treasury Secretary Nominee Janet Yellen Is Expected To Support The Huge Stimulus Package

S&P 500 futures are gaining ground in premarket trading as traders expect that Janet Yellen will support Biden’s $1.9 trillion stimulus package when she speaks before the Senate Finance Committee.

Yellen is projected to state that the stimulus package is a vital instrument in the combat against the consequences of the coronavirus pandemic, and that the U.S. debt burden is not a concern right now.

Yellen is also projected to commit to market-determined exchange rate of the U.S. dollar, in contrast with the outgoing President Donald Trump who has many times stated that he wanted a weaker U.S. dollar.

However, it remains to be seen whether Yellen’s comments will provide additional support to the U.S. dollar which is currently losing ground against a broad basket of currencies. The new stimulus package may ultimately serve as a bearish catalyst for the American currency and push it to multi-month lows.

IEA Cuts Its Oil Demand Forecast

IEA decided to cut its oil demand outlook by 0.3 million barrels per day (bpd) due to continued problems on the coronavirus front.

This is not a big surprise to the market as traders are prepared to see poor demand data in the first quarter of 2021 due to lockdowns in Europe.

Another downside revision of the full-year oil demand forecast did not spoil the mood of oil traders, and WTI oil is currently trying to settle above $52.50.

Not surprisingly, oil-related stocks are set for a strong start of the trading session after the correction on Friday.

Precious Metals Lack Momentum As Higher Yields Reduce Demand For Gold And Silver

Gold and silver have been trying to stabilize after the sell-off which happened at the beginning of this year.

The recent rebound of the U.S. dollar put additional pressure on precious metals, but rising U.S. Treasury yields were the main negative catalyst.

The bond market may be sensitive to Yellen’s speech before the Senate Finance Committee, so gold and silver may have an active trading session today. Gold and silver mining stocks, which have recently suffered a significant correction, may also be volatile today.

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

Daily Gold News: Gold Going Sideways Following Monday’s Rebound

The gold futures contract gained 0.4% on Monday after bouncing from an overnight low of around $1,800. The market gave back almost all of its December’s advance recently. Gold is trading within a short-term consolidation, as we can see on the daily chart ( the chart includes today’s intraday data ):

Gold is 0.2% higher this morning, as it continues to trade within a consolidation. The market remains close to $1,850 price level. What about the other precious metals? Silver is 1.2% higher. Platinum is gaining 1.1% and palladium is 0.4% higher. So precious metals are higher this morning.

Today we won’t get any important economic data releases. The markets will wait for tomorrow’s President-Elect Biden Speech and the Bank of Japan Outlook Report release, among others.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Tuesday, January 19

  • 5:00 a.m. Eurozone – German ZEW Economic Sentiment
  • All Day, Eurozone – ECOFIN Meetings

Wednesday, January 20

  • 10:00 a.m. U.S. – NAHB Housing Market Index
  • 10:00 a.m. Canada – BOC Monetary Policy Report, BOC Rate Statement, Overnight Rate
  • Tentative, U.S. – President-Elect Biden Speech
  • 7:30 p.m. Australia – Employment Change, Unemployment Rate
  • Tentative, Japan – BOJ Outlook Report, Monetary Policy Statement

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.
Sign up for our free gold, stock, and oil newsletter today!

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Silver Price Forecast – Silver Markets Find Support

Silver markets initially pulled back significantly during the trading session on Monday but has bounced just a significantly from the $24 level. The $24 level has been supported in the past, so it is not a huge surprise to see a little bit of a hammer here. I think silver continues to move based upon the idea of stimulus, not only from the United States but multiple central banks around the world. The hammer of course is a bullish sign, but at the end of the day there is a lot of resistance above at the $26 level, suggesting that we are in a tightening type of market. If we can break above the $26 level, the market is likely to go looking towards the $28 level.

