Is The Powell Pop In PMs A Prelude To A 2018-2019 Scenario?

Craig Hemke, Editor of TF Metals Report, joins us to review the recent pop in the precious metals on the back of Jerome Powell’s press conference yesterday, and points out the similarities to 2018-2019 when the expectations and messaging were for the Fed to keep hiking aggressively,  only for them to pause, pivot, and start cutting rates in mid 2019.    We noted that Powell is simply doing what he said was the trajectory back at the September meeting, but markets interpreted his comments yesterday as having more of a dovish tone and signaling moderating the pace of the rate hikes starting December.   


Craig also points out that with this recent rally in both gold and silver, that they are quite close to taking out their 2021 annual closes at $1829 and $23.38 respectively.   Making a new annual closing high in 2022 is not something most market participants or technicians have been calling for, but it is in the realm of possibilities at this point.  Another potential mover could be China starting to open it’s economy back up in 2023, and that could be a tailwind for the commodities and PMs.   We wrap up discussing whether a rebound in the US dollar or interest rates, could end up reversing the recent uptrend in most markets, as well as looking forward at the jobs report tomorrow.  




Click here to visit Craig’s site – TF Metals Report

    Dec 01, 2022 01:46 PM

    ‘I’ve had a bad month’: Sam Bankman-Fried defends FTX collapse, deflects blame in bizarre interview he says went against advice of lawyers

    David Hollerith and Alexandra Semenova – Yahoo Finance – Wed, November 30, 2022

    “In a nearly 90-minute interview at the New York Times Dealbook Summit on Wednesday, disgraced FTX cofounder and former CEO Sam Bankman-Fried said he ‘didn’t try to commit fraud’ as his crypto empire collapsed in a matter of days earlier this month.”

    Speaking with Andrew Ross Sorkin remotely from the Bahamas, Bankman-Fried, known as SBF in the crypto world, stated: “I did not knowingly commingle funds” between FTX and the trading firm Almadea Research, which he also co-founded.

      Dec 01, 2022 01:48 PM

      My my my…. how quickly the media that doted attention on their crypto white knight, SBF, have done an about-face and are showcasing how he is now a disgraced leader in that sector.

      Heck, they’ve even given Tom Brady, Matt Damon, and Michael Saylor a hard time for the recent crypto crash, after they all had laser-eyes.

      The times… they are a changin’….

        Dec 01, 2022 01:54 PM

        Speaking of the times a changin’….

        Look at the PMs continuing to charge even higher, when so many were convinced were going to keep plumbing lower lows in a 2013 style selloff. The bears have been not-so-surprisingly silent on here lately. 😉

        Silver futures bottomed in early September at $17.40 and got up to $22.99 intraday today. (currently at $22.88). That is a far cry from the $16 or $14 levels many were calling for just 2 months ago by year-end.

        We mentioned a number of times that it was quite significant when Silver bottomed in early September, and then the mid-tiers gold and silver producers and larger developers bottomed from mid to late September, and continued ratcheting higher, even while the price of gold still was making lower lows up until early November. When mentioned it looked like a non-confirmation bottom playing out, and that is precisely how it’s played out.

        As for the yellow metal look at that move from $1618 intraday on November 4th to $1818 intraday today. That is a $200 move in just under a month, when people were suggesting that a test $1450 or $1375 were likely back on the table (when $1675 support broke). Nope.

        For those that were accumulating in the PM weakness a few months back, aren’t you glad you didn’t sell everything to go cower in cash?

    Dec 02, 2022 02:35 AM

    Craig Hemke – TF Metals Report @TFMetals 1:25 PM · Dec 1, 2022 – Twitter

    “There were 4,648 Dec22 silvers left open and “standing for delivery” back on Tuesday. That’s 23,240,000 ounces. This “deposit” into registered only covers about 10% and would appear to be actual, physical metal being shipped in. Comex stockpiles may even tighter than thought.”

    Dec 02, 2022 02:42 AM

    David Brady, is expecting this recent move in PMs to top out soon and roll over, but mentioned over on Steve Penny’s Silver Chartist blog that he intends to buy the coming pullback aggressively. I guess after such a big move higher in the PMs lately, some corrective action is in order. Maybe the job’s number will be a factor tomorrow on Friday to get the ball rolling. I may personally trim back a few positions that have really run a lot recently.


    Peak and Pullback Pending for PMs

    David Brady – Sprott Money – Dec 1st, 2022

    “Fed Chair Powell said a lot of things today. It was the most verbose speech I’ve heard from him. He said something for everyone, and my simple summary is as follows: Powell confirmed that interest rates will continue to rise but at a slower pace, starting with 50 basis points in December. This confirmed the pivot back on November 3. He also suggested that the terminal Fed Funds rate would be 5%, 1% higher from where we are today. More importantly, this provided an end point for this tightening cycle, even if rates remain high for some time to come, i.e., no rate cuts anytime soon. In a nutshell, the Fed will raise 0.50% twice or 0.50% and 0.25% twice, and then keep the Fed Funds rate at 5%. Markets were risk-on except for the dollar. Nothing new since November 3, and now the path higher is wide open for monetary metals and miners. But nothing goes up in a straight line.”

