Yesterday afternoon a gigantic summer storm blew in, with high winds & rain & thunder & lightning, everything needed for a great show, but it also blew out our internet & email at my office & at home. That's why y'all received no commentary yesterday. Office remained internetless all day save a 20 minute respite, but at home the internet is smokin', almost as fast as dial-up.
FIRST, TWO MESSAGES:
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NEXT, let's review the damage done by Janet and her Dwarves yesterday.
Once again the Federal Reserve did its best to de-stabilize markets. Thru the curling lips and nasal whine of Janet Yellen the FOMC announced no move in its discount rate, and implied they're likely to raise it once later, this year. Yeah, sure, in a pig's eye.
Yesterday gold closed Comex at $1,285.80, up only 20¢, then as soon as Yellen pontificated, shot to $1,297. Silver had closed at 1748.9¢, only 7.9¢ higher than yesterday, but it jumped to 1762¢.
Janet managed to rabbit chop the US dollar index, too, talking it down 38 basis points (0.4%) to 94.66. Euro rose 0.46% to $1.1261, which no doubt was part of the reason behind the FOMC's flinching. They're scared of Brexit, scared just the anticipation of it can created a stampede out of euros & hasten its eventual centrifugal fate. Yen was flat at 94.34.
What will be the outcome if the UK votes to leave the EU? My guess is that the pound sterling would tank, although in the end Brexit will help the British economy. The euro would tank, probably never to recover. Refugee money would flow into dollars, yen, and gold. However, a sinking US stock market, which seems to lie close ahead in the future, would tug the dollar downward. Brexit would accelerate the trend begun more than a decade ago for gold to edge out the fiat currencies, as more and more the public views them as untrustworthy.
If the Brits vote no to Brexit, then short term the pound would rise along with the euro. But the euro rising at any time is like you attaching jumper cables from your car battery to a corpse. You can make it jump, but it ain't never coming back to life. Brexit failure would probably also pull money away from dollars, yen, and gold.
By the ways, the polls now show a majority favoring Brexit.
Markets were passing strange today. In what way? Dollar index shot way up, then closed up on 5 basis points. Intraday gold made a new 2016 high, but couldn't hold on there. In other words, all pop and no corn. All vine, no taters.
After a new high for the move at 95.54 & a huge jump for the day, the dollar retreated & closed up only five (5) basis points. Once again, the 95.50 resistance made it flinch & flee like Kryptonite. Ended below the 20 day moving average but above the 20. Six basis points less & it would have posted the first half of a key reversal. It is trying to advance, but just got sick at its itty tummy today. Behold the chart, http://schrts.co/2om5Sn
Euro nearly fell through bottom boundary of its rising trading channel & the 200 DMA not far below Ended down 0.29% at $1.1228. Yen gapped up today, probably marking the end of its run. Rose 1.64% to 95.89. http://schrts.co/UuqBFa
Gold was a mad dog this morning, raging to a new 2016 high at $1,318.90. Remained up over $1,306 from 3:00 a.m. Eastern (i.e., in European trading) but about noon began tumbling. Comex still closed up $10.30 (0.8%) over yesterday at $1,296.10, but in the aftermarket slipped below $1,280.
Here's the conundrum: A push to a new high intraday with a lower close makes the first half of a key reversal, but that's not exactly what gold did. It closed Comex HIGHER on the day, but on the End of Day chart closed lower. Volume was light years greater than yesterday. Chart, http://schrts.co/pI1ZgR
Today was not fatal to gold's rally, but must be made up tomorrow (if the rally is to continue) by closing higher.
Mumbling under his suspicious breath, some nat'ral born Tennessee fool is thinking that the Nice Government Men shore don't want that dollar to run away topside and leave the euro draining away down the sewer. Likewise they wouldn't want gold to run away. And was it coincidental that central bankers staged a tag-team jawboning match around the world, denouncing doom against Brexit, time zone by time zone? Globalists have a LOT riding on the FrankenUnion.
Ever more volatile silver reached a high of 1788¢ but in step with gold began falling Closed Comex 10.5¢ higher at 1759.4, but in the aftermarket right now is trading at 1727¢. Look, the chart, http://schrts.co/0csUZ9
Silver shows the same new high (although not highest in 2016) & lower close on big volume.
Silver is not running this train, gold is. If gold can recover tomorrow & close above $1,308, it will jump toward $1,350 & take silver with it. Nice Government Men would rather not see that happen, so there's a good chance it won't.
Meanwhile I want y'all to look at recent events in the U.S. & in the UK, & ask yourselves, "Is it real, or Memorex?"
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger