28 October 2015

Gold Daily and Silver Weekly Charts - US Dollar - Le Douleur Douce du Monde

I saw pale kings and princes too,
Pale warriors, death-pale were they all;
They cried—'La Belle Dame sans Merci
Hath thee in thrall!'

John Keats, La Belle Dame Sans Merci

Today was a classic.  It was like tuning in to an old Milton Berle show and hearing all the familiar jokes, pratfalls, and goofy faces.

Gold came in steady, near to unchanged from yesterday's close.  It was roughly the same for silver.

Both precious metals were jammed higher for no particular reason in the early morning trade in NY, late London.

And both were smacked lower on the 'hawkish' FOMC statement, although stocks were having none of it, not one bit.

The reason for the metals smack can be attributed to their pricing in the dollar cross, as the dollar caught a bid.  Not surprising since most of the developed world is busy cutting rates and trying to devalue for the sake of their economies, and the Fed is talking recovery, even though there really isn't any sustainable recovery evident just about anywhere.  I discuss the stronger dollar a bit today here.

Looking at the end of day we see that silver is slightly higher by about $.10, and gold is down about ten dollars from the close at yesterday afternoon.

I hope you were not caught up in today's exercise in perception management, unless you were a daytrader, in which case you are in God's hands.  Or something to that effect.

I have switched to my second scenario for the gold retracement, taking the intraday low around 1152 as a hit on that objective.

Today was all about the stronger dollar.   I would hope that the stronger dollar's effect on the price of gold and silver in dollars does not require an explanation.

One can also justify higher stock prices by thinking that it will encourage foreign investors to buy our dodgy paper at these fat valuations.

Personally I think it is a mistake to attribute much to these short term antics.   So I will be skeptical for now.

I do not think the Fed can afford to sustain this stronger dollar, especially since they are looking for an excuse to raise rates for policy reasons, ie they want to get off ZIRP so they can cut rates in the future when their latest paper asset bubble ends in yet another financial crisis, without having to resort to negative rates.

It is a hard policy choice to go lower than zero, especially with a well-armed, cantankerous population.

In other news, Deutsche Bank has checked itself into balance sheet rehab for the next two years.  Considering they are a pre-eminent global counter party risk, I suppose that could be interpreted as 'good news.'

There was also intraday viewing of the fruits of neoliberalism with Chris Hedges and John Ralston Saul here.

So let us see how things progress.   I have a feeling that today was a bit of bravado, but it is wrong to underestimate the willful resourcefulness of the white collar criminal class.

Have a pleasant evening.