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A look at the Gold and Silver Charts (29.02.2024)

Liquidity-cartoon
© Randy Glasbergen

In the FRED chart below of the reverse repurchase agreements in billions of dollars, one could almost believe that the banking crisis is over judging by the precipitous decrease in overnight lending.

When reverse repo volume declines, it means that fewer institutions are parking cash with the Fed in exchange for securities. This results in reduced liquidity, limiting the ability of banks to lend and invest, constraining economic activity.

Reverse repo’s influence short term interest rates. Institutions lend cash to the Fed which issues very short term notes against the loan. This has a tendency to push short term rates lower. If this activity reduces as we see below, higher interest rates ensue.

The result is a slowing economy.

Large fluctuations in Reverse Repo transactions can disrupt financial markets. A significant decrease in transactions signals uncertainty or distress in the financial system.

Declining Reverse Repo activity complicates the FED’s efforts to control interest rates and may force the Fed to use other monetary tools.

Declining Reverse Repo activity is indicative of underlying issues such as reduced liquidity, upward pressure on interest rates, market disruption, difficulty with monetary policy implementation etc.

Fred Graph (6)
Federal Reserve Bank of New York, Overnight Reverse Repurchase Agreements: Treasury Securities Sold by the Federal Reserve in the Temporary Open Market Operations [RRPONTSYD], retrieved from FRED, Federal Reserve Bank of St. Louis;

Could this be deliberate?

Could this be why executives are selling not only shares in their own companies, but also shareholdings in other companies.

From ‘The Motley Fool’:

Sales of Meta shares (Trading around $480.00 each today), by billionaire money managers:

  • Jeff Yass of Susquehanna International (3,037,082 shares)
  • Chase Coleman of Tiger Global Management (1,430,767 shares)
  • Philippe Laffont of Coatue Management (542,399 shares)
  • Steven Cohen of Point72 Asset Management (371,850 shares)
  • Israel Englander of Millennium Management (307,709 shares)
  • David Tepper of Appaloosa Management (100,000 shares)

From ‘Business Insider

  • JP Morgan CEO Jamie Dimon sells $150 million of shares (around $184.00 each today).
  • Amazon’s Jeff Bezos sold 50 million shares of the company for about $8.5billion.
  • Meta’s Mark Zuckerberg sold 1.8 million shares of Meta worth about $400 million.

We know Warren Buffett is buying a huge amount of silver bullion, apparently over one billion dollars, an order to be, or being delivered over a year-long period

What should we be thinking? My thoughts are that if they do not want to be in the market, nor do I. I am certain that my sources are nothing like theirs.

I want to know where the funds derived from selling are being placed.

Do they trust the banks? Do they trust the cash? Is the currency being re-invested or parked? If so, where?

Are they buying silver or gold or other commodities?

In terms of the overinflated stock and bond prices, commodities look cheap. How will they look in a deflationary economy?

We wait in anticipation of further reveals in this fascinating unfolding of markets and society.

BITCOIN & GOLD

We see here the huge increase of the value of BTC versus gold. Previously in times like these we have seen substantial exchanges of BTC for gold and silver.

Looking at the ARKB Bitcoin ETF I see a scary spike high candle, which may portend a Bitcoin price pull back. (see red arrow).

20240229 ARKB

GOLD & SILVER STOCKS

Although we got a buy stocks sell gold signal last week, the physical gold continued to outperform the stocks.

$GOLD:$HUI Gold- Continuous Contract (EOD) Gold Bugs Index - NYSE - 29 February 2024

Physical silver is still stronger than SIL the Global X silver stock fund.

$SILVER Silver - Continuous Contract (EOD) CME 29 February 2024

GOLD & SILVER

Although gold outperformed silver this week, the system did not trigger a buy of gold against silver. The indicators are about to switch.

$GOLD:$SILVER Gold Continuous Contract - (EOD) Silver - continuous 29 February 2024

GOLD TO USD

The USD is trying to regain strength, but is not succeeding well so far. I believe this accounts for the lackluster performance of gold this week.

There is no buy signal on our system for the dollar yet.


$USD US Dollar - cash Settle 29 February 2024

A LOOK AT THE GOLD & SILVER CHARTS
TodayLast Week
Gold Price$2,028.00 $2,029.00
Silver Price$22.33$23.01
Gold:Silver ratio90.80:188.05:1
Gold Miners bullish percent index17.8617.86
Dollar Index103.97103.79
Dow:Gold Ratio (BahaUS 38,810.00 Gold price, $2,028.00)19.1319.10
Current USA inflation rate (Dept. of Statistics)3.1%4.1%

Gold’s low of the week was $2,024.00 and the high was $2,039.00, now trading at around $2.028.00.

  • The monthly chart for Gold is a hold. I am still concerned with the spike high produced by the sharp increase in price in December, followed swiftly by the reversal. Most indicators are still positive. Our buy in was at $1,800.00.
  • The weekly chart remains a hold. The spike high still needs careful watching. A number of indicators are negative but no sell has been indicated yet.
  • The daily chart triggered a buy. I don’t believe a long term run as the stochastic is nearing overbought and the dollar is strengthening today.

The great thing about a monthly chart is that it keeps perspective. Moves on the shorter term charts look dramatic while the monthly chart just plods along giving the overall picture.

 What I see here is the formation of a longer term inverted head and shoulders pattern which can easily resolve into a price run upwards.

 Usually the shoulder widths are about equal before the run takes place. We are nearly there.

 A couple of months more I would guess before we see fireworks. Look at the move between 2019 and 2021. Gold went from $1,200.00 to about $2,000.00.

$GOLD Gold - Continuous Contract (EOD) CME 29 February 2024

The low for Silver this week was $22.27 and the high $22.91, trading around $22.33 at present.

  • Silver on the monthly chart indicates out.
  • The silver weekly chart indicates out. 
  • The daily chart gave a buy last week. It is still struggling to hold onto this position. This is normal in early trades. The rate of change indicator has turned up and other indicators are holding on, just.

Interestingly, the silver monthly chart also reflects an inverted head and shoulder pattern. In terms of what should be happening economically with the silver price, an upward explosive resolution should be expected.

 If it will happen, only the manipulators know.

$SILVER Silver - Continuous Contract (EOD) CME 29 February 2024

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

Goldback - Fort Kobbe Vaults - Panama. WE ACCEPT GOLDBACK

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.

If you are interested in an overview of Fort Kobbe, you may want to have a look at this video: Mike Brown, Director, Fort Kobbe, International Vaults, A DotCom Magazine Exclusive Interview

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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