Gold News Daily
4.10.18 – Gold Prices Primed for the Next Bull Run
Gold last traded at $1,345 an ounce. Silver at $16.59 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying and a weaker dollar. U.S. stocks rallied as trade war fears eased after Chinese President Xi Jinping discussed plans to open up the country’s economy.
Gold Prices Are Primed for a Bull Run –Money Morning
“Gold prices may have seemed volatile last week, but they’ve actually been trending steadily higher and are on the verge of a bullish breakout. And despite another run by the U.S. Dollar Index to challenge the 90.50 level – for the fourth time since mid-January – it proved too difficult once again. In fact, the dollar should have gotten even more help on Friday, as U.S. Federal Reserve Chief Jerome Powell gave his first speech on economic outlook since taking on his new position two months earlier. Powell said labor markets remained tight and that inflation was expected to rebound within the next few months, supporting further rate hikes. Instead, the dollar backed off, and gold maintained its strength as markets sold off hard once again….Gold has maintained its upward trendline, which has acted as support for new higher lows since late 2015. We also can see an upward trend channel, with the top line acting as overhead resistance. The top of that channel is near $1,400, which is certainly a threshold that’s likely to get a lot of observers excited about gold.”
Volatility Is Back. Scarred ETF Investors Aren’t –Wall Street Journal
“The case for buying into volatility is the best it has been in years. Rising interest rates, fears of a trade war and a rout in technology stocks have triggered big swings in U.S. stocks, a contrast after an extended period of market calm. The S&P 500 stock index has moved more than 1% on 10 of the past 15 trading days, while the Cboe Volatility Index, known as the VIX, is up 97% this year. The VIX ticked higher on Monday after the Dow Jones Industrial Average erased most of a 440-point gain following reports that federal investigators had searched the office and home of Michael Cohen, President Donald Trump’s longtime lawyer. The market swings have made investments that track Wall Street’s fear gauge among the year’s top performers….Despite those gains, exchange-traded products that profit from rising volatility have suffered more than $1 billion in outflows so far this year, according to FactSet. The funds have fallen out of favor in recent years as stocks climbed steadily higher and the VIX fell to record lows. ‘The fact that volatility can come into favor and fall out of favor very quickly has rightfully given investors pause when chasing these returns,’ said Todd Rosenbluth, head of ETF research for CFRA.”
“We Understand The Chinese Government Has Halted Purchases Of US Treasuries”: SGH –Zero Hedge
“According to the consultancy, SGH Macro Advisors, a long-time favorite of macro hedge funds, Beijing has twice threatened deliberately targeted tit-for-tat punitive measures against the US to date: ‘first, in response to the Trump Administration’s threat of steel and aluminum tariffs, and second, in response to broader measures aimed at $50 billion of products that lie directly at the heart of Chinese technology transfers, intellectual property violations, and strategic, ‘Made in China 2025′ plan.’ But even as US cabinet officials lined up yesterday to calm jittery equity markets, SGH says in a note released over the weekend that ‘China had already signaled an aggressive and potentially more ominous escalation in the developing trade wars to the White House: From what we understand, the Chinese government has halted its purchases of US Treasuries. Despite the direct encouragement, according to Chinese sources, by US Treasury Secretary Steve Mnuchin for China to stay put, Beijing has apparently discontinued purchases of US Treasuries for the past few weeks.’….While the report has not made it into the public arena, it is worth noting that 10Y nominal yields have barely moved on the news, rising from a session low of 2.78% to 2.80%, and are currently trading back with a 2.79% handle. Of course, should China proceed to announce that it is now a matter of official policy not to buy US paper, the adverse reaction will be far more aggressive.”
‘The Most Bullish Set Up for Silver that I Have Ever Seen’ –Mound/Street Wise Reports
“We now have the most bullish setup for silver that we have ever seen. After trading sideways/down for over 20 months now, investors have completely lost interest in it, which is, of course, the perfect breeding ground for a huge rally that seems to come out of nowhere….If you know what you are looking at the 8-year chart presents a much more encouraging picture. While this chart superficially looks boring and bearish too at first sight, on closer inspection we realize that a downsloping Head-and-Shoulders bottom is completing….Silver always tends to underperform gold at the tail end of sector bear markets, which is the reason why the silver-gold ratio that we will soon look at is so important….Silver gets cheaper and cheaper relative to gold, until an extreme is reached and the pendulum starts to swing back the other way with a new sector bull market….Conclusion: A major new silver bull market looks imminent that is expected to kick off with a dramatic spike, due to a wave of panic short covering.”
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