SILVER Video 19.01.21

To the downside, if we break down below the bottom of the candlestick for the trading session on Monday, then we could go looking towards the 200 day EMA which is close to the $22.90 level. That is an area that should be paid close attention to from a longer-term standpoint, and ultimately, I believe that we will find buyers given enough time. Because of this, I would be cautious about jumping in with both feet, but the overall uptrend still seems to be trying to assert itself. The volatility will continue to chop this market back and forth, but I still believe in the overall upward mobility. I would not read too much into the candlestick for the day yet though, because it was Martin Luther King Day in the United States, so a significant amount of liquidity was not even involved in the market.

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

Silver Price Daily Forecast – Silver Is Volatile At The Start Of The Week

Silver Video 18.01.21.

Silver Tested Support At $24.00 But Quickly Rebounded

Silver is trying to settle above the resistance at $25.00 after an unsuccessful attempt to get below the support at $24.00 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum and managed to settle above the resistance at 90.70. Currently, the U.S. Dollar Index is testing the next resistance level which is located at the 50 EMA at 90.95. If the U.S. Dollar Index gets above this level, it will head towards the resistance at 91.20 which will be bearish for silver and gold price today. Stronger dollar is a negative catalyst for silver and other precious metals as it makes them more expensive for buyers who have other currencies.

Meanwhile, gold is trying to get back to the $1850 level after an attempt to settle below the support at $1800. If gold manages to settle above $1850, it will move towards the resistance at $1865 which will be bullish for silver.

Gold/silver ratio has recently made an attempt to settle above the resistance at the 50 EMA at 74.30 but failed to gain sufficient upside momentum. If gold/silver ratio settles above the 50 EMA, it will move towards the resistance at 75.50 which will put additional pressure on silver.

Technical Analysis

silver january 18 2021

Today, silver tested the support level at $24.00 but failed to develop additional downside momentum and rebounded closer to the $25 level.

The nearest significant resistance level for silver is located at the 50 EMA at $25.15. If silver manages to settle above this level, it will move towards the next resistance at $25.30. A successful test of this level will push silver towards the next resistance which is located near the 20 EMA at $25.55.

On the support side, silver will likely get some support near $24.70. A move below this level will open the way to the test of the support at $24.50. In case silver gets below this level, it will head towards the support at $24.25.

The recent trading action indicated that silver may move fast between these levels so traders should be ready to react quickly to any developments.

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

Daily Gold News: Monday, Jan. 18 – Gold Bouncing From $1,800

The gold futures contract lost 1.16% on Friday, as it got close to the recent local lows following previous Friday’s sell-off of 4.1%. The market gave back almost all of its December’s advance. Gold fell close to $1,800 again, as we can see on the daily chart ( the chart includes today’s intraday data ):

Gold is 0.2% higher this morning after bouncing from $1,800 price level. Right now, it is trading along Friday’s closing price. What about the other precious metals? Silver lost 3.63% on Friday and today it is 0.4% higher. Platinum lost 3.24% and today it is 0.9% higher. Palladium lost 1.16% and today it’s 0.2% lower. So precious metals are mixed this morning.

Friday’s Retail Sales release has been worse than expected at -0.7% m/m.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Monday, January 18

  • 6:00 a.m. Eurozone – German Buba Monthly Report
  • All Day, Eurozone – Eurogroup Meetings
  • All Day, U.S. – Bank Holiday

Tuesday, January 19

  • 5:00 a.m. Eurozone – German ZEW Economic Sentiment
  • All Day, Eurozone – ECOFIN Meetings

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.
Sign up for our free gold, stock, and oil newsletter today!

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Gold Sheared, Silver Smeared

160121_gold_scoreboard

But relax: have a cracker ‘n schmear, perhaps even a beer, and we’ll try to relate to making it all clear.

To be sure — given all that we and you from here to Kalamazoo fundamentally understand about Gold – its moving lower in the ongoing financial environment makes nary a wit of sense whatsoever. The market is never wrong by traders having put price where ’tis, irrespective of its going the wrong way.

And given the fundamental precious-metals-positive state of essentially everything, ’tis diabolical that price descend.

