Gold and Silver Outlook 12-04-2014

In today’s morning report I said I was somewhat bullish on gold. The dollar was getting hammered but gold was pretty flat all day and the miners just couldn’t get it going. Tomorrow may be a different story as long as gold can move above $1,208. I do still think the risk versus reward is on the side of being long gold and the gold miners right now but PLEASE NOTE, the weekly triangles are red again and I would keep a stop if we don’t get a bounce tomorrow. JDST on the break over $16.20 was the better play today. If you made that trade even after reading the morning report and stuck with the instructions of playing the higher high (trend), then you would have rode it to over $17 as JDST closed at $17.17.

National Debt Hits $18 Trillion

What went unnoticed by almost all the mainstream media a couple days ago was the U.S. national debt surpassing $18 trillion. Take a look at the screenshot (below) I took of my Google search of any news related to this debt milestone.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It amazes me how financial media just ignores debt. Congress ignores it too.  In fact, on MarketWatch there was an opinion piece that someone pointed out to me which actually claims “Why the U.S.’s debt is no longer such a big deal.” If you read the article the author, Howard Gold, who evidently runs a “no-nonsense investing” publication, needs to understand the difference between debts and deficits. Yes, the deficit is falling. No, the debt is increasing. We are paying higher taxes as part of the reason the deficit is falling but one of the main reasons is the artificially low interest rates the Fed has given us. The 10 year is only yielding 2.25%.  What happens when interest rates rise? Well, the CBO doesn’t account for that increase in their 10 year budget, lol. #lunacyafoot

More Thoughts on Gold

My father, who is a retired commodities trader from the CBOT and still follows the markets closely, receives good info from those who are still trading on the floor and from other places. Below is one of those comments he received that I happen to agree with.

The Dollar Index has moved higher in its ongoing uptrend, but the momentum of that has been waning since September…  There is nothing conclusive yet in the Dollar Index futures regarding a top — intermediate or otherwise. Perhaps something will develop in the closing weeks of the calendar year?   Washington DC is going through a change after the first of the year when the new Congress is seated, but what exactly that will mean for the Dollar is somewhat murky…   After all, it is the embedded bureaucrats who are increasingly running the country. They concoct the daily lies and spin for politicians to spout, not the politicians themselves, I think…  Plus, the Federal Reserve Board may have bigger clout than Congress on the fate of the Dollar and ancillary issues

But the Gold futures have put in a dramatic turnaround, at least in the daily charts…  see if that takes on bigger meaning this month and next…   It seems to me there is an active non-American influence in the discounting of Gold values that transcends Washington’s grasp.

From the Trading Desk

Gold and silver have followed up a wild start to the week with uninspiring trading action for the remainder of it.  While Monday had over 340,000 contracts trade on the active Comex February gold contract, today only had volume of 140,000 contracts.  The trading range also went from a very wide and volatile $80 on Monday to a boring $12 today.  The European Central Bank left rates unchanged and US Non-Manufacturing PMI came in at the second highest number since 2005.  All of this translated to a bullish signal for the USD which weighed on the precious metals.   Gold perfectly touched resistance at $1,213.50 today, the fifth point in a five point downward trendline basis the February gold contract.  It appears that the yellow metal will need USD weakness in order to break through this increasingly significant resistance point.   Silver is once again trading without conviction and was capped at its 50 day moving average of $16.67.  Support still remains at $16 for the short term.