End Of A Memorable Year…

December 30, 2020

. . . for the wrong reasons. Normally, this issue would be a preview of what could be expected in the new year. This time around the future is badly out of focus, as if one with poor eyesight is looking at a distant vista wearing his reading glasses. The final outcome of the US presidential election – despite any wishes and hopes – is not yet certain; much can still happen as some key institutions and people change their stances or allegiances to try and anticipate what will happen. One thing is certain: it has been a very long time since the future was so uncertain.

There are probably more than six COVID vaccines being used to vaccinate people or that soon will be in use. It is too early to say what their efficacy will be and whether they will have too many instances of side effects that will put people off from taking the vaccine. Success in preventing the spread of the virus will not happen overnight and in the meantime the high infection rate and associated deaths will continue, at least until enough people are inoculated to reduce infections and to eradicate the pandemic. 2021 will be more than a few weeks old before progress on a national scale will become visible.

There has been a five month period of severe depression of the prices of gold and silver. As commented before, the possibility of profitable OTC contracts, primarily in gold, could be one reason for this effort to keep the price well below $1900, other than the attack late in November to spoil the party for owners of COMEX December options and futures, which was done successfully from the sellers’ perspective. It is now up to 2021 to reset the rules of the game and hopefully to do so in favour of the bulls, for a change.

2020 has been one of the most eventful years since the end of WWII and perhaps globally the most eventful one outside of the years of global warfare. 1918 saw the Spanish Flu, which was worse than COVID – so far. That year saw the end of WWI, but 2020 saw the gulf between the US and China widen to where there are lines being drawn in the sand. Internally, the US is more divided than it has been since 1876. Will 2021 will be an improvement?

Euro–Dollar

The euro initially could not hold within the steep bull channel KL. The break below the channel also broke below channel BC, but the euro later recovered back above line C. The odds for the euro to break back into the steep channel are slim; it has fallen quite far behind. If that could be achieved, it will signal sustained dollar weakness rather than euro strength. The next best for the euro will be a break above line P in due course.

Euro–dollar, last = $1.2247 (www.investing.com)

DJIA Daily close

DJIA, last = 30335.67 (money.cnn.com)

The DJIA achieved another new all-time high on Monday, 28 December and it is now within touching distance of the top of bull channel ABCD at 30 570. It has two more days to achieve this target during 2020 and all of 2021 to set many more new all time highs – should the null market continue.

Gold London PM fix – Dollars

The sustained pressure during the past four weeks to keep the price of gold well below the $1900 level supports the suspicion that other than the December futures there could be major OTC contracts that expire on the last day of the year. Should the bull market resume early in January to break above this level, that would act as confirmation that some wealthy investors have also been fleeced by the Cartel.

While they should in many cases still make a profit, it will not be nearly as much as they were looking forward to by the middle of the year. It is only after the August 2021 contract that the futures prices rise above $1900. Will the prices be kept this low into 2021 and risk many new positions being opened at these low prices? Or will the pressure suddenly be released to allow the prices to speedily reach the next ceiling to be defended, close to the $2000 level?

. . . for the wrong reasons. Normally, this issue would be a preview of what could be expected in the new year. This time around the future is badly out of focus, as if one with poor eyesight is looking at a distant vista wearing his reading glasses. The final outcome of the US presidential election – despite any wishes and hopes – is not yet certain; much can still happen as some key institutions and people change their stances or allegiances to try and anticipate what will happen. One thing is certain: it has been a very long time since the future was so uncertain.

There are probably more than six COVID vaccines being used to vaccinate people or that soon will be in use. It is too early to say what their efficacy will be and whether they will have too many instances of side effects that will put people off from taking the vaccine. Success in preventing the spread of the virus will not happen overnight and in the meantime the high infection rate and associated deaths will continue, at least until enough people are inoculated to reduce infections and to eradicate the pandemic. 2021 will be more than a few weeks old before progress on a national scale will become visible.

There has been a five month period of severe depression of the prices of gold and silver. As commented before, the possibility of profitable OTC contracts, primarily in gold, could be one reason for this effort to keep the price well below $1900, other than the attack late in November to spoil the party for owners of COMEX December options and futures, which was done successfully from the sellers’ perspective. It is now up to 2021 to reset the rules of the game and hopefully to do so in favour of the bulls, for a change.

2020 has been one of the most eventful years since the end of WWII and perhaps globally the most eventful one outside of the years of global warfare. 1918 saw the Spanish Flu, which was worse than COVID – so far. That year saw the end of WWI, but 2020 saw the gulf between the US and China widen to where there are lines being drawn in the sand. Internally, the US is more divided than it has been since 1876. Will 2021 will be an improvement?

Euro–Dollar

The euro initially could not hold within the steep bull channel KL. The break below the channel also broke below channel BC, but the euro later recovered back above line C. The odds for the euro to break back into the steep channel are slim; it has fallen quite far behind. If that could be achieved, it will signal sustained dollar weakness rather than euro strength. The next best for the euro will be a break above line P in due course.

