Charts Gone Wild: Gold tops $1250, Silver to $18, Dollar Doomed

What Just Happened and Why?

 

Metals Overview

The day started off positively. Here are some notes from George Gero

  • Gold up well again after FED notes yesterday,dollar backed down a little
  •  traders looked for options expiration tonight on Comex
  •  we called for traders short covering rally yesterday afternoon,
  •  Euro Zone election worries
  •  Possible President Trump Congressional on February 28, ahead of FED’s March open meeting where rates are a major item.
  • The inflation risked by infrastructure investments, tax cuts, and crude prices is started reflecting itself in Gold’s rally.
  • Open interest now 431119,option open interest ahead of tonight 1,106,376
  •  May see volatility tomorrow as options in the money become futures contracts.
  • Spreads April-June 330,gold-silver 68.70 still low,gold-plat 231.10 and close over 1250 may attract more asset allocators next week.

So far so Good. And then it got crazy.

  1. Mnuchin spoke scaring stocks and the USD down and bonds higher. Good for Gold.  
  2. But Stocks were bought on the close hard (again). Huh?
  3. The ViX is meaningless as an indicator of future volatility if we are to believe it is not beingmanipulated lower.
  4. March Hike Odds dropped on yesterday's numbers. May's spiked
  5. Trump's Border Tariff talk hurt retail, and didnt help the USD this time
  6. Metals Made new highs on USD weakness

interactive Chart HERE

 

Our  friends at zerohedge gave a nice synopsis of the rest 

Via zerohedge.com

Gold Jumps Most In 2017 As 'Mnuchin Moment' Sparks Dollar Dump; Dow Tops 20,800

Mnuchin hit the reset button and then asset gatherers spent the day like this...

The Dow topped 20,800 shrugging off any fears from Mnuchin...thanks to a VIX slam...

Total panic bid right athe close to ensure 20,800 and to get the S&P green...

Making the 10th record close in a row - something that has only happened once before in the 100-year-plus history of The Dow...1987

The Value Line Geometric Composite Index has officially broken out...

Dana Lyons explains The Value Line Geometric Composite (VLG), as we have explained many times in these pages, is an unweighted average that tracks the median stock performance among a universe of approximately 1800 stocks. Thus, in our view, it serves as perhaps the best representation of the true state of the U.S. equity market. Additionally, it has historically been very true to technical analysis and charting techniques, which is quite remarkable considering there are no tradeable vehicles based on it. And, as noted, the VLG is testing a monumental level at the moment, going back several decades.

The S&P Tech sector finally had a losing day in Feb...

Ending the record winning streak...

Construction stocks tumble most since June on Trump infrastructure plan timing doubts

Tesla tumbled...

WalMart took a spill late on after Trump raise the border tax again...

As did the rest of the Retail sector...

VIX and VXV have entirely decoupled from stocks...

Mnuchin's comments sparked reflexive buying in bonds and stocks but that soon broke with stocks tumbling to recouple with bond yields drop...

Rates dropped notably on Mnuchin's comments (with the long-end underperforming) - now all lower in yield on the week...

ED/FF Futures indicate that March rate hike odds are tumbling as hawks shift out to May...

The USD Index tumbled on Mnuchin comments - the biggest drop since January. NOTE - no bounce in the USD after Trump brought up the BAT again (and tanked retail stocks)

With Cable and yen strength the biggest driver...

Gold topped $1250 (best day for Gold since December) - erasing most of the Trump losses - and Silver broke above its 200DMA...

Bitcoin reached a new record high in USD terms...

Copper dumped on end of strike chatter and US infrastructure doubts

 

via zerohedge.com

 

 

Welcome to the1970's. Surging Inflation, War financed through debt, and an administration without a plan except to "put more on, ya moron" 

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