Gold Sheared, Silver Smeared

 

Gold was sheared this past week by -1.2% and is now -3.9% year-to-date. Silver was smeared this past week by -2.6% and is now -6.4% year-to-date.

To be sure -- given all that we fundamentally understand about Gold -- its moving lower in the ongoing financial environment makes nary a whit of sense whatsoever. The market is never wrong by traders having put price where it is, irrespective of its going the wrong way.

And given the fundamental precious-metals-positive state of essentially everything, it's diabolical that price descend.

Indeed as Gold leapt out of the gate to commence the New Year by gaining +3.2% (and Silver +6.0%) within the first three trading days, it struck us that our call for a Gold high this year of 2401 may have been too conservative. And from the "Under-State and Over-Deliver Dept.", such 2401 forecast may still be too conservative even given the present pullback.

Either way, Gold settled out the week Friday at 1828 which is but half the above Scoreboard's debasement valuation of 3644. Moreover, it's before President-elect Biden rolls out his nearly $2 trillion instant COVID/economic relief plan, which with Congress now all "blue" ought pass right through.

"But even that is already priced into Gold, right?"

Of course it is.. And again, please spare us the argument that bitcoin is the modern alternative to Gold. Cryptocurrency -- which within two trading days just fell -27% -- isn't falling into our lap.

And again, the fundamental stance for Gold we continue to view as 100% positive given the ever-burgeoning levels of the 3Ds (Debasement, Debt, Derivatives), the declining Economic Barometer (as we'll below show), COVID clearly not contained (nor the effects of its vaccines preordained), and the endless spending of even more $trillions beyond the initial $2 trillion under Biden/Harris/Congressional reign!

So: why has Gold been declining? Reprise: the technical stance for Gold may merely be viewed as price having leapt too far too fast, as least by its recent deviation above the 300-day moving average.

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