Gold Death Cross

[helmsdale]

Diesel prices are boarding a rocket to the moon as well I see.

[Austrian Economics]

A couple of observations: first off, the run up in commodity prices is transitory. The price of oil, for instance, is obviously affected by demand shocks due to major weather events in places like Texas. Once the weather warms up, prices will settle back down. Some are predicting a renewed long term bull market, but I doubt it.

The reason? The falling interest rate trend of the last 40 years is profoundly deflationary for commodities, and that trend continues to move down.

Secondly, the gold price is a function of interest rates. The trend down in interest rates is not a straight line, but a jagged one. Right now, we are in a short up-cycle. If central banks sit back and allow that to continue, we will be in another 2008 type scenario before long. Perhaps they will try to pre-empt the collapse by intervening in the bond market, but my sense is that they are too complacent to do that.

Before anyone sells the farm to buy Bitcoin, have a look at transaction costs and time lags that Bitcoin users face when they try to trade them for real goods and services. It's astounding. I can't imagine that any economy could possible function under such conditions if the use of Bitcoin became widespread.

[GDR]

Copper over $4.00 this morning. Look like deflation to you Errol? Must be for lack of velocity of money?

I'm guessing copper and other building materials will get a big push as a result of the mess in Texas. Also will be shortages of some materials for a year or so, the repair bills are going to be similar to hurricane damages.

[errolanderson]

Mass deflationary pressures are a serious incoming risk (IMO). With markets so heavily leveraged and a totally out-of-control global debt situation plus gradual failure of central stimulus (money printing) , how can inflation remotely take hold without pricking-the-bubble. Now pretend that rates are going to rise? Go figure . . . .

The next correction / crash (whatever you want to call it or not call it) will be harsh. No bones about this. And when it happens, all asset values will be under pressure. No bones about it.

Gold’s price drop is a clear warning of this (IMO).

[sumdumguy]

Gold only down forty odd bucks, not catastrophic in my eyes.

[macdon02]

Mass deflationary pressures are a serious incoming risk (IMO). With markets so heavily leveraged and a totally out-of-control global debt situation plus gradual failure of central stimulus (money printing) , how can inflation remotely take hold without pricking-the-bubble. Now pretend that rates are going to rise? Go figure . . . .

The next correction / crash (whatever you want to call it or not call it) will be harsh. No bones about this. And when it happens, all asset values will be under pressure. No bones about it.

Gold’s price drop is a clear warning of this (IMO).

Ok, but it's only gold, if you look at the ratio, silver isn't buying it? Why? Yes i agree and I'm not being argumentative, merely pointing out that one of the twins is fighting the trend. And for everyone else reading this, reddit has nothing to do with it. The g/s ratio went from historic to crash mode. I think the ratio is indicating the barter system is coming back to life. But im just an idiot in buttphuck sask.

[macdon02]

Second question, because i simply don't know, is there anything specific in silver mining that could be affecting the availability? Copper, Platinum and Palladium are on a heck of a roll, long term. I don't know shit from canned peaches on fundamentals of metal mining, i only read charts.

[farming101]

I'm no expert but the news this past year is that China and more so India are importing way less gold.
Silver is seeing support from this area because if you can't afford gold then you buy silver.
That is likely not the whole story but part of it.

Silver miner ETF's came back strong in 2020 after they collapsed in March, but have been kind of steady since July

Gold prices were briefly about this level at the end of Nov 2020 not even quite 3 months ago.
I would not be surprised if some high rolling traders are short gold and well in the black now. It could be pushed lower yet..

[Rareearth]

Walmart USA is raising wages for cashiers to $15 hour, and $19 for electronics and restockers.
This is happening with record unemployment.
Inflation is slowly making a impact.

[errolanderson]

Silver mini-crash in the past few hours. Weak longs getting driven out on stops and margin calls?

Speculator furor in full display . . . .