Indeed as Gold leaped out of the gate to commence the New Year by gaining +3.2% (and Silver +6.0%) within the first three trading days, it struck us that our call for a Gold high this year of 2401 may have been too conservative. And from the “Under-State and Over-Deliver Dept.”, such 2401 forecast may still be too conservative even given the present pullback.

Either way, Gold settled out the week yesterday (Friday) at 1828 … which is but half the above Scoreboard’s debasement valuation of 3644. Moreover, ’tis before President-to-be-Biden rolls out his nearly $2 trillion instant COVID/economic relief plan, which with Congress now all “blue” ought pass right through.

“But even that is already priced into Gold, right mmb?”

Of course ’tis, Squire, just as always is everything. (Pity the poor trader who thinks he has it all figured out before anyone else does: “Take a seat at the back of the bus, buddy…”).

And again, please spare us the argument that bits**t is the modern alternative to Gold. Cryptocrap — which within two trading days just fell -27% — ain’t fallin’ into our lap.

And again (again), the fundamental stance for Gold we continue to view as 100% positive given the ever-burgeoning levels of the 3Ds (Debasement, Debt, Derivatives), the declining Economic Barometer (as we’ll below show), COVID clearly not contained (nor the effects of its vaccines preordained), and the endless spending of even more $trillions beyond the initial $2 trillion under Biden/Harris/Congressional reign!

So: why has Gold been declining? Reprise: the technical stance for Gold may merely be viewed as price having leapt too far too fast, as least by its recent deviation above the 300-day moving average.

To wit: since the start of the millennium we’ve had 5,043 trading days. Therein, Gold has settled more than 10% above its 300-day moving average a fair amount of the time: 1,697 days, to be precise (or one-third of days overall). That alone is a testament to the price of Gold rising over the long-term whilst all of the aforementioned fundamentals reduce the value of the faux dough Dollar.

In commencing 2021, so swift was Gold’s up move that price found itself nearly 13% above its 300-day moving average. And from the year 2001-to-date, Gold’s average price decline within three months upon a deviation of greater than 10% above that average is -6.2% (the standard deviation being 4.9%). So with Gold recently settling at 1954 (05 January), ’twas +12.6% above said average. A -6.2% decline from there puts price at 1833, (the recent low being 1817). ‘Course, hardly have three months yet to ensue: thus let’s further subtract the standard deviation which puts price down to 1739. On verra, but a positive Gold stance by the fundamentals belies such demise.

Besides, as we saw a week ago, Gold’s weekly parabolic trend has flipped from Short to Long, dubious as it appears on the following graphic of the price bars from one year ago-to-date. The wiggle room between the rightmost blue dot (1771) and present price (1828) is but 57 points, somewhat daunting as Gold’s “expected weekly trading range” is now 72 points. Thus the new Long trend is within range of being Short-lived.

And to quickly flip back to Short would leave any fundamentalist further flabbergasted. The point is: the Gold Bull ought not be put out of sorts should the lower 1700s be tested. Indeed, Gold appears to be structurally supported in the 1792-1673 range, but we don’t honestly find any rationale for price to venture there.

160121_gold_weekly

‘Course, the Dollar has actually been getting a bit of a bid to start the year, which in turn is why the BEGOS Markets year-to-date ain’t lookin’ all that great, the sole exception being Oil which typically shall slide during a Dollar up-glide. (Speaking of Oil for those of you who follow the website’s Market Rhythms page, the 12-hour MACD study looks to confirm a negative crossing in starting the new week). Otherwise, through these first 10 trading days of 2021, Gold as we below see is thus far the weakest of the five primary components which comprise BEGOS:

160121_begos_markets

In trying to ferret it all out from the FinMedia, one may be better off with a shot of tequila. Try these “back-to-back” readings from the Dow Jones Newswires: “…the labor market is losing momentum amid rising coronavirus cases…” (followed by) “…This Could Be the Best Year on Record for Job Growth. Gains are expected to be driven by a re-emerging economy…” That must have come from their “Now and Then Dept.”

