first majestic silver

Gold Keeps Control Through Jackson Hole

Market Analyst & Author
August 27, 2017

There was a moment in yesterday's (Friday's) trading session for gold wherein we said, "Oh no, here we again go, price losing control". Here 'tis below (left arrow) in the sudden spate of nervousness leading into Federal Reserve Chair Yellen's Wyoming remarks, wherein rather than talk rates, she assured us of the financial system's safe state. From our view, gold didn't buy that a bit, and thus as you can see, regained control. (When European Central Bank President Draghi later spoke well into the night by EuroTime, most traders there were into the weekend's imbibing, albeit the Euro did press on to highs not seen since the start of 2015). Per the otherwise flat graphic across the session, gold settled out the week at 1297:

A week ago upon gold's having regained 1300, we queried as to whether 'twould again get stuck as is its wont 'round this level, or if instead 'twould battle ahead up through the thicket of price resistance toward Base Camp 1377, from which the door really swings open for a much higher, less impeded run to 1600. For the present, we've our answer, gold getting stuck to yet again settle in these Whiny 1290s for the third consecutive week. Blame it on the Dog Days of August? 'Twas gold's narrowest trading week of the last 10, indeed the fourth such of the year-to-date. Here are the weekly bars:

Continuing to fly under the radar, indeed fall off of it, is the ever-descending Economic Barometer. 'Twas quite a light week for incoming data, highlighted by slowing growth in July sales of both New and Existing Homes as well as a decline for that month's Durable Orders. Recall about a week back Federal Open Market Committee Vice-Chairman William Dudley's envisioning further rate hiking and balance sheet shrinking? "Yo Bill! Can ya 'Hang Ten' there for us, baby?"

Speaking of which, if you've been following the day-by-day stance of the precious metals' baby blue dots that denote 21-day linear regression trend consistency, they continue to precariously hang about in the rarefied air up there as opposed to simply letting go to the downside. 'Tis very unusual to see but a mild slide by the "Baby Blues" like this, rather than their resorting to the more sweeping moves of which we're accustomed. True, 'tis a testament to the strength of the rallies for better than a month in both gold on the left and silver on the right. But should price not step up right quick, look for the dots to readily slip:

Now let's look at the precious metals' 10-day Market Profiles. And talk about those Whiny 1290s: they dominate the profile for gold (left), whilst Sister silver's (right) knife-edge is essentially 17-even:

Toward this week's wrap, let's bring up gold's stack. Some might say 'tis a bit silly to so do given gold's having returned to settling week-after-week 'round the Whiny 1290s. That said, markets can start quickly moving just as they appear dead:

The Gold Stack
Gold's Value per Dollar Debasement, (from our opening "Scoreboard"): 2709
Gold’s All-Time High: 1923 (06 September 2011)
The Gateway to 2000: 1900+
Gold’s All-Time Closing High: 1900 (22 August 2011)
The Final Frontier: 1800-1900
The Northern Front: 1750-1800
On Maneuvers: 1579-1750
The Floor: 1466-1579
Le Sous-sol: Sub-1466
Base Camp: 1377
2017's High: 1306 (18 August)
10-Session directional range: up to 1306 (from 1273) = +33 points or +3%
Trading Resistance: 1303
Gold Currently: 1297, (expected daily trading range ["EDTR"]: 13 points)
Trading Support: numerous, notably 1293 / 1278
10-Session “volume-weighted” average price magnet: 1291
Neverland: The Whiny 1290s
The Box: 1280-1240
The 300-Day Moving Average: 1261 and barely rising
The Weekly Parabolic Price to flip Short: 1212
2017's Low: 1147 (03 January)

Finally we've these closing quips:

■ With further respect to quickly moving, recall this graphic from our 19 January 2013 Gold Update?

Quickly moving, indeed: ever-efficient Germany has completed its planned repatriation from New York City and Paris of 743 gold tonnes onto their rightly shelves at the Bundesbank -- three years ahead of schedule. Ties in nicely with Porsche having again taken the gold at Le Mans earlier this year.

■ What about Americans taking gold to the bank? Sadly there are very few 'twould seem. According to a job-searching website called CareerBuilder, their survey of some 5,000 hiring managers and workers found that 78% of full-time employees are living paycheck-to-paycheck, 71% of whom are in debt, and therein 56% unmanageably so. So: when 'tis time to retire and they ain't got the dough, cue the currency tumblers at the U.S. Treasury and let those Dollars go! In turn of course, gold ought really go!

■ Moreover, what might all this debt depth mean for StateSide sales of Ferrari's new "entry level" model, the Portofino? The expected price (to be released at next month's auto show in Frankfurt) is 'round €170,000, a bit north of $200,000. That works out to some 150 ounces of gold. Apparently, neither is affordable on this side of the pond, (but what else is new?)

So next we've the drive toward Labor Day, en route to which the Econ Baro shall be moved by 20 data metrics. And should its weakness continue, we'd expect see gold on the upmove!

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.

Nevada accounts for 75% of U.S. gold production.
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