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

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turd [at] tfmetalsreport [dot] com ()

  307 Comments

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tyberious
Jul 31, 2016 - 10:51pm

We'er # 1

The U.S. Puppet Masters Are The Best In The World

Egon von Greyerz continues: “It seems like markets are also an illusion. How else can the Dow be 63% above the 2000 high whilst the Euro Dow 50 stocks are down 45% in the same period and with Emerging Markets down 36%, Brazil and Hong Kong down 35%, Nikkei down 25% and Shanghai down 49% all since 2014-15. We live in a totally interconnected global economy but there just seems to be more skilled illusionists in the US who can defy reality. With corporate profits declining fast, with current account and budget deficits for half a century, with 95 million people not in the workforce, almost 50 million on food stamps, with Q2 GDP at 1.2% (if real inflation rate was applied GDP would be negative) and with exponentially growing debts of over $200 trillion (incl. unfunded liabilities), you wonder what US investors are smoking.

https://kingworldnews.com/the-grand-illusion-80000-gold-and-a-worldwide-...

AlienEyes
Jul 31, 2016 - 10:49pm

tyberious

La PLATA, Si !

Interest rates.....I don;t think so.

The feds owe too much.

tyberious
Jul 31, 2016 - 10:40pm

Silver Price Forecast 2016:

Silver Price Forecast 2016: Silver and Interest Rates Will Rise Together

FractalSigns, Published on Jul 31, 2016
Silver Price Analysis: Silver and Interest Rates likely to rise together while the debt-based monetary system collapses.

Silver Price Forecast 2016: Silver and Interest Rates Will Rise Together
Compwiz4u
Jul 31, 2016 - 10:00pm

USDJPY

This is my latest take on the USDJPY:

Danforth Coxwell
Jul 31, 2016 - 9:12pm

Read the "TIC" report….

Yes China has been selling U.S. treasuries, and in large amounts!

surfeitndearth
Jul 31, 2016 - 9:02pm

FWIW... Election fraud?

Democracy Lost: A Report on the Fatally Flawed 2016 Democratic Primaries

Election Justice USA | ElectionJusticeUSA.org | ElectionJusticeUSA[at]gmail[dot]com

Download site: https://s000.tinyupload.com/index.php?file_id=05108427776978578336

Dyna mo humSound Money Minnow
Jul 31, 2016 - 8:58pm

@SOUND MONEY MINNOW THANK YOU

Glad to be here thanks to our host the Turd...

Fandango
Jul 31, 2016 - 8:47pm

Looks like the USD/JPY has done diddly squat.

Let's hope it stays down. Asian markets open in 45 minutes. Hopefully, gold and silver will win the day.

MRobFred Hayek
Jul 31, 2016 - 8:40pm

oops too true

Totally right I was being a tool. He was taking about dumping US treasury bonds, forget the US equities thing, I meant treasuries. Hey it's late over here... <cough>

Fed has numbers easy to find online showing major holders by country. Here it is

https://ticdata.treasury.gov/Publish/mfh.txt

canary
Jul 31, 2016 - 8:33pm

@JQuest...Thanks

What a nice surprise.

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5/26 10:00 ET Consumer Confidence
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5/28 8:30 ET Q2 GDP 2nd guess
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5/11 12:00 ET Goon Bostic speech
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