Long-time readers of The Gold Update know we've hidden microphones in many a salient place, 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 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 5000! I vill be (as goes your expression) 'pushing up the 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 favorite 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!
Cheers!