Weekly Update: Gold, Silver, Bitcoin – 03.10.2017

Greetings fellow amateurs,

Another turbulent week is in the books with emergent chaos across many different vectors. Somehow, someway, despite all of the craziness, it feels like crunch time will arrive next week. Despite the many events that will potentially unfold around and on the Ides of March, those watching for an imminent immolation may be sorely disappointed. Perhaps we will see dramatic destabilization, but in my view we will continue to see the slow burn scenario play out. Of course, in the meantime we’re always on the razor’s edge of some apocalyptic drama playing out.

I’ll be appearing as a guest on The Hagmann & Hagmann Report next Wednesday 3/15 from 8:00pm to 9:00pm. My commentary will revolve around the maelstrom that will be the debt ceiling holiday expiration, the Federal Reserve policy announcement, the potential triggering of Brexit’s Article 50, the elections in the Netherlands, and whatever fake news false outrage scandal du jour happens to arise over the weekend…

At any rate, we’re witnessing some fireworks financially and geopolitically, but it all seems like the stage is being set for even more explosive developments. Attorney General Sessions is definitely up to something, and WikiLeaks isn’t done releasing documents. Let’s turn to our alternative assets of choice:

Gold

The selloff in gold that began up at $1,260 continued this week. Crucially we didn’t close below the psychologically important $1,200 level, but the loss of positive trendlines and momentum appears to imply a greater probability of a more epic waterfall slam. All of this could be reversed dramatically given the right catalyst (Fed shock, destabilization, etc.), but in the absence it looks like the paper price is vulnerable under $1,200. We’d want to see that hold, but keep in mind that all dips are buyable if you have a long term approach. Occasionally the manipulation regime takes down the paper price in advance of a rise in price in order to keep a lid on everything. We could be seeing that here, but we’ll have to wait and see how next week’s potential catalysts play out.

Silver

After the initial plunge from $18.50, silver got hammered some more for no real reason apart from someone with infinite paper rebuys in the current financial architecture wanting the price to go down. We barely closed above $17.00 on the week, but we’ve seen mining stocks come out of their dips towards the end of the week as a potential leading indicator. The orderly uptrend in price that had stuck through 2017 thus far is clearly no more. Again, we could witness special catalysts, but without that on the table we’re at an important inflection point. Next week is likely too complicated to offer a definitive forecast, but we should be accurate and precise where we can: silver is still a historic buy at these levels. Be tactical about prices, but don’t be too picky. Someday rather soon all that will matter is how much you have and it won’t matter whether you caught the bottom at $14, got in at $20, or were holding from prior highs close to $50.

Bitcoin

Check out those wicks! The zoomed in chart shows some of the drama that played out after the SEC denied the Bitcoin ETF. It did break above $1,300 and then back below $1,000 before returning to a higher point where it will continue to fluctuate. Volatility is still the name of the game, and only time will tell if this trip back to the triple digits will be the last. I’m unsure of the likelihood of additional follow through on the announcement, but I don’t imagine it would persist with greater drama unless we get an additional catalyst. My personal view is that Bitcoin is better without paper ETFs. While it is true that it would open up Bitcoin to more traditional investment capital, it would also open the door to the same type of paper derivative manipulation that we see in precious metals. Like the other catalyst-driven dips I’d view this as something that can be bought, but just like silver at this point if the thesis plays out the price where you got in will matter much less than your general participation. One thing is at least clear, by citing the potential for manipulation of the underlying asset as part its denial of the ETF, the SEC has once again proven itself a hapless, defunct, and corrupt regulator. Nonetheless, I’d relish the opportunity to buy lower, but since I already have my desired allocation I’ll simply be patient and wait on the response next week.

Conclusion

Stay the course and don’t give up. Do your homework and stay adaptable. Choose who you listen to with careful discretion. Don’t believe everything you hear. Don’t believe everything you read. The most impactful events are the most unexpected.

Disclaimer: These are one amateur’s fallible opinions. Holding any asset is risky, so do your own research and make your own investment decisions.