The CPI Report: Rally Time for Gold?

  1. Oil is the biggest medium-term driver of inflation worldwide. When western governments wave huge”Drill, baby drill!“Banner today, it would take years to replace the millions of barrels of oil they have withdrawn from the market with freshly drilled supplies.
  2. Rather than channeling oil from staunch ally Canada, the US government has aggressively pumped oil from its strategic reserves.
  3. Has the market priced in the government having to replenish these reserves? Sadly no.
  4. Western governments are promoting the green energy transition, which is a good thing, but they are trying to turn a 30-year transition into a 3-year deal that includes the “bonus” of ruining Ukraine and much of Europe .
  5. The bottom line is: Thegmen” of the West look like Vincent Price characters promoting macabre, war-oriented fantasies instead of grandly engineered pipelines.
  6. Double-click to enlarge this daily oil chart. US citizens grumbled as oil surged to $130, but they never lived to see the crowd “Pain from lack of fuel” that European citizens did.
  7. That could change quite dramatically if oil starts a new leg higher. How could this happen and what are the consequences for the citizens of the world if this is the case?
  8. Well, the US elections in November could mean that the Democrats remain in control and stop the outflow of strategic reserves because they would have more time to get US citizens used to higher prices.
  9. Republicans might win and try to impeach pro-war enthusiasts.Jackboot Joe“Biden … but if Republicans win, they will likely continue sanctions on Russia. wave.”Drill, baby drill“Banners in December will not stop thousands of eurozone citizens potentially freezing to death and…
  10. Gold tends to stage violent rallies against US fiat when major new horror themes emerge.
  11. Double-click to enlarge this SGOL Gold ETF Chart. Technically, gold is in a great position; there is a stochastic buy signal in the oversold territory, the commercial traders have added COMEX longs and a Friday close above the red dotted downtrend line should trigger a strong rally.
  12. Silver? This powerful metal had a great rally yesterday and now a bullish flag-like pattern is in play.
  13. The latest COT report is incredibly positive. Commercial traders are now long what gold bugs see as the second largest metal in the world and silver bugs as… number one!
  14. What about the miners? Double-click to enlarge this Hourly GDXU Triple Leveraged ETF Chart. It’s up about 30% in a week!
  15. The CPI inflation report is out today and I issued a sell GDXU alert to my swing trade newsletter subscribers yesterday.
  16. Short-term leveraged trading can be helpful from both an emotional and a financial perspective when the investor “funny trades” in a separate account from the larger core positions.
  17. For unleveraged positions, which should make up the majority of most gold bugs’ portfolios, it’s too early to sell…way, way too early!
  18. I recently suggested that investors could follow me and shift their ETF focus from XME to GOAU, GDX, GDXJ and SIL and yesterday demonstrated the potential wisdom of this play.
  19. XME includes base metals stocks and has been an outperformer in gold price rallies as central banks started to rally.
  20. In the next phase of the 2021-2025 war cycle, eurozone starvation, lack of heating and sanctions infighting are likely to be key issues, as well as the post-US election chaos.
  21. If the situation worsens, the stock market rally could end while the gold/silver rally intensifies.
  22. Double click to enlarge this great looking GDX chart. While volatility around the CPI and PPI reports is expected and normal, once this smoke clears, GDX should mount its biggest rally of the year.
  23. Double-click to enlarge this GOAU chart. Volume bars are excellent, there is a stochastic buy signal and the key 5.15 moving averages are looking good.
  24. Double click to enlarge this Euro Dollar Chart. Investors seem too focused on the collapse in eurozone GDP and not enough on the ECB. In the coming months, the Fed will likely continue to rise (destroy the stock market), but at a slower pace, while the ECB becomes relatively more aggressive. Gold, silver and oil are on the move. Next comes the euro, and there flashes a “All systems go!” Signal to the miners!

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