The Cartel Is In A Box With Gold & Silver Prices But Don’t Start Celebrating Yet

Here’s a thought: Is it possible that platinum is being pushed lower this year in an attempt to further crush precious metal sentiment?

Platinum does look to have bottomed in the short-term, and it looks like it has room to run before open interest becomes a problem, so the outlook is otherwise good, but wouldn’t it just crush sentiment if platinum got a taste of the price smashing this week?

Palladium, the shining star of 2017, is still doing its thing:

Something interesting about palladium is just how the open interest has dropped this year. First off, palladium is a way smaller and less traded market than gold or silver, so the open interest builds and drops in a steeper, quicker fashion. Also interesting to note is that on the chart, open interest in palladium has dropped on both dips and price rallies. These are the signs of a less manipulated market, unlike gold and silver whose open interest 9 times out of 10 falls on price smashes.

However, if the cartel is going to flush out the longs in gold and silver, this is going to be a problem:

Although still low, market fear is beginning to spike. Of course, if domestic and geo-political fundamentals are part of it, and if the ESF and Fed were not, the VIX would be spiking even more.

A VIX moving higher is bullish for gold and silver because the precious metals are “safe haven assets”. They feed off of, in part, uncertainty.

The dollar is also going to be a problem if the cartel is smash price to cover their shorts:

The Japanese yen looks to have turned and looks that is is beginning to strengthen against the dollar. A strengthening yen (which is shown by the action moving down on the above chart) is good for gold, just the same as a weakening dollar is good for gold.

We highlight the yen because it is one if not the preferred carry trade to move the metals market.

For the yield on the 10-year, we’ll just have to wait and see:

Over the last 52-weeks, the yield on the ten year has been between 2% and 2.6%. With all of the fundamental news picking up steam, we’ll see how that factors in to the Fed’s supposed “balance sheet unwind”. Recall however, that if Powell is confirmed, just as in Yellen, Powell is set to slash interest rates during the next financial crisis.

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