Or try this FinTimes and Reuters bit: “…JPMorgan, Citigroup and Wells Fargo cite increased certainty on vaccines and improving economic outlook…” (followed by) “…U.S. Labor Market Losing Speed as COVID-19 Spirals Out of Control…”

And we know throughout history that such opposing opinions when elicited as policy result as follows:

160121_deux_locos

And it appears that the S&P finally is beginning to crack, the “live” price/earnings ratio being essentially a record — indeed stratospheric — 78.7x and our “textbook” technicals reaching “extremely overbought” this past Tuesday into Wednesday. ‘Tis right in line as we’ve written of late that the S&P “is horribly due for a massive crash”.

Even a terrific Q4 Earnings Season would hardly right this ship: bottom lines ought need triple to-quadruple just to get the P/E in line with any acceptable historical norm. And hardly is the economy helping: beyond December’s improvements in Industrial Production and Capacity Utilization, the month’s Retail Sales actually shrank whilst Import and Export Prices rose. Can you say “stagflation”? As well, January’s New York Empire State Index sported its weakest reading since July.

Then we’ve Cleveland FedPrez “Jump Back” Loretta Mester pointing to the StateSide economy’s needing strong 2021 government support, (and you know ’tis coming in $trillions: Got Gold?) Chiming in, too, is overall FedHead Jerome Powell stating the road to recovery for jobs is long with open-ended easy money to remain available. Again: Got Gold?

Still, not everyone has got Gold (now that is to Under-State) nor are stocking up en masse as we turn to our two-panel graphic of Gold’s daily bars from three months ago-to-date on the left and those for Silver on the right. Problematic for both markets is their respective sets of “Baby Blues” falling below the 0% axis, meaning that the 21-day linear regression trends have rotated from positive to negative: Sheared and smeared, indeed:

160121_gold_silver_dots

And as for the past fortnight — which is year-to-date — both precious metals obviously find themselves near the bottom of their respective 10-day Market Profiles:

160121_gold_silver_profiles

We’ll sum it up here with the stack:

The Gold Stack

  • Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3644
  • 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 “volume-weighted” average price magnet: 1887
  • Trading Resistance: (most immediate) 1843 / 1849 / 1859
  • Gold Currently: 1828, (expected daily trading range [“EDTR”]: 34 points)
  • Trading Support: none per the 10-day Market Profile
  • 10-Session directional range: down to 1817 (from 1963) = -146 points or -7.4%
  • 2021’s Low: 1817 (11 January)
  • The Final Frontier: 1800-1900
  • The Northern Front: 1800-1750
  • The Weekly Parabolic Price to flip Short: 1771
  • On Maneuvers: 1750-1579
  • The 300-Day Moving Average: 1745 and rising
  • 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 is lite for incoming economic data and brings joyous relief for the media in welcoming the 46th President of the United States via an Inauguration replete with virtual festivities. But ’tis said the 47th President in terms of time may not be far behind. So let the StateSide and geo-political schmear unfold whilst you fortify your financial well-being with Gold!

160121_25th_sec3

Cheers!

www.deMeadville.com
www.TheGoldUpdate.com

Silver Weekly Price Forecast – Silver Markets Choppy

Silver markets have gone back and forth during the course of the week, showing signs of choppiness and indecision. By doing so, this suggests that the market is simply focusing on whether or not there is enough stimulus out there, as later in the week there were concerns about whether or not Joe Biden could get a $1.9 trillion stimulus package through Congress. Silver will move back and forth based upon these expectations, but there is still a lot of support underneath and therefore I do not have any interest in shorting silver until we break down below the 50 week EMA, or essentially the $22 level. This means that we could continue to go lower in the short term, but I do think longer term we will continue to see buyers attracted to the precious metals markets.

