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Gold & silver: correlations that matter

Commentaries & Views

July 18, 2023

  1. Are fiat and debt planet Earth's two main pillars of evil? 

  2. They likely are, and for a look at this evil in detail. While billions of citizens grovel for food, medicine, and education, their greedy governments inject themselves, and the citizens, with fiat heroin and debt cocaine.

  3. The wages of fiat and debt are the impoverishment, sickness, and ultimately the death of citizens, in an array of nations around the world.

  4. American citizens are told by their government that this horror can't happen to them.  They are promised that they are, "The Greatest!" and "Number Fiat One!".  They are told to shout these ego-infested slogans at the rest of the world, and a few of them are silly enough to do it.

  5. If the stock market goes up and the carnage from their government's wars stays out of the homeland… gullible citizens of the late-stage American empire believe the "Everything is awesome, and anything bad that happens is not our fault!" gibberish that they are spoon fed by their government.

  6. In the global gold community, these silly logans don't mean much.  It's gold versus fiat trench warfare, and on that note. Double-click to enlarge this US fiat chart. 

  7. While many analysts are excited about the "break" of the key 100 support zone, basis Edward/Magee, minor trend rallies often begin right after a new low is made…

  8. And that could be the case with the dollar right now.

  9. Double-click to enlarge this weekly chart.  Note that the dollar went to a new low, but gold didn't go to a new high.

  10. Double-click to enlarge.  The dollar index is mainly about the dollar and the euro.  Sometimes it correlates perfectly with the gold price… and sometimes not.

  11. Double-click to enlarge.  Gold and US interest rates are much more correlated than gold and the dollar.

  12. For another look at gold and rates. Double-click to enlarge. It appears that Fed boss Jay wants to do one hike next Wednesday (July 26), and then a couple more later in the year.

  13. If Jay holds to that path, gold likely continues its current rally against fiat until around September or October.

  14. Double-click to enlarge this important weekly gold chart.

  15. I would urge all gold bugs to focus on my 14,5,5 Stochastics oscillator at the bottom of the chart… and on next week's announcement from Jay.

  16. Gold is vulnerable in the short-term, but if Jay announces a significant pause in his hikes (as this chart suggests he will), a Stochastics crossover buy signal and a barnburner of a rally for gold is highly likely. 

  17. Double-click to enlarge this weekly T-bond chart.  Note the fabulous position of the Stochastics oscillator.  It's in perfect sync with the gold chart and my suggested path for Jay!

  18. What about the miners?  Double-click to enlarge this magnificent short-term GDX chart. 

  19. The miners could keep rallying from here, but a pullback is likely either before or as Jay makes his announcement. 

  20. The good news is that the pullback would create a right shoulder of a very nice inverse H&S bottom pattern.

  21. Also, note the solid position of the 10,25 Wilder moving averages.  The current buy signal would likely hold as a right shoulder forms.

  22. Double-click to enlarge.  The weekly GDX shows the Stochastics oscillator in the same fabulous position as for gold, and arguably a bit better.

  23. What about the silver miners?  Double-click to enlarge.  The weekly SIL chart is the best of the bunch. 

  24. A Stochastics oscillator cross is already in play, and it makes sense… as silver bullion has recently been even stronger than gold!

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.