Christmas in July

307
Fri, Jul 29, 2016 - 9:47am

Well, we've spent the last two weeks making some bold predictions about the price of gold, the Bank of Japan and interest rates. Now here we are at the end of the month and things have unfolded almost precisely as we'd hoped. Won't it be fun to see what gifts August brings?

Time is short this morning such just a recap...

The BoJ did, indeed, "disappoint" overnight in the classic buy-the-rumor-sell-the-news style that we expected. The only oddity of it all was the almost NON-reaction in every other market. While the USDJPY fell over two points, S&P futures hardly budged, interest rates actually rose and the metals fell. HUH??

But all of that changed when the Q2 GDP numbers were announced earlier today and the "growth" shown was enough to even make Mr. Donut blush. Once again, all of the 8-figure WallSt dbs were off by an order of magnitude after predicting +2.4-2.6% and seeing the actual number come in at just a paltry +1.2%. The final level for Q1 was also cut back to just +0.8%. SOME ROBUST ECONOMY!

This finally sparked the metals as there is now hardly anyone left on Planet Earth who thinks that The Fed will raise rates again in 2016. All of this sets the stage for a return of Spec money and open interest to gold in August and, just as we've been forecasting, new 2016 highs.

And ponder this numbers as you go through the day...How many worthless blog posts and articles did you read in July that detailed how "the metals were overbought", "topping", "due for a pullback" and "ready to make new lows"? While 3-5% drops are never fun (yet part of the process), how about some month-end perspective:

Gold June 30: $1327 Gold now: $1351 Total change: +$24 or +1.8%

Silver June 30: $18.62 Silver now: $20.29 Total change: +$1.67 or +8.9%

Hmmm. Boy, that sucks. Just brutal. Those damn metals and all the charlatans that pump them. Gimme a break...

For the rest of the day, there's no sense in getting too worked up over the tick-by-tick stuff. Just let the day play out. The week will end and, more importantly, the month will end with green candles across the board and all of this sets us up for what should/will be a very interesting month of August. We've got another BLSBS next Friday and then that's about it. No FOMC till September. The BoJ is now done for a while. All that's left should be random datapoints and announcements that only serve to enforce the current environment of even lower rates and NIRP, strong metal demand and higher prices.

If you want something to pull for, keep an eye on gold. A monthly close north of $1350 would be nice. Perhaps more important is the Long Bond where a green candle and a monthly close above 173 would be cool. It closed June at 172-11.

Lastly, here are two bits of audio you might enjoy:

Have a great day!

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  307 Comments

cavalier
Jul 29, 2016 - 11:17am

Miners Look like a Freight Train

The miners look like a freight train coming down the tracks.

They look unstoppable.

AG plus 4 %

CDE plus 4.5%

PAAS plus 4%

EXK plus 3.5%

let's end the month up big!

Jul 29, 2016 - 11:24am

Btw

Prior to recording, I had a very fun discussion this morning with Eric re NEW GOLD and the complete, total douchebag who runs it.

Eric has a long history with this guy and can't believe he has a new job after basically destroying Barrick.

As we discussed last Friday, I'd sell that stock ASAP if I owned it...which I don't and NEVER will.

FireMedic76
Jul 29, 2016 - 11:27am

German Notes/Bonds and DB

German 10/20/30's are racing to the bottom and lower YET, DB and EUFN are up on the day! Euro bank stocks getting supported by a CB or a large buyer? A blind reach for hope that a last minute deal comes through to prop up Italian banks or that 'everyone' passes the stress test when it is released tonight?

Not making sense otherwise.

Compwiz4u
Jul 29, 2016 - 11:28am

JNUG

This is a follow up to my JNUG chart from July 27th where I said it had bounced off the bottom line of its pitch fork & was heading to $350+. It is in the $290s this morning & looking very strong.

matt_
Jul 29, 2016 - 11:30am

New Gold...

I don't own the stock, but I just looked that guy up. The man who runs New Gold was also elected chairman of the World Gold Council. That says a lot right there.

infometron
Jul 29, 2016 - 11:33am

@lund175 Re: Rye Patch Gold

My guess, and it is just a guess, is a friendly merger or acquisition.

infometron
Jul 29, 2016 - 11:35am

Re: New Gold anecdote

I played a round of golf about 2 years ago with a couple that were close friends with the CEO of New Gold. They were both so completely full of themselves, I decided there and then I wouldn't have anything to do with that company!

SilverHunter1985
Jul 29, 2016 - 11:36am

RE: Compwiz4u

I like your work I am thinking about subscribing to your newsletter.

canary
Jul 29, 2016 - 11:43am

FED members

Do they really hold a degree in economics?

JQuestFireMedic76
Jul 29, 2016 - 11:44am

@German Notes/Bonds and DB

" Not making sense otherwise "

My guess is it's BRUTE FORCE buying of equities by the European CB's.

The US PPT does the same thing when they have to which is very often.

JQ

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