SILVER Video 18.01.21

The $26 level is resistance above, and I think that if we can break above there then it could open up a move towards the top of the candlestick from the previous week, reaching towards the $28 level. If we can break above there, then it is likely that the market could go towards the $30 level. Once we break that level, then this market is ready to go much higher. I think we will continue to see noise over the next couple of weeks but from a longer-term standpoint I truly like silver a lot. In fact, I not only have been trading silver in the futures market, but I have been buying physical silver as well.

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

Silver Price Forecast – Silver Markets Plunge to End Week

Silver markets have initially tried to reach towards the $26 level but found resistance in that area. That being said, we have rolled over a bit to show signs of exhaustion. The market has not broken down below the massive candlestick from last week that showed significant selling pressure, and as a result it is likely that the market will probably find support underneath based upon previous action. That being said, the market has had a rough day on Friday, but when you look at the reasons, it is a bit more complex than simply pulling back from the $26 level.

SILVER Video 18.01.21

The 10 year notes started to cause havoc for traders in general, because rising interest rates would of course make the dollar a bit more attractive, and of course people are concerned about stimulus all of the sudden, as the size of the package may not be able to get through Congress. That being said, people are worried about the “size of the stimulus package”, and that of course could have the reflation trade going away, or perhaps more importantly simply being smaller.

Silver is a huge part of that, because not only is it a precious metal but it also has an industrial component built into it, so having said that it is likely that we will continue to see a lot of questions in general, and as a result it is likely that short-term pullbacks will continue to offer value from a longer-term standpoint, but at this point we are simply moving back and forth based upon the latest headlines as far as cheap money is concerned, which of course is typical for Wall Street.

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

Silver Price Daily Forecast – Silver Is Losing Ground Ahead Of The Weekend

Silver Video 15.01.21.

Silver Is Under Pressure As Gold/Silver Ratio Moves Higher

Silver managed to get below the 50 EMA at $25.20 and is trying to settle below the support at $25.00 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest resistance level at 90.50. This resistance level has already been tested many times in recent trading sessions and proved its strength. If the U.S. Dollar Index manages to settle above 90.50, it will gain upside momentum and get to the test of the next resistance level at 90.70 which will be bearish for silver and gold price today.

Meanwhile, gold continues to trade near the $1850 level. Gold has already made several attempts to settle above this level in recent trading sessions but these attempts yielded no results. If gold manages to settle below the nearest support level at $1830, silver will find itself under pressure.

Gold/silver ratio managed to get above the 20 EMA at 72.80 and gained strong upside momentum. Currently, gold/silver ratio is testing the resistance at the 50 EMA at 74.30. In case gold/silver ratio gets above the 50 EMA, it will gain additional upside momentum which will be bearish for silver.

Technical Analysis

silver january 15 2021

Silver declined below the 50 EMA at $25.20 and is currently testing the support level at $25.00. RSI is in the moderate territory so there is plenty of room to gain additional downside momentum.

If silver declines below the support at $25.00, it will move towards the next support level at $24.70. A successful test of this level will push silver towards the support at $24.50. In case silver settles below the support at $24.50, it will head towards the next support level which is located at $24.25.

On the upside, the 50 EMA at $25.20 will likely serve as the first resistance level for silver. The next resistance is located at $25.30. If silver gets above the resistance at $25.30, it will head towards the next resistance level at $25.55. This level has been tested many times in recent trading sessions so silver will likely need additional upside catalysts to settle above $25.55.

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

Daily Gold News: Friday, Jan. 15 – Gold Still Going Sideways

The gold futures contract lost 0.19% on Thursday, as it extended its short-term consolidation following last week’s Friday’s sell-off of 4.1%. In late November the market has reached new local low below $1,800 price level. Since then it has been retracing the decline. Last week, the yellow metal got closer to its early November local high but then it has retraced the whole advance, as we can see on the daily chart ( the chart includes today’s intraday data ):

Gold is 0.1% lower this morning, as it is extending the short-term consolidation. What about the other precious metals? Silver gained 0.90% on Thursday and today it is 1.2% lower. Platinum gained 1.41% and today it is 2.5% lower. Palladium gained 1.09% and today it’s 1.0% lower. So precious metals are lower this morning.

