Gold - Do Not Disturb
Mark Mead Baillie | Jun 10, 2018 04:17AM ET
'Tis only perfectly apropos on the heels of last week's missive entitled All Quiet on the Golden Front that we acknowledge therein having completely overlooked the inclusion of our usual end-of-month chart featuring the "year ago-to-date" percentage track of gold vis-à-vis those of various key equities brethren. Not that we're in pursuit of an excuse, mind you, but when gold today (1304) sits not even 2% higher than where 'twas a year ago (1280), are we really missing out on anything, (other than the inevitable return to the 2805 "mean" per the debasing M2 money supply equivalent denoted in the above gold Scoreboard)?
As for those brethren, without further ado in quoting Jim Lange as he'd patently introduce his contestants on "The Dating Game" --(ABC, '65-'73):
"Heeerrre they Are!" wherein we've Newmont Mining (NYSE:NEM) +9.6%, the actually-positive Goldcorp Inc (NYSE:GG) +3.4%, gold itself +1.8%, the "look ma no leverage" VanEck Vectors Gold Miners (NYSE:GDX) -3.7%, Franco-Nevada Corporation (TO:FNV) -4.6%, and floundering about as ever in last place the Global X Silver Miners (NYSE:SIL) -16.2%, (the latter in turn justifying that the gold/silver ratio remains an excessively high 77.5x). And note with price ranges having sufficiently narrowed that we've now taken to quoting the percentage changes to the "tenth" rather than the "whole" number:
Moreover, "quiet a week on" continues to be gold's apt description. With price clearly having become unresponsive to any and all things, when looking at gold's EDTR ("expected daily trading range"), 'tis at the very least gone to sleep. Indeed, perhaps it has become entombed, (an apt description given that here in Monaco the title of its 2018 summer exhibition is "The Gold of the Pharaohs" featuring some 150 masterpieces on loan from the Cairo Museum). Gives quite the "gold has been money for many-a-millennia" meaning to our oft quipping "Hang onto your Gold!", through thick and thin.
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And oh how thin its trading range has been! To wit, below left is gold's EDTR ($10.40) from one year ago-to-date along with that below right for silver (20¢). gold having closed yesterday (Friday) at 1304 marks its 21st weekly settle between 1300-1350 for the 23 trading weeks year-to-date. Again as we've marveled so much of late, 'tis extraordinary how lifeless have become both gold and silver given so much otherwise price-influencing stuff goin' on out there:
Going next to gold's weekly bars, again the "good news" (if any) is price's not succumbing too deeply into the depths of The Whiny 1290s nor the Box (1280-1240). Still, we emphasize that gold's net weekly changes have been as slight as can be: thus far through the year's 23 weeks, gold has posted a net weekly change (regardless of direction) in excess of 2% only three times ... and more than half of the weeks have settled with less than a 1% net change either way. All about as exciting as Rip Van Winkle:
More broadly in turning to gold and its 300-day moving average as charted daily since price's All-Time Closing High, said average (1292) is essentially being retested right now. The 300-dma has not been materially tested and violated in practically a year, gold last July then getting beaten down into the low 1200s. But as we nonetheless stated a week ago, if gold is going to make a summer's up move, "now is the time":
As for the StateSide economy, the ever-popular Warren Buffett says 'tis "feeling strong". To be sure, the Economic Barometer was further boosted this past week by a reduction in April's Trade Deficit and a working down of Wholesale Inventories, along with a nice pop in the Services measure from the Institute for Supply Management. However, drags on the Econ Baro included a noted decline in April's Factory Orders along with a reduction in Consumer Credit (are they getting tapped out?), plus a downward revision to Q1 Productivity. Thus to the Oracle of Omaha, our recommendation is to stop "feeling" and instead "look at" the Baro:
Toward closing, here we've the precious metals' 10-day Market Profiles, wherein for gold (left) 1303 has been the most commonly traded price, and for Sister Silver (right) 16.70 is nearby support:
To be sure, these days sleepy old gold has put out the "Do not disturb" sign. Yet might nap time be nearly done? In having made several additional treks past the Monoeci offices, we've yet to therein see a wit of activity. Perhaps with much of the air having come out of the bits**t phenomena, they've rightly gone to lying low ... but 'tis really quite difficult to know. In any event, do know that 'tis all been kept in mind from your author's beloved writing perch over here. And 'tis just a matter of time before upside gold sees its way clear!
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