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Will Gold And Silver Massacre Continue?

By Monica KingsleyCommoditiesAug 09, 2021 12:33PM ET
www.investing.com/analysis/will-gold-and-silver-massacre-continue-200597327
Will Gold And Silver Massacre Continue?
By Monica Kingsley   |  Aug 09, 2021 12:33PM ET
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Let's move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 and Nasdaq Outlook

S&P 500 And NASDAQ Combined Chart.
S&P 500 And NASDAQ Combined Chart.

The tightly tracking each other indices – S&P 500 and Nasdaq 100 – are likely to part ways to a degree soon. As Treasury yields made a double bottom, look for more tech to give way to cyclicals as they come back. Inflation, reopening trades and interest-rate sensitive spreads (e.g. financials over utilities) should start doing better.

Credit Markets

HYG, LQD And TLT Combined Chart.
HYG, LQD And TLT Combined Chart.

High-yield corporate bonds resilience is a good sign, and credit spreads likely to start widening again would confirm the continued, albeit questioned, economic expansion. It is not hiccup-free, but still continuing – unless the Fed tightens prematurely and too much. The market isn't worried about that at the moment.

Gold, Silver and Miners

Gold, HUI And TLT Combined Chart.
Gold, HUI And TLT Combined Chart.

Grim price action in the metals, and more is yet to come (looking at overnight price action). Gold and silver usually do better once the waiting for taper is over. The Bernanke experience is the right one to compare taper prospects to, but the Fed will have a much harder time mopping up the excess liquidity than it did in 2018. Commercial bank credit creation isn't still there to make up for lost central bank purchases. Gold is getting scared even as inflation isn't showing signs of retreating and real rates remain deeply negative. Only inflation expectations have been jawboned. As neither the miners-to-gold ratio nor TIPS signal panic, the only question is when the metals would stabilize and whether a fresh washout would occur or not. My view is that we're way closer to the pain's end.

Crude Oil

WTI And XOI Combined Chart.
WTI And XOI Combined Chart.

Oil staged another reversal, and it was intraday to the downside. How credible is that? Again, trading within the $60-$80 range, I‘m of the opinion that prices are interesting to the buyers here, as black gold got caught in the taper fears selloff just as gold, silver or copper did. Oil demand may be also coming under pressure due to all the restrictions even though APT doesn't signal its sharply rising odds (yet).

Copper

Copper Chart.
Copper Chart.

Copper retreated from its promising upswing, but its indicators are slowly turning positive. While it has mirrored the yields compression (signs of weakening growth/growth worries), it looks ready to gradually come back to life and play catch up with the commodity index.

Bitcoin And Ethereum

Bitcoin And Ethereum Combined Chart.
Bitcoin And Ethereum Combined Chart.

Resolute downswing rejection of Sunday‘s retracement in both Ethereum and Bitcoin. The bulls are on the march still. Cryptos have turned the corner very indeed. With so much bearish sentiment out there, the dips might be short-lasting and shallow.

Will Gold And Silver Massacre Continue?
 

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Will Gold And Silver Massacre Continue?

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Comments (8)
Haris Asd
Haris Asd Aug 19, 2021 12:33PM ET
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In my opinion Fed's signal of tapering is a good sign. The economies of the world compared to one year ago are much better and improving fast. So tapering is just confirming that. So buying the dip would be the next trading way.
George Pichurov
George Pichurov Aug 18, 2021 4:47PM ET
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Punch bowl replaced by punch blоw
George Pichurov
George Pichurov Aug 18, 2021 4:35PM ET
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Punch bowl replaced by punch ***
George Pichurov
George Pichurov Aug 18, 2021 4:34PM ET
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Can gladly add S&P in the title
Paul Barron
Paul Barron Aug 12, 2021 6:00AM ET
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Thanks pretty lady. Your the best. Lets see what happens
Robert Flores
Robert Flores Aug 09, 2021 3:11PM ET
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It is a great buying opportinity! The long term outllook couldnt be more bullish! But its useless to trade it- ill juat keep buying miners on dips!!Same for copper! Anything to hedge infation while investing in the future
Monica Kingsley
Monica Kingsley Aug 09, 2021 3:11PM ET
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Hello Robert, indeed it is - my yesterday's weekly chart proves that. Inflation broken? No way... So many more reasons for why gold is undervalued... (real rates)
Masti karo
Masti karo Aug 09, 2021 1:20PM ET
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Monica gold price expected?? please share
Monica Kingsley
Monica Kingsley Aug 09, 2021 1:20PM ET
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Hi Masti Karo - thank you - you mean this week? I think we had seen triple bottom, but more signs of strength need to happen for me to confirm that.
ELLIN Raul Pablo Jiackoni
ELLIN Raul Pablo Jiackoni Aug 09, 2021 12:39PM ET
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Thank you Monica, your articles are always necessary for the trade!
Monica Kingsley
Monica Kingsley Aug 09, 2021 12:39PM ET
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Thank you very much ELLIN! :)
 
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