first majestic silver

Gold - Do Not Disturb

Market Analyst & Author
June 10, 2018

'Tis only perfectly apropos on the heels of last week's missive entitled "All Quiet on the Golden Front" that we acknowledge therein having completely overlooked the inclusion of our usual end-of-month chart featuring the "year ago-to-date" percentage track of Gold vis-à-vis those of various key equities brethren. Not that we're in pursuit of an excuse, mind you, but when Gold today (1304) sits not even 2% higher than where 'twas a year ago (1280), are we really missing out on anything, (other than the inevitable return to the 2805 "mean" per the debasing M2 money supply equivalent denoted in the above Gold Scoreboard)?

As for those brethren, without further ado in quoting Jim Lange as he'd patently introduce his contestants on "The Dating Game" --(ABC, '65-'73):

"Heeerrre they Are!" wherein we've Newmont Mining (NEM) +9.6%, the actually-positive Goldcorp (GG) +3.4%, Gold itself +1.8%, the "look ma no leverage" VanEck Vectors Gold Miners exchange-traded fund (GDX) -3.7%, Franco-Nevada (FNV) -4.6%, and floundering about as ever in last place the Global X Silver Miners exchange-traded fund (SIL) -16.2%, (the latter in turn justifying that the Gold/Silver ratio remains an excessively high 77.5x). And note with price ranges having sufficiently narrowed that we've now taken to quoting the percentage changes to the "tenth" rather than to the "whole" number:

Moreover, "quiet a week on" continues to be Gold's apt description. With price clearly having become unresponsive to any and all things, when looking at Gold's EDTR ("expected daily trading range"), 'tis at the very least gone to sleep. Indeed, perhaps it has become entombed, (an apt description given that here in Monaco the title of its 2018 summer exhibition is "The Gold of the Pharaohs" featuring some 150 masterpieces on loan from the Cairo Museum). Gives quite the "Gold has been money for many-a-millennia" meaning to our oft quipping "Hang onto your Gold!", through thick and thin.

And oh how thin its trading range has been! To wit, below left is Gold's EDTR ($10.40) from one year ago-to-date along with that below right for Silver (20¢). Gold's having closed yesterday (Friday) at 1304 marks its 21st weekly settle between 1300-1350 for the 23 trading weeks year-to-date. Again as we've marveled so much of late, 'tis extraordinary how lifeless have become both Gold and Silver given so much otherwise price-influencing stuff goin' on out there:

Going next to Gold's weekly bars, again the "good news" (if any) is price's not succumbing too deeply into the depths of the Whiny 1290s nor the Box (1280-1240). Still, we emphasize that Gold's net weekly changes have been as slight as can be: thus far through the year's 23 weeks, Gold has posted a net weekly change (regardless of direction) in excess of 2% only three times ... and more than half of the weeks have settled with less than a 1% net change either way. All about as exciting as Rip Van Winkle:

More broadly in turning to Gold and its 300-day moving average as charted daily since price's All-Time Closing High, said average (1292) is essentially being retested right now. The 300-dma has not been materially tested and violated in practically a year, Gold last July then getting beaten down into the low 1200s. But as we nonetheless stated a week ago, if Gold is going to make a summer's up move, "now is the time":

As for the StateSide economy, the ever-popular Warren Buffett says 'tis "feeling strong". To be sure, the Economic Barometer was further boosted this past week by a reduction in April's Trade Deficit and a working down of Wholesale Inventories, along with a nice pop in the Services measure from the Institute for Supply Management. However, drags on the Econ Baro included a noted decline in April's Factory Orders along with a reduction in Consumer Credit (are they getting tapped out?), plus a downward revision to Q1 Productivity. Thus to the Oracle of Omaha, our recommendation is stop "feeling" and instead "look at" the Baro:

Speaking of looking, look at the continuing climb-out below left for Gold's baby blue dots which denote linear regression trend consistency as the daily price bars show consolidation in the upper 1290s-lower 1300s. As for Silver below right, she sported a late week price pick-up, yet the "Baby Blues" spanning her three-month panel remain basically direction-less:

Toward closing, here we've the precious metals' 10-day Market Profiles, wherein for Gold (left) 1303 has been the most commonly traded price, and for Sister Silver (right) 'tis been 16.70:

To be sure, these days sleepy old Gold has put out the "Do not disturb" sign. Yet might nap time be nearly done? In having made several additional treks past the Monoeci offices, we've yet to therein see a wit of activity. Perhaps with much of the air having come out of the bits**t phenomena, they've rightly gone to lying low ... but 'tis really quite difficult to know. In any event, do know that 'tis all been kept in mind from your author's beloved writing perch over here. And 'tis just a matter of time before upside Gold sees its way clear!


Mark Mead Baillie

Mark Mead Baillie has had an extensive business career beginning in banking and financial services for two years with Banque Nationale de Paris to corporate research for three years at Barclays Bank and then for six years as an analyst and corporate lender with Société Générale.
For the last 22 years he has expanded his financial expertise by creating his own financial services company, de Meadville International, which comprehensively follows his BEGOS complex of markets (Bond/Euro/Gold/Oil/S&P) and the trading of the futures therein. He is recognized within the financial community of demonstrating creative technical skills that surpass industry standards toward making highly informed market assessments and his work is featured in Merrill Lynch Wealth Management client presentations.  He has adapted such skills into becoming the popular author each week of the prolific “The Gold Update” and is known in the financial website community as “mmb” and “deMeadville”.
Mr. Baillie holds a BS in Business from the University of Southern California and an MBA in Finance from Golden Gate University.

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