Fort Kobbe Vaults Newsletter

A look at Gold and Silver Charts (19.01.2023)

Rethink your Buy and Hold Strategy - Hedgeye cartoon
ยฉ Hedgeye Risk Management, LLC with permission granted by Hedgeye, reproduction and republication is expressly prohibited.

I thought it may be interesting to have a look at the Bitcoin to Gold relationship as it stands now. I have often voiced my opinion that gold and bitcoin easily and comfortably live together, each fulfilling its own purpose in the system.

The four charts below describe the current situation. The first chart comparing the US Dollar (green) to the gold price, shows the inverse relationship that has existed since June last year. Furthermore, we see a double bottom and consistent upward price movement in gold since November. I do not see an impediment until $1,975.00.

$GOLD Gold - Continuous Contract (EOD) CME 17 January 2023

The second chart shows the relationship between Bitcoin and Gold.

Since April last year Bitcoin has underperformed gold, with sustained declines in relative value as the year has progressed. In the past week or so this has changed and a buy BTC relative to gold signal has triggered.

I think this may run a little further as I do not have any reversal signals on my system, but it looks extremely overbought at this level. I expect a reversal relatively soon.

$BTCUSD:$GOLD Bitcoin to US Dollar/Gold - Continuous Contract (EOD) CRYPT/CME

The third chart is a clean BTC chart which shows the decline in value of the asset over the past year. The indicators reflect an overbought situation with a high likelihood of reversal in the near term.

I have no idea how far it may fall, but $15,000.00 does not appear to be an impossible number. Should it break above $21,800.00 I would reevaluate the above.

$BTCUSD Bitcoin to US Dollar CRYPT 18 January 2023

The fourth chart is just a quick rehash of a chart we published previously comparing BTC with the Nasdaq index. Notice the relatively tight correlation between the two. I worry that a collapse in the stock market may trigger a similar collapse in the crypto market. The narrative that I continually hear is that cryptoโ€™s will strengthen or save us in such a scenario, is not borne out by this chart.

$BTCUSD Bitcoin to US Dollar CRYPT 18 January 2023
TodayLast Week
Gold Price$1,910.00$1,887.00
Silver Price$23.40$23.75
Gold : Silver Ratio81.56:179.43:1
Gold Miners Bullish Percent Index55.1751.72
Dollar Index102.22103.01
Dow:Gold Ratio
(BahaUS 30 33002.00 / Gold Price ,1909.00)
Current USA inflation rate (Dept. of Statistics)7.1%7.1%

Goldโ€™s low of the week was $1,900.00 and the high was $1,929.00, now trading at around $1,908.00. An extremely tight range.

The monthly chart for Gold is a buy and looking strong. The weekly chart is neutral looking overbought. The daily chart is neutral looking overbought and weakening.

$GOLD Gold - Continuous Contract (EOD) CME 18 January 2023

The low for Silver this week was $23.25 and the high $24.51, trading around $23.39 at present.

Silver on the monthly chart is a buy but faltering in momentum. The weekly chart is holding but weakening. The daily chart is neutral, looking a little weak.
$SILVER Silver - Continuous Contract (EOD) CME 18 January 2023

On the charts, the blue vertical lines are our proprietary system buy signals and the red vertical lines are system sell signals โ€“ 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.

Larry Simon
Larry Simon

Larry Simon was educated at the University of Witwatersrand, Johannesburg, South Africa and is an experienced businessman specialised in management, investment and finance.

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