Yesterday’s Unemployment Claims release has been worse than expected at 965,000. Today we will get the Retail Sales release at 8.30 a.m. The main number is expected to be unchanged vs. the previous one.

Where would the price of gold go following last week’s Friday’s Nonfarm Payrolls announcement? We’ve compiled the data since September of 2018, a 28-month-long period of time that contains of twenty eight NFP releases.

The following chart shows the average gold price path before and after the NFP releases for the past 28 months. The market was usually 0.37% higher on the 10th day after the NFP release.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for today:

Friday, January 15

  • 8:30 a.m. U.S. – Retail Sales m/m , Core Retail Sales m/m , PPI m/m, Core PPI m/m, Empire State Manufacturing Index
  • 9:15 a.m. U.S. – Industrial Production m/m, Capacity Utilization Rate
  • 10:00 a.m. U.S. – Preliminary UoM Consumer Sentiment, Preliminary UoM Inflation Expectations, Business Inventories m/m

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Silver Price Forecast – Silver Markets Showing Signs of Life

Silver markets have rallied just a bit during the trading session after initially gapping lower on Thursday. As we hang around the 50 day EMA, we are attracting a certain amount of attention and therefore I think it is likely to continue to be a market that is building up a case for a move to the upside. All things being equal, the market is going to continue to move based upon the idea of stimulus, which of course is going to be bigger than anybody ever anticipated. With Joe Biden talking about a potential $2 trillion worth of stimulus, one would assume that the US dollar would eventually suffer as a result, and of course the demand for silver in industrial use of this should continue to be strong.

SILVER Video 15.01.21

To the downside, I believe that the $25 level will continue to be important, and therefore I think that there will be plenty of buyers in that general vicinity. If we can break above the $26 level, it is likely that silver continues to go higher as well. Ultimately, the silver markets will probably go looking towards the $27 level, possibly even the $28 level. I have no interest in shorting silver, I do believe that longer-term it continues to go higher so on simply looking at dips as buying opportunities could be the way to go as well. Either way, I believe that this market will eventually find enough momentum to continue the previous uptrend that we had been in. Ultimately, I do think that we go back to the $30 handle.

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

Silver Price Daily Forecast – Silver Remains Stuck Between 50 EMA And 20 EMA

Silver Video 14.01.21.

Stronger Dollar Did Not Put Much Pressure On Silver

Silver  made an attempt to settle below the 50 EMA at $25.20 but did not manage to gain sufficient downside momentum while the U.S. dollar gained ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest resistance level at 90.50. If this test is successful, the U.S. Dollar Index will head towards the next resistance level at 90.70 which will be bearish for silver and and gold price today.

Meanwhile, gold is trying to get back above the $1850 level after an unsuccessful attempt to breach the support at $1830. If gold manages to settle above $1850, it will move towards the next resistance level at $1865 which will be bullish for silver.

Gold/silver ratio continues its attempts to settle below the nearest support level at the 20 EMA at 72.75. If gold/silver ratio manages to settle below this level, it will move towards the 72 level which will provide support to silver.

Traders will also focus on Biden’s stimulus plan which is set to be unveiled today. Additional stimulus is bullish for markets but it remains to be seen whether safe-haven assets like silver and gold will benefit from another round of money-printing or investors will continue to choose riskier assets which were in demand in recent trading sessions.

Technical Analysis

silver january 14 2021

Silver failed to develop additional downside momentum below the support level at the 50 EMA at $25.20 and remains stuck in the range between the 50 EMA and the 20 EMA at $25.75.

In this light, the technical situation has not changed materially compared to the previous trading session. If silver settles below the 50 EMA, it will gain downside momentum and quickly get to the test of the next support level at $25.00. A successful test of this level will open the way to the test of the support at $24.70.

On the upside, silver needs to get above the resistance at $25.55 in order to gain additional upside momentum and get to the test of the next resistance at the 20 EMA at $25.75. If silver manages to settle above the 20 EMA, it will head towards the resistance at $26.30.

