The price analysis two months ago concluded that a neutral market had been found between $1800 and $1850 and was waiting to see a break of resistance or support. It leaned bullish with indicators showing the down move had run its course but it also highlighted the risk that a drop below $1800 and $1750 brings $1680 into play. Last month concluded that even though gold was still trapped between $1800 and $1850 it had built up solid support. Unfortunately, gold fell through the trap door at $1800 and tested $1680 last week. Has a bottom been found? Too soon to tell, but a look at the indicators could give some clues.
Gold started July delivery activity as the weakest minor month since 2019. This showed a general lack of interest in the market. Considering the activity since then, it’s possible this was a signal of capitulation.
Since the start of the delivery month, activity in the July gold contract has exploded.
We’ve heard all kinds of excuses for inflation. It was COVID. It was Putin’s price hikes. It’s greedy corporations. This week, we learned it’s the millennials’ fault. As host Mike Maharrey explains in this week’s Friday Gold Wrap, all of these notions miss the mark. And they let the real culprit get off scot-free. How? They’ve redefined inflation. Words matter!
On July 1, a Virginia law extending and expanding a sales tax exemption on the sale of gold and silver bullion and coins went into effect. Ending the sales tax will relieve some of the tax burdens on investors, and take a step toward treating precious metal bullions as money instead of a commodity.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
It happened again. The CPI data for June came in hotter than expected. Prices rose at the fastest pace in this inflationary cycle. That pushes the Fed ever closer to having to make a very difficult choice. In this episode of the Friday Gold Wrap, host Mike Maharrey breaks down the most recent CPI data and talks about the “Sophie’s choice” facing the Federal Reserve.
The Federal Government ran an $89B deficit in June. This was an increase MoM but below the June deficit last year of $174B.
The latest seasonally adjusted inflation rate for June came in at a blistering 1.35% MoM and 9.11% YoY, beating expectations of 1.1% and 8.8% respectively. All prices rose in May with 8 of 11 categories rising faster than the 12-month trend, representing 94.7% of the total CPI.
Silver has dipped below $20 an ounce for the first time in two years. But given silver’s fundamentals, the current economic dynamics, and the trajectory of the Fed, silver appears very oversold.
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The US government increased its total debt by $69 billion in June. The average interest rate on all of that debt is also going up, a growing problem for the borrow and spend government.
The Treasury Department continues to roll short-term Treasury Bills into longer-dated securities, allowing $148B in Bills to roll off the debt statement this month.
