Gold Market Wire
News, analysis and commentary for gold traders and investors
Silver Market Update
6.2% US CPI Rise Sends Silver on a Tear
November 10, 2021 - (Gold Market Wire) - Regular readers of this blog know that we abhor news driven markets. More accurately, we are inclined to fade news and "sell the fact". But we must also acknowledge a sea change when we see one - and this could be one. A 6.2% rise in year on year CPI is a momentous event. While we could certainly see and expect a big number, this one shocked even those who think they've 'seen it all.' If we hold these gains into the end of week - or even manage to stay above the downtrend in Silver previously identified, and the horizontal resistance we noted yesterday in Gold, we may be ready to acknowledge that the long awaited shot that signals the start of the monetary crisis proper may just have been fired.
What prompts us in this regard is the fact that the Metals have certainly re-acted to a 'monetary event', alongside a rally in the US Dollar. This is a true culmination of that moment we have been extolling for years...that the Metals and the US Dollar are now going to rise together...something the "US Dollar is Finished" crowd never seem to understand. A mere cursory reading of history would tell them that a true (global) monetary crisis always sees the peripheral nations get hit first. Watch out British Pound and Euro... you are under attack by the market. This could be the beginning of a true battering of both currencies vs. the US Dollar - despite what the Goldbugs say.
In these scenarios, dramatic events can unfold quickly. The market is now going to target 1.03 on EUR/USD. We are long Dollars for years now, especially back to the 1.225 level which we identified as our core entry. We are almost ready to leverage short the Euro against the Dollar. This is even more true for the British Pound, which is about to undergo a true re-valuation.
No doubt the Metals are the place to be.
This kind of a move, coupled with a strongly rising US Dollar is shout from the rooftops that the market has changed and is now entering a crisis mode.
Long Metals, Long Dollar is the only way to be.
Let's see if we hold the Silver gains into the end of the week. We stand prepared to add length on pullbacks that don't return us under the trend line.