Euro–dollar, last = $1.2247 (www.investing.com)

DJIA Daily close

DJIA, last = 30335.67 (money.cnn.com)

The DJIA achieved another new all-time high on Monday, 28 December and it is now within touching distance of the top of bull channel ABCD at 30 570. It has two more days to achieve this target during 2020 and all of 2021 to set many more new all time highs – should the null market continue.

Gold London PM fix – Dollars

The sustained pressure during the past four weeks to keep the price of gold well below the $1900 level supports the suspicion that other than the December futures there could be major OTC contracts that expire on the last day of the year. Should the bull market resume early in January to break above this level, that would act as confirmation that some wealthy investors have also been fleeced by the Cartel.

While they should in many cases still make a profit, it will not be nearly as much as they were looking forward to by the middle of the year. It is only after the August 2021 contract that the futures prices rise above $1900. Will the prices be kept this low into 2021 and risk many new positions being opened at these low prices? Or will the pressure suddenly be released to allow the prices to speedily reach the next ceiling to be defended, close to the $2000 level?

Gold price – London PM fix, last = $1874.30 (www.kitco.com)

Euro–gold PM fix

Euro gold price – PM fix in Euro. Last = €1528.49(www.kitco.com)

The euro holding firm and with the gold price under pressure, the euro price of gold dipped lower to just hold within the megaphone JF. Hopefully the chart pattern will hold to see the euro price off to a good start in 2021.

Silver Daily London Fix

Silver daily London fix, last = $26.15 (www.kitco.com)

Silver is being more resilient or more stubborn than gold and has held on well above line G after the break into channel AB. The pull back to below $26 was immediately followed by a bounce higher to form a double top at the level where it was knocked lower earlier. It will be a positive signal if the price could move higher above the double top and perhaps to launch a challenge on line R – while holding above line G.

U.S. 10–year Treasury Note

U.S. 10–year Treasury Note, Last = 0.940%

From the way the yield on the US 10-year Treasury note is holding – being held? – safely short of the psychologically important 1% level, one might guess that the Fed is fully aware of the effect on the markets should the yield rise above 1%. A breach to above that level will raise spectres of 2%, 3% and, heaven forbid, 5% at a not too distant time in the future.

It would seem that whoever sits in the White House when the election dust settles, the COVID pandemic will result in more multi-hundred dollar grants to individuals, households and many businesses. Money will be printed hand over fist.

There are already people shouting, “Inflation! Inflation!” and the longer the handouts continue the more strident their calls will become. Until, as will happen in time, inflation can no longer be concealed by the algorithms used to keep official inflation below the increases in the cost of living.

West Texas Intermediate crude. Daily close

The potential prospect of higher rates is joined by the rising price of crude to cause a sense of nervousness among investors and economists. And also in government circles. Holding closely around line Y is a warning of how easily the price can break higher to bring more than a whiff of inflation.

WTI crude – Daily close, last = $48.24 (www.investing.com )

May all readers and their families enjoy a sparkling 2021 that brings them peace, prosperity and above all, good health.

Gold price – London PM fix, last = $1874.30 (www.kitco.com)

Euro–gold PM fix

Euro gold price – PM fix in Euro. Last = €1528.49(www.kitco.com)

The euro holding firm and with the gold price under pressure, the euro price of gold dipped lower to just hold within the megaphone JF. Hopefully the chart pattern will hold to see the euro price off to a good start in 2021.

Silver Daily London Fix

Silver daily London fix, last = $26.15 (www.kitco.com)

Silver is being more resilient or more stubborn than gold and has held on well above line G after the break into channel AB. The pull back to below $26 was immediately followed by a bounce higher to form a double top at the level where it was knocked lower earlier. It will be a positive signal if the price could move higher above the double top and perhaps to launch a challenge on line R – while holding above line G.

U.S. 10–year Treasury Note

U.S. 10–year Treasury note, last = 0.940% (www.investing.com )

From the way the yield on the US 10-year Treasury note is holding – being held? – safely short of the psychologically important 1% level, one might guess that the Fed is fully aware of the effect on the markets should the yield rise above 1%. A breach to above that level will raise spectres of 2%, 3% and, heaven forbid, 5% at a not too distant time in the future.

It would seem that whoever sits in the White House when the election dust settles, the COVID pandemic will result in more multi-hundred dollar grants to individuals, households and many businesses. Money will be printed hand over fist.

There are already people shouting, “Inflation! Inflation!” and the longer the handouts continue the more strident their calls will become. Until, as will happen in time, inflation can no longer be concealed by the algorithms used to keep official inflation below the increases in the cost of living.

West Texas Intermediate crude. Daily close

The potential prospect of higher rates is joined by the rising price of crude to cause a sense of nervousness among investors and economists. And also in government circles. Holding closely around line Y is a warning of how easily the price can break higher to bring more than a whiff of inflation.

WTI crude – Daily close, last = $48.24 (www.investing.com )

May all readers and their families enjoy a sparkling 2021 that brings them peace, prosperity and above all, good health.

********

78 percent of the yearly gold supply--is made into jewelry.

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