gold opened the third decade of the 21st century last Monday at the price of 1908, then – (with a small seal of approval we would like to remember our demand 2401) – The next Wednesday the price had risen until 1962.
From there, extrapolating such a robust rise (+ 3.2% every three days) that gold would have reached ours 2401 Goal on February 4th. “Seal of Approval, Baby!”
But in truth: “Correction, baby!”
As a valued, experienced trade colleague of ours, he joked for many decades: “All gaps will be closed.” And for gold it actually did and then some when the price cascaded -3.4% yesterday (Friday) alone to settle around 1850 when the new decade started on the wrong weekly foot, with its net loss being -52 points . (Fortunately, there are 51 weeks left in 2021 to reach our gold target of 2401).
But everything is obviously great for the financial world as a whole. After all, the S&P 500 is at an all-time high. (Do you want to know it’s a “live” P / E? Wait for it …) The value of money (as it became the value of stock market profits) is clearly viewed as irrelevant. Totally unfounded bits ** t have now hit $ 40,000 (a veteran Wall Street analyst notes that one day there will indeed be an established, accepted “cryptocurrency”, but that there will be no bits ** t).
The all-wheel-drive battery company Tesla (with a price-performance ratio of now 1,554.3x) also ranks fourth in the S&P by market capitalization. Also, do you remember a few years ago when the S&P was “Nuthin’ but Apple “according to the cash flow? Today it’s “Nuthin”, but Tesla. “Write this down: 91% (” ninety-one percent “) of the net capitalization-weighted change in cash flow for the S&P 500 from Monday through Friday was Tesla’s share. Think about it: What is when the newly qualified StateSide “Green Squad” tries to remove batteries from the planet? “And the new Boeing 7 × 7 should fly exclusively with solar energy …”
Good ol ‘gold – an actual tangible currency – priced around 1850 today accounts for only 51% of its supply-adjusted dollar-discounted value of 3625, as we update weekly in the Gold Scoreboard above.
“Yes, what else is new, mmb …”
Squire! It’s great that you are coming back. Let us guess: snow removal in the Apennines? “Actually rescuing stranded snow removal equipment in the Dolomites, mmb …” (Why are we asking after all these years …)
However, our good colleague’s point is valid: nothing has changed. Gold remains reluctant to really roar despite the ultimately catastrophic currency devaluation, while the S&P 500 gains even less support the rising index, its “living” P / E at this writing (here it is) 83.5x before the Q4 earnings season, which starts in the new week. Again, don’t argue: do the math yourself.
Since we are running out of time this Saturday (you are the beneficiary as we post this piece 10 hours ahead of schedule), let’s quickly go through our key graphs, starting with the weekly gold bars from a year ago to date. And therein (let’s dare to say it last) the parabolic trend has finally turned to long after a 19-week stay as short. The fresh blue dot on the far right is there, but Gold’s end of the week makes for a pretty bad start to everything:
Then in almost ten years we will close the gold daily compared to the 300-day moving average. As you as a regular reader know, that average (111 points below current price) is the only technical negative that we have raised concerns about. This is more than mitigated, of course, as the price (as advertised) is 51% below our scoreboard rating level of 3625. Note the top line in the graph as our forecast 2401 high for this year:
As for the economic barometer, it is now in complete opposition to the S&P 500, which again has as extreme a rating as it was written a week ago: “It is terribly due to a massive crash” (we should think of Tesla as one cited A falling battery can be devastating to anyone along the way. Of economic significance, last week the trade deficit hit the largest gap in 14 years, while factory orders and construction spending slowed for the month. And in December job creation was instead a job shortage. Here’s the baro with the S&P (red line):
But don’t worry, luckily, the new voting member of the Federal Open Market Committee, Charles “ChiFedPres” Evans, is looking for a monetary policy that will remain accommodative for “long periods” (and we quote). That’s nice. Is everyone watching the US Treasury yield rise as it approaches 2%? It’s currently at 1.863%, compared to a return on the S&P 500 of just 1.465%. “Are you at risk?”
However, the precious metals did have some risk after starting the week / year / decade up for the first time. In the following graphic with two fields you can see the daily gold bars from three months ago on the left and the 10-day market profile on the right. Hardly the prettiest picture, but remember: the weekly parabolic trend has now moved to long. Bring the bargain hunters with you (please):
As for dear old sister Silver, the picture is quite similar. In her and Gold’s case, at least, deals on Friday were far from the lows:
That’s all a week ago with 15 incoming metrics planned for the Econ Baro. We’re on the way in 2021, and you know the long-standing adage, “How’s January going …” Maybe that’s the case with the Econ Baro as Bidenomics won’t help. But we hardly believe in the rising S&P. Let’s see if gold is on the way to the year after 2401 goes beyond the level of an inevitable falling S&P!
Take a look at our economic events today Economic calendar.
These items was originally published on FX Empire