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

Stocks Move Higher As Traders Focus On Biden’s Stimulus Plan

President-Elect Joe Biden Will Present His Stimulus Plan On Thursday

S&P 500 futures are gaining ground in premarket trading as traders wait for details of the new stimulus plan which is expected to be presented today.

Recent reports suggested that Joe Biden would present a stimulus plan worth $1.5 trillion – $2 trillion which would include $1,400 stimulus checks. Additional stimulus is bullish for stocks. If markets are encouraged by the new stimulus package, stocks will move to new highs.

Interestingly, expectations of more stimulus have not put any pressure on the U.S. dollar which continues to rebound against a broad basket of currencies. The stronger dollar may serve as an additional bearish catalyst for gold and silver which are already suffering from decreasing demand for safe-haven assets.

U.S. President Donald Trump Is Impeached For A Second Time But Markets Ignore It

Yesterday, U.S. House of Representatives impeached Donald Trump for a second time. Meanwhile, Senate Majority Leader Mitch McConnell stated that the Senate would not have an opportunity to vote on the issue before Trump leaves office.

Markets have remained very calm despite recent historic developments. Most likely, traders will focus on whether impeachment fight will interfere with the  vote on the new stimulus package.

President-elect Joe Biden has already stated that he expected that the impeachment process would not hurt urgent priorities. If the impeachment drama does not delay the new stimulus, markets will likely continue to ignore all developments on this front regardless of the ultimate outcome of the story.

Initial Jobless Claims Jump To 965,000

The U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports. The Initial Jobless Claims report indicated that 965,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 795,000.

Meanwhile, Continuing Jobless Claims increased from 5.07 million to 5.27 million compared to analyst consensus of 5.06 million.

The Initial Jobless Claims report was much worse than expected and highlighted the need for additional stimulus.

It remains to be seen whether the disappointing Initial Jobless Claims report will put any pressure on stocks as traders will likely remain focused on Biden’s stimulus plan.

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

Daily Gold News: Gold Price Fluctuates Ahead of Fed Talk

The gold futures contract gained 0.58% on Wednesday, as it continued to trade within a short-term consolidation following last Friday’s sell-off of 4.1%. In late November the market has reached new local low below $1,800 price level. Since then it has been retracing the decline. Last week, the yellow metal got closer to its early November local high but then it has retraced the whole advance, as we can see on the daily chart ( the chart includes today’s intraday data ):

Gold is 0.2% lower this morning, as it is further extending the short-term consolidation. What about the other precious metals? Silver gained 0.54% on Wedneesday and today it is 0.1% higher. Platinum gained 4.02% and today it is 1.4% higher. Palladium gained 0.88% and today it’s 0.2% lower. So precious metals are mixed this morning.

Yesterday’s Consumer Price Index release has been as expected at +0.4%.

The markets will wait for today’s Fed Chair Powell Speech. We will also get the Unemployment Claims release at 8:30 a.m.

Where would the price of gold go following last Friday’s Nonfarm Payrolls announcement? We’ve compiled the data since September of 2018, a 28-month-long period of time that contains of twenty eight NFP releases.

The following chart shows the average gold price path before and after the NFP releases for the past 28 months. The market was usually 0.37% higher on the 10th day after the NFP release.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Thursday, January 14

  • 8:30 a.m. U.S. – Unemployment Claims, Import Prices m/m
  • 12:30 p.m. U.S. – Fed Chair Powell Speech

Friday, January 15

  • 8:30 a.m. U.S. – Retail Sales m/m, Core Retail Sales m/m, PPI m/m, Core PPI m/m, Empire State Manufacturing Index
  • 9:15 a.m. U.S. – Industrial Production m/m, Capacity Utilization Rate
  • 10:00 a.m. U.S. – Preliminary UoM Consumer Sentiment, Preliminary UoM Inflation Expectations, Business Inventories m/m

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.
Sign up for our free gold, stock, and oil newsletter today!

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.