Gold & silver closed the week by roaring back, stocks dithered, and so did the US dollar index.
Sometimes an idea takes your mind and shakes it like a terrier shaking a rat, & just won't let go. Lo, I check not often the London Interbank Offer Rate (LIBOR), one of the world's chief interest rate bell wethers. An analyst I watch for his cleverness mentioned today that libor has been rising, which must inevitably squeeze the Fed to raise interest rates -- or the market will do it for them. That might explain Fed mouthpiece Stanley Fisher making so much noise about raising rates; it's the Fed's way of making virtue out of necessity.
I went and looked at the Libor chart. Merciful heavens! Since mid-May the rate has risen 20-1/2%, from 0.4340 to 0.5230. Look for yourself, http://schrts.co/iy2uGR
Zooming out on that rascal, look at the last year, http://schrts.co/ai0FFe Sort of jumps out at you, don't it, that huge rise beginning mid-November 2015 until January 2016? The Fed is getting squeezed. Sort of has a satisfying gloat to it, don't it?
Gravely, this threatens the bond market bubble which the Fed & other central banks have blown up by suppressing interest rates. That would fling more shrapnel than any stock market crash. Wouldn't hurt silver & gold, either.
Stocks stretched hard and reached up to touch their 20 day moving average today, but the effort left 'em plumb tuckered out. Dow in gold hooked down -- at last -- and closed at 13.94 oz. Look at this vexed chart, http://schrts.co/KfbQmg Looks ready to resume downtrend.
Here is the chart of the Dow Industrials valued in silver, http://schrts.co/NssDGW
After the December high for the 5 year correction, the Dow in Silver has swum like a man in a suit of armor, down, down, down. Broke down out of a falling right triangle, then after an August low, corrected back up to the break out point. Smack! Made a final kiss good-bye, then tanked today, closing at 954.87 oz, just below the 20 day moving average.
Both these indicators stand on the verge of stepping off an eight story building.
Shucks, I forgot to give y'all paper dollar values for stocks. Dow added 72.60 (0.39%) to 18,491.96 while the S&P500 rose 9,12 (0.42%) to 2,179.98. Look at the S&P500 chart, http://schrts.co/vtdPMb
See that flat trading range since July, as if stocks were walking a plank? That could be a consolidation before moving higher, or a top. Y'all ever remember anybody who walked a planked & lived to tell the tale? Me neither.
US dollar index got an 18 basis point (0.19%) to 95.84 from the lying yankee government jobs report. I reckon the market interpreted the lower than expected but not really that much lower jobs numbers as pushing the Fed toward raising interest rates. Right in an election year, before the election. Hardly.
Euro has lost everything gained by its August rally, & then some. Down 0.09% today to $1.1189. Yen is in full retreat, down another 0.7% to 96.16.
On Comex gold rose $9.90 (0.8%) to $1,322.10 but silver skipped, sprang, vaulted 41.9¢ (2.2%) to 1927.6¢.
Gold chart may be found here, Gentle Readers, http://schrts.co/kh9gOy
The yankee government lying jobs report was all gold needed to pull on its 7 league boots & scat. 8:30 a.m. hit and it climbed straight up from $1,314 to $1,329 in one jump. High came at $1,334. Settlement at $1,322.10 was likely a beauty pageant, no make that an ugly pageant, to make gold look worse. Aftermarket saw it trading from $1,324.5 - $1,328.
Short words say all: bottomed yesterday.
Behold, the silver chart http://schrts.co/kh9gOy
Silver like gold benefitted from the yankee government's statistical largesse. Busted through 18.90 at 9:30 and jumped to 1930¢. All Wall Street echoed with retching as the shorts grabbed for a wastebasket to puke in.
Bottom's past for silver. Don't want to get on the wrong side of that.
Best support for that conclusion comes from the Gold/Silver Ratio. Lo, the chart, http://schrts.co/kh9gOy
Appears the correction of the March - July plunge has now ended. Obligingly the ratio closed below its 20 & 50 DMAs today.
About the only hostile witness is that gold close below $1,325. Tuesday (Monday's Labor Day) gold will have to prove that $1,325 is no more than a bead curtain.
One final confirmation from higher prices on Tuesday and no doubt will be left that silver & gold have completed their correction. Considering the heavy seas looming before stocks and interest rates, now is the time to buy silver & gold.
Henry Frederic Amiel was a Swiss philosopher born in 1821. He died in 1880. In his Journal Intime for 9 May 1870 he wrote,
"If liberty is to be saved, it will not be by the doubters, the men of science, or the materialists; it will be by religious conviction, by the faith of individuals who believe that God wills man to be free but also pure; it will be by the seekers after holiness, by those old-fashioned pious persons who speak of immortality & eternal life, and prefer the soul to the whole world; it will be by the enfranchised children of the ancient faith of the human race."
Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger