Steve Penny – Reviewing The Technical Price Charts For Gold, Silver, GDX, The Dollar, And Uranium Stocks
Steve Penny, Publisher of The SilverChartist Report, joins us to share a handful of key charts on Gold, Silver, GDX, the US Dollar, and (URNM) the Sprott Uranium Miners ETF. [all charts are posted below so you can follow along]
We also intermix some macro fundamentals and trading strategies into the discussion, and use the very oversold nature of the uranium mining stocks and ugly looking charts to discuss the difference between longer-term value investing as a contrarian investor in fundamentally sound oversold sectors or companies, versus short-term investing with the trend of momentum in a primary uptrend. Steve also discusses the importance of position-sizing, and to aware of sentiment extremes to the upside as well as the downside.
Click here to visit the SilverChartist website
Dan Oliver – March 15, 2023
“The Fed began hiking rates twelve months ago, and the question became: on which
balance sheets did the massive interest rate liability lie? Not those of the issuers: ever
more mortgages were issued by non-bank lenders who accessed capital through 15-day
facilities from money-center banks. Terms were so short because mortgages were flipped
immediately to Fannie Mae and the other quasi-government agencies. The agencies did
not bear the risk because they securitized the mortgages and issued MBSs to banks and
other investors. Large, money-center banks bought MBSs but tend to have a significant
amount of variable interest income from credit cards, business loans, and loans to
other institutions. They also aggressively hedge rate risk and tend to buy the highest
securitization tranches with the shortest maturities. Who was left with the interest
rate exposure, either directly or as counter-parties to hedging transactions? Insurance
companies, pension funds, shadow banks, and small banks.”
“Many have been surprised that nothing in the financial system had broken as rates
shot dramatically higher. Myrmikan did recently observe that FTX, an obvious fraud,
had managed to stagger on for six months after the Luna collapse ignited the cryptocontagion—a proper bank ought to be able to survive a lot longer than that, especially
since rates did not even break 3% until October…”
U.S. stocks fall as Credit Suisse adds more pressure to bank group
Liz Moyer – Investing.com – Mar 15, 2023
“U.S. stocks tumbled as Credit Suisse raised fresh concerns about the banking system. At 12:14 ET, the Dow Jones Industrial Average was down 669 points or 2.1%, while the S&P 500 was down 1.8% and the NASDAQ Composite was down 1.2%.”
“Credit Suisse Group (NYSE:CS) stock plunged 24% after the Saudi National Bank, a top investor, said regulations prevented it from being able to provide any more financial assistance to the Swiss finance firm.”
“At the same time, fresh economic data was stoking hopes for a less aggressive Federal Reserve. Retail sales fell 0.4% in February, a greater-than-expected contraction after rising 3.2% in January.”
Credit Suisse to borrow $54 billion from Swiss National Bank as it looks to shore up liquidity amid the banking crisis
Matthew Loh – Business Insider – Wed, March 15, 2023
“Credit Suisse said Wednesday it is borrowing up to 50 billion Swiss francs, or $53.68 billion, from the Swiss National Bank as its stock plunged this week amid fears it will default on debt.”
Oil Tumbles Below $70 As ‘All Hell Breaks Loose’ With Banking Crisis
Barani Krishnan – Investing.com – Mar 15, 2023
“The might of China and its COVID crisis couldn’t break oil’s $70 support. It had to take a banking crisis to do it.”
“U.S. crude’s West Texas Intermediate benchmark fell 7% or more on Wednesday, to below $70 per barrel the first time since December 2021, as the banking crisis that began with the collapse of mid-sized Californian lender Silicon Valley Bank now threatens Europe-based Credit Suisse Group (NYSE:CS) — one of the world’s preeminent names in investment banking.”
“All hell’s breaking loose in oil and it has everything to do with the U.S. banking crisis that’s now going global,” said John Kilduff, partner at New York-based energy hedge fund Again Capital. “There is something after all more potent than Chinese demand for oil — liquidity.”
“WTI, as the U.S. crude benchmark is known by its initials, fell to as low as $65.70 a barrel, marking a bottom not seen since December 2, 2021 when it touched an intraday low of $62.43. It eventually settled Wednesday’s trade at $67.61, down $3.72 or 5.2%.”
Meanwhile… despite all the carnage in general markets and the energy sector….
Gold was up on the day closing at $1931.30, even while the dollar ratcheted higher, with both garnering a safe haven bid.
Even Silver has had a nice surge higher from where it was trading just a little over a week ago down at $20 and then vaulting back over $22 (currently at around $21.94)
Those that were barking to sell everything in the PMs and go to Cash, back on March 7th, once again, bottom-ticked the low in the sector as perfect contrarian indicators. Gold hit $1813 that day and has since tacked on over $118. Gotta love it! 😉
Hope you don’t speak too soon, remember when Ukraine war started after things settle down gold gave up that rally.
This could be same situation, those banks just didn’t manage thier assets, now us tax payers have to bail all deposits, what good is having FDIC at $250k, we just keep speeding, oh yeah you gold bugs aren’t investing just in physical metals for protection you bugs are greedy and would love to have depression or have country destroy it’s currency or even hope for another war just to make money on high leveraged explorers your sick, your grand kids will pay for it in long run.
Good luck greedy bugs, hope you can leave with the destruction. It’s one thing to trade miners for cycle and invest to make good profit but you bugs been hoping for last few years for total crisis to get paid, blood money.
I like this line, “you bugs are greedy and would love to have depression or have country destroy it’s currency. LOL! It must have been the gold bugs who whispered into Nixon’s ear in 1972 to take The US dollar off the gold standard so we can destroy the economy and make a fortune investing in gold. You are funnier than “Shoe Polish Joe”. DT
Paul’s a bona fide dickhead.
Agreed DT. Paul and Joe are just here to insult the “bugs”, investors here, and the site. They are good comments for people to read as contrarian indicators of what not to do.
Paul I agree with you that it shouldn’t be the taxpayer’s burden to bail out bad businesses and bad banking risks, but I disagree with you on almost everything else.
Nobody here has been waiting for blood money to try to get rich, but gold is and has always been a hedge against financial chaos and global chaos. It is an uncorrelated asset within one’s investment portfolio that thrives during times of uncertainty, Clearly we are in very uncertain times, and that is precisely why gold and silver outperformed almost all other asset classes in 2022 during an overall uncertain and corrective year.
Most of us here at the KER forum have had many many years in the sector not just 3 years. To arbitrarily pick the top back in 2020 and suggest that’s where everybody bought and has been holding from, is a nonsensical argument and cherry picking. It makes for a convenient bash of the precious metal’s bugs as you have repeatedly done in the past, but it lacks all logic, since that is not where most of us were buying. In fact, just the opposite because in July of 2020 I was advocating trimming back positions because the BPGDM indicator was buried at a 100 for a few weeks straight.
Most of the people that follow the site have been stacking metals for decades from much lower prices thanwhere we are or have been for the last 3 years for that matter. In addition, many of us have been trading these resource stocks for well over a decade, or some folks for 2 or 3 decades. Nobody would do that if all they did was lose money. To look at only one period of time in isolation, (like the last 3 years) and extrapolate that trend out into everyone’s experience or performance is a huge error.
As for the comment about speaking too early… what in the world are you talking about?
It’s absolutely not too early to point out that gold has tacked on a $118, and Silver rallied 10% since Joe the bear was suggesting we all sell everything and go to cash just last week. That was clearly a bottom ticking call that he made just like the last half dozen he has made, and it was clearly the wrong action to have taken last week.
This was the exact same pattern Joe had on September 24th, which you and Jonsly praised as “right”… right before the gold miners started rallying the next trading session on September 26th for 4 months straight up double digits. On that same day, I was suggesting that the sentiment was way negative, the breadth was terribly oversold with the BPGDM being down in single digits, and with 100% of PM index stocks making new 52 week lows. I had clearly mentioned that I was accumulating into that weakness (which is what contrarian value investors do when they see inefficient markets).
As a reminder, yes Joe was making similar bearish claims at precisely the wrong time back in late 2021 and early 2022, when the PMs were oversold and ready to rally into their seasonal Q1 Run regardless, before the Ukraine conflict escalated. The PMs had already started rallying before that anyway, and that’s when the Fed was stopping their tapering cycle, so that was already going to give the PMs a boost. Smart and savvy investors had already picked up deals during tax loss silly season and were deploying cash into that year-end weakness, not selling at the wrong time to raise cash.
It was no different last week where smart and savvy investors were adding to very oversold positions, and definitely not selling to go to cash at exactly the wrong time. Technically the PMs were waiting for a catalyst to snap higher, and it just so happened the banking fiasco was that trigger. Oversold levels on the charts often precede news that validates a turn in direction after the fact.
I mentioned we were getting pretty oversold again and had been correcting for a while when Joe nailed the bottom once again with his misplaced bearish call. Something was going to break them higher regardless, and anyone that took advantage of the inefficient markets and was buying instead of selling just caught a nice rip higher. That’s the reality.
Look, anybody that knows anything about the cyclical commodities sector learned long ago that none of the commodities or resource stocks (be they gold, silver, platinum, copper, uranium, lithium, oil, or nat gas) are for buying and holding for decades or even many years. I’ve never advocated for that personally, nor have most of the guests we’ve had on the show. That also means I’ve not advocated being a bagholder in a stock or sector for years or decades. If a trade goes against one then the best policy is to admit it and take action. One should either decide to average down to lower their cost basis into an improved risk/reward setup, or to sell it for a loss and then find a better opportunity. There’s always another train leaving the station. So to assume everyone bought the top a few years back and just held is the height of ignorance and a strawman argument.
This sector is a commodity resource stock sector that is very cyclical and needs to be traded. One could have made an absolute fortune over the last 2 years just trading the exact opposite of Joe’s proclamations where he only comes on to troll the site and to troll the people that visit it because they appreciate the exchange of ideas here.
I agree Ex. I have not been waiting for blood in the streets. I have been waiting for Politicians to deal with their fiat currency and its inherent weaknesses. I have been waiting for the recognition by Politicians that metals in the ground are not a threat to a fiat currency any more than a dairy cow giving milk.
Is a producer of anything like say a garden hose supposed to wait for some bankers to trade with speculators to determine the price of a garden hose. Most bankers don’t know how to use a garden hose or its purpose. But if they decided it might water something that might grow because of the labor of another and threaten the value of a fiat currency, they may suppress the price of a garden hose, or gerrymander voter precincts, etc.
So I am waiting for recognition that metals in the ground contribute to society and meet a “demand” for many basic societal needs that exceed the perceived threat to worthless fiat currencies.
It cost money to find metals. It costs money to find simpler and more effective ways to find metals. It costs money to educate and train people to find metals. It costs money to develop a mine; invent, produce machines, train people, pay management and overhead to mine metals. So, I am waiting for there to be obvious and fundamental recognition that the finding and production of metals is a business that should determine its own costs of production and own pricing.
I am waiting for the end of price intervention in metals by governments, Central Banking, Regulators and Hedge Funds so a “market” can return to mining and fiat currencies are forced to stand on their own merit.
Looks like my thesis holds more water than a garden hose.
Good points Lakedweller2, and yes, a big part of the equation is the central banking monetary madness, and the other parts are the insane fiscal and social policies from politicians. One of the things people can do as they continually pile on debt and debase the fiat currencies globally in a race to the bottom is to have exposure to the precious metals sector.
That isn’t trying to capitalize on the woes of other and is not “greedy” as Paul described it… but rather prudent fiscal defense and the preservation of purchasing power in real money first the illusions of fiat. As for the resource stocks, it isn’t just gold stocks people invest in here or that we discuss, but also metals used in the improvement of the human condition like silver, copper, nickel, uranium, lithium, zinc, platinum, oil, nat gas, rare earths, etc…
You say that we are vultures waiting for a dead body to scavenge and that we are horrible people yet you insult us and in your mind you are justified as you are right, I agree with Matthew, you are a dickhead… thinking that since you are automatically right and we are wrong that you are justified in your hatred… do you also wonder what is wrong with the world today? Look in a mirror…
The yen bottomed with gold last fall but unlike gold it did so at a 32 year low. Still, it’s a good sign as the two are often well correlated directionally. It’s quite a “V” bottom so far and looks likely to stay that way…
There’s clearly a 7 year cycle in play:
BBB went from overbought to oversold in 13 weeks and is now just below the price BHP paid:
Gold is about to go mainstream. What a picture…
Yesterday Gary Savage said gold was going to 5K for sure, and maybe 10K. Peter Schiff said it was going to 10K or 20K. Rob McKewen says 5K. What is Jim Sinclair saying? I bought some BTG this morning.
FTX transferred $2.2 billion to Bankman-Fried via related entities, new managers say
Reuters – March 15, 2023
“Bankrupt cryptocurrency exchange FTX made transfers of about $2.2 billion to company founder Sam Bankman-Fried through related entities, the company’s new management said.”
“Overall more than $3.2 billion was transferred through payments and loans to company founders and key employees, FTX said in a statement on Wednesday.”
“These payments were made chiefly from Alameda Research hedge fund, FTX said, adding that it made these disclosures by filing schedules and statements of financial affairs with the bankruptcy court.”
“The crypto exchange said the transfers did not include over $240 million spent to purchase luxury property in the Bahamas, political and charitable donations made directly by the FTX debtors, and substantial transfers to non-debtor units in the Bahamas and other jurisdictions.”
Crypto Weekly: Signature Bank Signs Off
Reuters – Tue, March 14, 2023
“Another crypto-friendly bank is no more.”
“U.S. regulators stepped in to shut down Signature Bank on Sunday. As of September, almost a quarter of its deposits came from the crypto sector, though the bank had been trying to shrink that figure.”
“Now its collapse follows that of rival crypto-lender Silvergate and adds to the turmoil over the meltdown at Silicon Valley Bank.”
Crypto Exchange Binance To Halt Sterling Transfers
Elizabeth Howcroft and Tom Wilson – Tue, March 14, 2023
“Binance is halting its sterling deposits and withdrawals, a company spokesperson said on Tuesday, a month after the world’s largest crypto exchange ceased dollar transfers.”
“Binance has been informed by its partner for sterling transfers, Paysafe, that it would halt its services from May 22, the spokesperson said, impacting all Binance customers. Sterling transfers for new users were stopped on Monday, it said.”
It is stunning how corrupt and poorly managed the crypto exchanges and related financial institutions that cater to the crypto crowds have proven to be. This kind of mess has been going on for years, with almost a dozen smaller exchanges freezing funds, getting hacked, missing funds, or committing straight up fraud, and yet plenty of folks keep exposing themselves to all this risk inserting 3rd parties into scenarios where they claim they want to buy decentralized cryptos without the 3rd party risk of fiat currencies. All they are doing, if they don’t directly buy their cryptos and store them on digital wallets, is introducing all kinds of 3rd party risks. It’s nuts…
How Silvergate’s Crypto Collapse Differed From Silicon Valley Bank’s: No Bailout
Bradley Keoun, Helene Braun – Coindesk – Fri, March 10, 2023
“For all the angst this week about how troubles in the crypto industry are fueling a banking crisis, the reality, so far, is actually something else: Of the two banks that went under this week, the one squarely focused on crypto – Silvergate Capital’s (SI) Silvergate Bank – escaped the black mark of federal assistance.”
“It was Silicon Valley Bank (SVB), which has a weaker tie to digital assets, whose rapid collapse required Federal Deposit Insurance Corp. (FDIC) receivership.”
“Similarities have been drawn between the collapses of the two California-based banks – namely that both were hit by a flood of withdrawals, forcing executives to liquidate securities held as reserves. Those multibillion-dollar sales forced the banks to take big write-downs because the values of the portfolios had been eroded by rising interest rates over the past year. (When rates rise – and they have massively, with the Federal Reserve hikes – bond prices usually drop.)”
On the banking collapse theme…. Wasn’t just the funds in the US that were withdrawn ahead of the collapse
“There’s never just one cockroach.”
The “next crisis” is now here…and gold is doing its job in response.
Brien Lundin – Golden Opportunities – March 15, 2023
A Contagion On Many Fronts: For months I’ve been warning that we were headed for a reckoning.
“The Fed and other central banks couldn’t force-feed the most severe interest rate hikes in over four decades without causing severe damage to a global financial system that had been built upon the shaky foundation of zeroed interest rates.”
“I couldn’t tell you what was going to be the first domino to fall, although I suspected it would be the bond market, overseas real estate or the derivatives house of cards that Alan Greenspan warned me about.”
>> There were only two things we could be confident in:
1) Something would break, and…
2) We would want to own gold and silver when it did.
>> The last few days have checked off both of these boxes.
“Importantly, gold and silver are leaping higher again today as the collapse of Silicon Valley Bank has sparked a banking crisis not just in the U.S., but across the world.”
“So what now?…”
Has anyone listened to Larry Williams’ latest commentary on Stockcharts? He’s bullish on stocks but not so much on Gold.
WTIC, Eric Nuttall had a good point, the Canadian oil stocks are aggressively buying back their own shares and this price break will accelerate the process. I am still 40% cash 60% resource stocks in my pension fund with big divvys.
Annual Energy Outlook (14:00 NYT): https://www.eia.gov/outlooks/aeo/
Speaking of Credit Suisse, when is the “Derivative” problem going to come up.
DML, Dennison. Weekly 3 year…
AG has outperformed silver for the last 3 weeks:
CDE looks good too.
A agree Bonzo and bought some this week for the first time in possibly years. (I say “possibly” because I can’t remember for sure!)
Its action will improve dramatically as silver moves up.
I just checked and found I sold my CDE@ 28.75 in October 2012 and have not followed it since, so I know nothing about its mines or management anymore, but I like its chart. But I bought BTG this morning instead of AG or CDE. I made a killing in the old Bema Gold when it sold out to KGC, so I thought I’d give Bema2 and Clive Johnson another chance.
CDE just might fill the rest of Monday’s gap tomorrow making it a 2 percent better deal than today’s close. As mentioned recently, I’m satisfied with the AG exposure I get from SILJ so I won’t be buying any outright.
Daily SPY nearby resistance:
Steve’s GDX chart is nice and simple. With the bounce off of the 50 and the recent successful hold of the 200, it looks very buyable.
My nadsaq short got closed at a tiny loss (basically some slippage) and I covered my TSX60 short at a nice gain. I added to my short term positions in the gold majors and will hold that as long as GDX stays above the recent consolidation (I like the 20 day EMA to keep me in short term GDX trades).
At this point with banks having fun times I’m also going to make sure I have some extra gold positions for over the weekend. Announcements of bank runs and the like are usually done on Sundays and I think some extra gold price exposure is a good thing to have until we get a few weeks in a row without that sort of news. I thought about some shorts on financials, but gold covers the situation well enough.
Silver is interesting in terms of the giant triangle Steve talked about. I currently don’t have any silver exposure and we are sort of at a good point having just held the 200 day just like the GDX. Perhaps tomorrow I will find a silver position I like.
Brixton has probably put in an intermediate low:
I am ready for Brixton to go to the moon. Unfortunately it looks like Jackboot Joe, the Nord Stream Bomber, is going to start WWIII and become dictator, and we will never be allowed to profit from our gold and silver stocks.
TF Metals Report @TFMetals – Craig Hemke – 7:49 AM · Mar 15, 2023
“Silver Futures Chart… LOL”