    “Gold held support at ~1735, and with some help from the Fed recently and a weaker dollar, it is on the verge of hitting its highest level since August. However, it is close to becoming extreme overbought, which suggests the rally is running out of steam and we’re due a pullback. That said, I would not be surprised to see a negatively divergent higher high first.”

    “Should Gold continue higher, it has the 200-DMA and the prior high of 1824 to contend with. Ideally, Gold takes out those two resistance levels, it becomes extreme bullish and overbought, and when everyone is looking up to 1900, down it goes again to the 1700s prior to take off.”

      Dec 02, 2022 02:22 AM

      Brady game plan sounds good. The signigficance of 1800 +/- for gold is obvious and key, if it recovers a break lower and closes above, then finally the seasonal period shows promise.

        Dec 02, 2022 02:44 AM

        I took out a JDST position today to hedge the long portion of my mining stock portfolio, as the PM stocks have been on a quite a run for the last 2 1/2 months, and I could see some corrective action in order over the next few weeks to 2 months. If I’m wrong and the miners keep blasting higher, then I’ve got plenty of upside exposure to the sector.

    Dec 02, 2022 02:52 AM

    (SVM) Silvercorp: My 2023 Outperformer Pick On Monetary Easing, Silver Fundamentals

    Zoltan Ban – Seeking Alpha – Dec. 01, 2022

    “Silvercorp Metals Inc. is an interesting long-term investment opportunity, with silver, gold, zinc and lead production, extracted at a profit, which can further improve on the back of higher future silver prices.”

    “Silvercorp’s stock price is currently down from a record high of over $8/share, to under $3/share, due to rising interest rates, as well as some temporary softness in silver market fundamentals. Both factors should reverse next year, making Silvercorp my 2023 outperforming stock pick.”

    Dec 02, 2022 02:31 AM

    (ORE) (ORZCF) Orezone Declares Commercial Production at the Bomboré Gold Mine

    1 Dec 2022

    “Orezone has declared commercial production at Bomboré based on achieving 30 consecutive days of mill throughput exceeding 70% of nominal nameplate capacity of 14,250 tonnes per day (“tpd”) and recovery reaching design levels of 90%. During November 2022, the mill processed 364,123 ore tonnes (12,137 tpd) at a recovery rate of 91%.”

    Patrick Downey, President & CEO commented, “Commercial production at Bomboré is a significant milestone and transforms the Company to producer status. We congratulate the Bomboré team for their excellent execution in achieving this goal. With our power supply issues now firmly behind us, we are focused on optimizing plant performance and steadily increasing throughput and availability with the objective of exceeding design capacity.”

    Dec 02, 2022 02:31 AM

    Not really up on yesterday’s green day. Let’s see how much I go down on a Gold red day. And we are off….

    Dec 02, 2022 02:22 AM

    I sold all of my Santacruz yesterday because of the timing of their bad news press release. I think there is many stocks that will do better, I am fully invested again and really like what I am seeing in silver. bought more KTN at lower prices.


      Dec 02, 2022 02:32 AM

      I liquidated 6 of my best performing positions today (Santacruz included) because I had plenty of tax losses to offset the gains in the half dozen I just sold.

      That does open me up to potentially missing any further gains over the next 30 days, but I plan on buying these stocks back the first week of January (or thereafter depending on their price action after Jan 3rd…).

        Dec 02, 2022 02:35 AM

        I may have lots of cash by the end of today also, I have many sell orders today.

          Dec 02, 2022 02:19 PM

          Yeah, it was hard to sell them with such a big recent up-leg in the markets, but I figured it’s Friday at the end of a bullish week in the PM sector, I’ve got the losses to wash out the gains for tax purposes, and some of the buying may get exhausted moving into the next few weeks, so I’m willing to take the gamble on missing gains in those handful of stocks, to have the cash on hand to redeploy if we see weakness in the sector, and again, I can always buy them back in early Jan.

            Dec 02, 2022 02:03 PM

            It’s never bad to take profits but I wish America would allow tax free savings accounts like we have in Canada and be done with tax loss season. There are enough drags on stock trading without having to be accountable for income tax reporting. DT

        Dec 02, 2022 02:00 PM

        … I’m seeing this funny colour on my screen… somewhere between blue and yellow… Oh well, maybe it will all go away soon!;-)

    Dec 02, 2022 02:57 AM

    One stock show for me today: Surge Battery Metals.

    Dec 02, 2022 02:38 PM

    I finally got tax loss worked out where I only needed $800 more loss. Then ended up over shooting so back into taking some profits. Maybe will carry over losses but probably try to max out losses at $3000 so I have the deduction. But, I am looking to add back to Emerita. I took my $78 gain in Santacruz as a start.
    Having good luck with Nine Mile, Surge Battery, Tectonic and Magna Mining not including the best luck with i-80.

    Dec 02, 2022 02:29 PM

    As usual, Doc has gone AWOL to visit the doctor. Might this signal a top??

      Dec 02, 2022 02:06 PM

      “Old folks just keep getting older”
      Jon Prine