A Slow Start. A Fast Finish?

269
Mon, May 6, 2013 - 10:56am

Sort of like my new favorite horse, the week is starting slow with London closed today. However, a strong move mid-week and a fast finish down the stretch may be in store. Let's get started! Go, Orb. Go!!!

However, before we can make any kind of sustained move, we must first pass a wall of horses in front of us. In gold, the evil and nasty competition has placed a barrier on the chart at $1480-1485. Clearing that level will hold the key. The psychological resistance of $1500 might also slow our pace but we should pass that nag without too much trouble. IF we can pull off this kind of rally, we'll set ourselves up for a stretch duel with the all-important and critical level of $1525-1530.

You've heard me mention countless times how support becomes resistance and vice versa. Well, the impending Battle of 1525 will be a grandiose version of that principle. Recall that gold was held for 19 months between $1525 and $1800. The $200, 2-day collapse only occurred once gold was broken down and out of that range. Getting back through and above $1525 would prove the entire episode to be a paper charade fakeout and the shorts will do just about anything to prevent this from happening. The fun part for race fans is this: It is where we're headed! I might be too optimistic to expect hope that we will be there by the end of this week or early next but we'll see. I, for one, am going to position myself down by the rail so that I might have a perfect view of the action.

The old, gray mare just ain't what she used to be but she's still in the race and she faces a similar path to the wire. The Forces of Darkness have laid down a line of resistance at 24.50. Why there, you ask? Why not? It's as good a place as any and, as of today, it also coincides with the 20-day MA of the July silver contract. Ahhh, whatever. It is what it is and I think it will fail, too. IF I'm correct about this, and silver is able to move through the April 25 peak near $24.80, a little tap of the whip should be all it takes to send silver surging to the front and its own Battle of 26. Just like gold, silver was held for 19 months between $26 and $36. Getting back above $26 is now primary target #1. Can it? Will it? We'll see.

Three bits of reading to start your week. First, there's this from Alasdair Macleod: https://www.goldmoney.com/gold-research/alasdair-macleod/the-case-against-deflation.html. Next, this brief article from Hugo Salinas-Price on the 2-day beatdown of last month: https://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=210 And there there's this excellent piece from Jeff Nielson where he estimates China's gold reserves to be over 4,000 mts. I think he's still a little low, but, regardless...https://www.bullionbullscanada.com/gold-commentary/26166-chinas-real-gold-reserves-at-4000-tonnes

Finally, my horsey "Orb" has inspired me to start a new Hat Contest! Here are the rules:

  1. Predict the kitco chart closing price of gold and silver for Friday, June 7.
  2. To win, though, each winner must also predict whether or not ole Orb will win The Triple Crown, the third leg of which will be run the following day at Belmont Park outside of NYC.
  3. As usual, please use the comments section of this thread for your guesses. I'll close this thread to new comments/guesses at 10:00 am EDT tomorrow.

Have a great day!

TF

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  269 Comments

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Adolf_Hitler
May 7, 2013 - 9:13am

@Mr Fix

Back in 2008, it took us 2-3 months to consolidate at the bottom. A V-shape bottom is very rare. I highly doubt Texas Sandman's "gold and silver will experience an exponential rise from now on" prediction. At best, we need to stay here for several months...

Mr. Fix
May 7, 2013 - 9:12am

I can certainly vouch for this story, it is what I do:

No Recovery Here Either: Home Renovation Spending Plummets To 2010 Levels

Submitted by Tyler Durden on 05/07/2013 - 08:17

One of the widely accepted misconceptions surrounding the so-called "housing recovery" fanfared by misleading headlines such as this "Remodeling activity keeps up positive momentum", which in reality has merely turned out to be a housing bubble in various liquified "flip that house" MSAs (offset by continuing deteriorating conditions in those places where the Fed's trillions in excess reserves have trouble reaching coupled with ongoing foreclosure stuffing), is that "renovation spending", the amount of cash spent to upgrade and update a fixer-upper, has surged. Sadly, this is merely the latest lie about the US economy: as the attached chart showing renovation spending in the past 6 months, it has absolutely imploded, confirming that not only is a broad housing recovery a myth (instead of localized pockets of bubbly liquidity here and there), but that the US home-owning household is now more tapped out than at any time in the past two years.

https://www.zerohedge.com/news/2013-05-07/no-recovery-here-either-home-r...

This is exactly why I started converting all of my savings into gold and silver, I saw this coming when no one wanted new houses anymore, and as a homebuilder, there was no work.

I went into renovations, fixing up all the old houses, many, just that so the owners could sell them.

Houses are not selling, and people are tapped out.

The renovation spending has dried up, I mainly do emergency repair work now.

It won't be long before people can't afford that either.

The economic collapse here in the North East, is beginning to pick up steam.

It still seems like very few can see the big picture, they know that they are broke,

but they do not realize that everyone else is also.

I've been hedging against this exact scenario,

this will not end well for most.

ag1969
May 7, 2013 - 9:04am

I'm watching it Mr. Fix

And I can agree with you the renovation spending drying up. You know what I do. I have not heard a peep from any of my dealers since the Friday before the Boston Bombing. Nothin'

Mr. Fix
May 7, 2013 - 9:01am

Is anybody else watching this?

Seems to me, the Evil Empire is not finished with us yet.

hai
May 7, 2013 - 8:59am
Chi-Town Deadhead
May 7, 2013 - 8:52am

Go to Derby

If I win the yellow hat, I will go to the Derby next year and wear it. It will put all the others to shame.

Ag: 21.49

Au: 1192. 78

Orb: Wins Preakness if it's a muddy track again but does not complete the triple Crown.

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

ChewYourOwnFaceOff
May 7, 2013 - 8:46am

Who needs a watch...

to know what time it is? Seriously.

achmachat
May 7, 2013 - 8:15am

contest

Gold: 3800 Silver: 150 No triple crown at that exact point, you will be able to get 20 Canadian gold Maples for each of your Canadian silver Maples mint boxes... Update regarding PM shortage in Europe: Most foreign 1oz Gold coins now need at least 3 weeks to get to the dealers from the wholesaler. Dealer confirmed that this has never happened before.

Pellet
May 7, 2013 - 7:32am

My Guess

I'll go with:

Gold 1980

Silver 32.5

no triple crown

I think something big will happen between now and June 7, but that could just as easily be a COMEX default as a gold spike. Gold will definitely start roaring at some point in time, but it is all in the timing.

Howard Roark
May 7, 2013 - 6:59am

About Musings on ships and rodents....

The reference to Plato's cave is adequate as an image of the cognitive dissonance of all of us. Not only the MSM, as some might think. The main idea is the condition we all share as living beings trusting our senses to gain an insight to world around us. Do not forget that Plato is a rationalist, so he would dismiss all the attempts of figuring out the "rational" beyond the PM's market (or any other) that look to what seems to be the "real objects", but are nothing more than "noise" or shadows on the wall. The trouble - in an existential tone - is that we are all slaves and ear and see nothing but "noise" thinking that see/ear the truth.

Some get to release themselves (people and communities such as this one) and "take a walk" on the bright side, where the sun (and the gold glitters!!!) shows all aspects of reality. But how do we know that the "sun is still shinning" and what we see is beyond the shadow of doubt? Can we escape the need to understand ourselves and the world around us? Or turn within and amuse ourselves with the ideas that we eventually find?

I am inclined to think (more with Aristotle) that we (each person) has the duty (and need) to get the knowledge and build ourselves and our life, liberty and happiness as men (man).

Salut,

HR

269 Comments on A Slow Start. A Fast Finish?

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Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

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