GoldSilverAnalyst
Short

Why You Can't See What's Right in Front of You

OANDA:XAUUSD   Gold Spot / U.S. Dollar
1-The uncertainty regarding the U.S-China trade war is still maintained in the market place. The U.S-China finalizing deal has been the center of attention for the market participants from months however the ongoing indecision and uncertainty regarding the matter has been very confusing for traders and investors.

2-The cold war gets escalated after the U.S government blacklisted the Chinese tech giant Huawei and in the response, China retaliated by threatening the U.S that they could stop rare earth exports to the US.

3-Trump last week tweeted about the possibility of imposing 5% of tariffs on Mexico, on 10th June if steps won't be taken by the Mexico government to stop immigrants coming from Central America.

4-You may have remembered the 10 year yield curve inversion happened for the first time on 2nd March 2019 since 2007 when a recession hits U.S. economy.well in may the yield curve between 10year and 3month treasury notes re-inverted after dipping in the march into negative territory for the first time since 2007. The curve has been inverted since May 23. Generally, the yield curve inverts when investors are worried about the long-term outlook of the economy, However inverted yield doesn’t cause a recession but reflects negative sentiment about growth.

5-AngloGold Ashanti announced plans to sell its last remaining gold mine in South Africa, the Mponeng mine southwest of Johannesburg, due to ore depletion. They told-we are now facing “peak gold” where gold production from here-on will keep falling.

6-Gold-Silver ratio is currently at its 26 years all-time high and we believe Silver prices are not likely to catch up to gold soon. To be precise The underperformance of the white metal implies that investors are still not convinced even after witnessing the tremendous rally which we have witnessed in the yellow metal,However as silver is a proxy of gold , silver prices could spike in a significant manner if gold will be able to break its long term key resistance in upcoming months.

7-Trump threat to Mexico for implementing the tariff, U.S China ugly trade war, hint by the U.S government that they could cut interest rate as soon as this summer, the 10-year yield curve inversion all are weighing on the U.S Stock indexes and benefiting the precious metal sector in a profound manner

8-we believe the yellow metal could easily climb $20-30$ from the level which it's currently trading at but today’s low-range close suggests the bulls are near-term exhausted and need to pause. You would need to keep in mind that our current existing position in the yellow metal is long term trading position where we have the ability to move our stop loss higher where it is placed now due to low risk and enormous reward nature of the transaction. On the flip side, we could see a lifetime opportunity for you to enter a short position if you want to add a long term position in your portfolio.

Please note-At the moment of writing this analysis short positions in both of precious metals are well active in our portfolio and we suggest you do so once market opens, however, keep in mind the yellow metal could easily climb $20-30$ from the level which it's currently trading at but today’s low-range close suggests the bulls are near-term exhausted and need to pause.

Related Ideas

Silver occurs naturally at about 19:1 so that's about where it should be valued. They can't raise interest rates, or they'll cause an equity sell off. They can't lower interest rates or they'll cause a spike in gold, with just the rumor of such a thing. If gold rises without silver rising, then the Gold:Silver ratio goes higher. At some point JP Morgan is going to have to let silver run, because the cost of covering COMEX silver shorts will just be too overwhelming. There are approx 700 paper promise contracts for every ounce of silver held in this nutty fractional reserve crap. If gold rises, and silver starts looking really tasty, we may be in for quite a global financial mess. When consumer, and industrial demand start looking for delivery of their paper promises, that silver will be nowhere to be found. Every bank on the planet will fail. That's likely this summer as the Deutsche Bank derivative conundrum comes home to roost. Who knew silver would become the buy of the century ? Silver IS the golden bullet at this point in the program.
+1 Reply
@michro11, if you a bull in precious metals complex then go with the shinny white metal that is one of the most undervalued assets any one would get and that's we advise others,all in all totally agree with you
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