Fort Kobbe Vaults

A look at Gold and Silver Charts (03.30.2023)

I prefer Bullish_ Hedgeye cartoon
© Hedgeye Risk Management, LLC with permission granted by Hedgeye, reproduction and republication is expressly prohibited.

I am bullish on precious metals; the rest of the market, I am not so sure about except for certain sectors. In my opinion there are no free markets, there is manipulation in pursuit of total control. Humanity seems to have lost its sense of reality.  When people in power cannot define a woman, where are we headed? When every transaction has to be proven to our banks, where is our freedom?

Where else is our personal information being hocked? How intrusive are our social media platforms? When do we say enough?

Comparing the price of equities to the commodities index, we see in the chart below that commodities prices in relative terms have not been cheaper since the seventies. This bodes well for commodities prices in the future. Either equities fall or commodities rise in price or a combination of each brings equilibrium. We see in the gold, silver and platinum charts patterns suggesting a break out in these commodities.

Commodities to Equity Ratio

Gold & Silver

The investment industry is generally loath to invest in physical gold for a number of reasons: the difficulty with storage, time taken to arrange a trade, lack of instant liquidity, uncertain returns, uncertain inflation risk, potential regulatory restrictions and availability of the physical metal are just some of the perceived impediments.

From a personal point of view, there are several reasons to hold physical gold (and silver):

  • Portfolio diversification
  • A real tangible asset
  • Long term value preservation
  • Limited supply
  • Potential for capital gains
  • Global acceptance
  • No third party risk
  • No third party interference in transactions

In uncertain times people select precious metals, particularly as our fiat monetary system is at risk and crypto’s are under attack.

The chart below demonstrates how few advisors have gold in their portfolios at all and those that do hold such a tiny percentage. When one considers that the gold universe comprises stocks and physical metals, the total investment in this market is tiny and the silver market is a fraction in size compared to the gold market. Should the advisors start moving into the precious metals sphere prices will run uncontrollably.

BoFa Global Research_asset allocated to gold

March 25 (King World News) – Dr. Stephen Leeb:  “What I lose sleep over is how much exposure does a bank like JP Morgan have to the [gold] derivative market. This is not fraudulent but it’s an open secret. In fact [laughter] it’s no longer a secret because they’ve been penalized so much for it. They’re trying to control the price of gold. I mean when you sort through all of these derivatives, what’s JP Morgan’s short position in gold? I can imagine it being much more than the assets in the company. And if gold takes off and it gets out of control then it’s ‘Katy, bar the door.’ You don’t know what is going to happen. So that’s the real threat in my opinion.

The above article from King World News is a huge worry for me in terms of a solid increase in the gold price. I am unable to get information on the size or price at which the short lies. I would imagine that before expiry the price will be managed down to levels where no losses accrue to J P Morgan. In every other respect I have confidence in the long term future for higher prices for the precious metals.

Precious Metal Stocks

We have been requested to include a few comments on the precious metals markets.

We have an interesting anomaly in comparing the performance differential between the physical gold and silver markets and the miners, explorers and royalty stocks.

Over the past few years mining stocks have far underperformed the physical metals and the general market. Some reasons may be: crypto coins have taken portion of the investment dollars which could have been allocated to precious metal stocks, market sentiment determines stock pricing, mining companies have to absorb operational costs, mine reserves are depleting assets unless new reserves are continually found or bought, interest rates and inflation influence stock pricing, the risk profile of stocks, particularly mining stocks, is quite high and is reflected in pricing. 

How long the underpricing will last is subject to opinion, historically the catch ups are brief and violent one way or the other.

TodayLast Week
Gold Price today$1,968.00$ 1,976.00
Silver price today$23.56$ 22.90
Gold: Silver ratio today83.25:186.29:1
Gold Miners Bullish Percent Index55.1744.83
Dollar Index102.30101.97
Dow: Gold Ratio
(BahaUS 32,876.00/Gold price 1,968.00
16.7016.30
Current USA inflation rate (Dept. of Statistics)6.0%6.4%

Gold’s low of the week was $1,945.00 and the high was $1,981.00, now trading at around $1,968.00

  • The monthly chart for Gold is neutral but recovering the losses of the previous month and looking stronger.
  • The weekly chart has altered from sell to a weak buy and on this timeline is holding.
  • The daily chart gave a buy last week which proved correct.
$GOLD Gold Continuous Contract (EOD) CME 29 March 2023

The low for Silver this week was $22.82 and the high $23.94, trading around $23.61 at present.

  • Silver on the monthly chart gave a sell last month, there are however indications of a reversal taking place, but insufficient to give an unqualified buy.
  • The weekly chart is flirting with a buy and if it holds this level or improves in price shall do so. I would like to see a couple more indicators confirm the buy.
  • The daily chart has a buy signal and remains overbought at this level and may pull back. It is however, back inside the long term trading range.
$SILVER Silver - Continuous Contract (EOD) CME 30 March 2023

Our partner has stock of both gold, silver and Goldbacks in our vaults available in Panama, please contact us for more.

Fort Kobbe Vaults Golback

On the Stockcharts.com charts, the blue vertical lines are our proprietary system buy signals and the red vertical lines are system sell signals – for information purposes only.

Please contact us to arrange the purchase and storage of your gold and silver requirements in a safe, insured, location outside of your jurisdiction.

This is my interpretation of the market and is not to be taken as financial advice. Before making any buy or sell decisions I recommend that you consult with your professional financial advisor.

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