Gold and Silver Current Thoughts 1-25-2015

In Thursday’s Current Thoughts I said I lean towards JDST  and it turned out to be the start of the day up 14.94% as gold took a hit. The daily red arrow for GLD and the mining ETFs was triggered but SLV is still green.

The Greek vote came in with the anti-austerity Syriza party winning the election but falling short of the percentage needed for an outright majority.

Tsipras, 40, will lead the first eurozone government to openly oppose bailout conditions imposed by the European Union and International Monetary Fund, seemingly setting Athens on a collision course with Brussels and particularly Berlin. The result had “made the Troika [the EU, IMF and European Central Bank] history,” he said.

In Asia gold has opened up a few dollars and silver up 10 cents.

Will be an interesting couple days on Wall Street as a big snow storm could keep many traders working from home. I expect to see light volume all the way around with no real U.S. data to trade coming out until Tuesday when we get Durable Goods, Services PMI, New Home Sales and Consumer Confidence. Then on Wednesday we have another Fed meeting and statement. Will this be the time they finally raise interest rates?

Personally I think the Fed will raise rates here at some point, possibly not this meeting but the next one as long as the stock market is doing well and the 10 year treasury rate is under 2%.  It’s yielding 1.76% now and has fallen for 4 straight weeks.  Doug Short has a great chart that shows how the Fed has kept rates artificially low since the financial crisis ended and the various Fed interventions in their attempts to stimulate the economy. The problem is, if the economy is doing so well, why are they keeping rates so low? Could the answer be that the economy isn’t really doing as well as people outside of the cheerleaders at CNBC think it is? I will be analyzing this more closely in my next article I will be putting up on the site this week.

 

 

I also wrote in Thursday’s report ” I have lots of questions on being so bullish with some unknowns over the weekend, so I would probably take profit for now and sit the weekend out. This is especially true if we gap up tomorrow.” If you sold TNA in the morning, you locked in some profit. TNA closed down a bit on the day where the DOW lost 141 points.

It will be interesting now to see how the ECB deals with Greece. For now, the Nikkei stock market has opened down and U.S. futures indicate a nice drop for the open. I will need to see how Monday trades before I get too bullish and advise to buy the dip. Too many unknowns right now.

UGAZ got a daily green after having a nice day on Friday finishing up 8.04%. We may get a continuation of this trend with the blizzard hitting the Northeast but the left half of the nation has had some nice warm weather so I wouldn’t marry the position.

UWTI hit lower lows again as the death of the Saudi King and evidently listened to Prince Alwaleed Bin Talal comments that “oil will never see $100 again.” He assured CNBC listeners that Saudi Arabia is not lowering the price on purpose to hurt the fracking industry here in the U.S.

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