➡ The article discusses the potential impact of geopolitical events on the value of gold. It suggests that peace agreements could lead to increased oil production, which might lower gold’s value. However, the author questions why gold remains strong despite these factors and speculates that there might be a behind-the-scenes oil-for-gold revaluation. The author also shares his current investment positions, being long on gold and miners, and short on tech.

Where are metals after last week’s stock dropping? The backdrop is we had a stock sell-off last week, and from there we’ll take that stock sell-off and see what it implies for precious metals, gold and silver. Welcome to the Morning Markets and Metals with Vince Lancey. Where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now here’s Vince. Good morning. I’m Vince Lancey. Today’s market rundown we’ll be discussing Michael Oliver’s latest report in context of the stock market, as you can see on your screen.

Ten-year yields are up one at $4.44, the dollar is $106.63, SMB 500 is up 31 handles, $60.44, the VIX is $17.64 down 58, gold is $29.50 up 14, that’s on the highs and it is new all-time highs. We’ll be discussing that. Silver is $32.58, lagging but still positive, up $15.16. Copper is $4.53, up less than a penny, WTI is $70.64, up for natural gas is $4.04 down 26. Wow. Bitcoin is $95.775, up $4.60, $4.70, $4.80. Palladium $9.59, platinum $9.70, gold-silver ratio steady at $90, steady as she goes there. Grains are all down, $10.39, $4.85, $5.94, down 2, down 3, down 8.7.

We down the most in percentage terms as well as in sense terms. So, home page. We’re moving rather quickly. Tips do not hedge inflation as advertised, that’s an analysis. A lot of stuff coming out of Bloomberg’s terminal recently on precious metals as well as the shortcomings of treasuries as a hedge for inflation. And that’s our coverage of one of those posts that we thought were actually very, was very, very good. It confirms what people think about treasuries. I mean, tips. Breaking news, percent says no to re-price and gold trunks it off. People think he will re-price it higher.

He said it. He said he’s not. I’m assuming he’s not. And I’m moving on. If he does re-price it higher, that’s fine. But, you know, we’ll talk about it. We’ll talk about more of it. There’s a lot to talk about there. All right, here we go. Where are metals after last week’s stock dropping? The backdrop is we had a stock sell-off last week. And from there, we’ll take that stock sell-off and see what it implies for precious metals, gold and silver. The concept is basically a stack inflationary situation. It’s not stack inflation, but we could be moving towards that.

So anyway, a month ago, Wall Street grasped the existential threat posed by China’s deep sea technology. We covered that. Xerox covered it. And actually, Michael Hartnett covered it. They have, China allegedly has cheaper, more efficient and a direct challenge to the AI-driven stock rally of the past two years. Analysts that we just mentioned had discussed that. The concern escalated after a sequence of events, right? Oh, we’ll pop this chart off for you while we’re doing that. The concern escalated after a sequence of events. First, President Trump announced the Stargate Initiative. Yay, we’re going to spend $500 billion on AI infrastructure.

Almost immediately thereafter, China’s deep sea kind of hit the scene in a bigger way, claiming not only superior performance, but also a fraction of the cost compared to what Silicon Valley and Big Tech were spending. We broke down Michael Hartnett’s coverage of that in China, deep sea turns MAG 7 into lag 7. Where is that? There it is. Anyway, so there’s your backdrop. So stocks cratered. Sorry to go back one more time. Stocks cratered when the deep sea news countered the bullish news on the Stargate investment. And then we had a miracle.

The market just kind of rallied. And then last week was a big whoops. Now, the market’s strong today. Let’s see what’s going on if the Plunge Protection team or the ESF or just the dip buyers are back. All right, which brings us rather quickly and hastily to stocks. So that was the backdrop. Stocks might be headed faced out of the mud. That should be good for gold, right? And it is. Let’s see what Michael Oliver says. Gold versus the S&P 500 key shift underway. I’m paraphrasing him. Oh, that’s silver. We’ll do that in a second.

The relative performance of gold against the S&P 500 has been in focus since 2020. Gold sharp rise in mid 2020 led to strong outperformance followed by a pullback and a consolidation phase from mid 2021 where gold traded in line with equities. Now, there’s a chart of his. See if I can make that bigger. Do I have that bigger? Yeah. Well, let’s just do it this way. All right. A key level in this spread occurred December 2021, Michael Oliver says, when gold’s price relative to the S&P 500 hit 38.5%. That’s down here. As of now, gold has climbed to 49.1%.

Meaning gold’s price has risen 61.5% while the S&P 500 has gained 26% during this timeframe. Now, historically, this is, I think, the key new information there. Historically, when this spread breaks higher, gold tends to drive the move rather than just weakness in stocks. That would indicate stagflation. The breakout level for this month is 48% or higher and gold is already at 49% with a week left in the trading period. So, acceleration of this breakout or momentum increasing using his measures says that you’re better off being long-bowled and short stocks. I don’t think he’s recommending that.

I’m just paraphrasing the concept. So, this signals a clear shift in asset allocation, which is becoming more noticeable in market behavior. Like today, you can see it today. All right. Moving on to silver. For silver, which is not as easy because silver is an economic metal, even though it’s precious to us, it’s industrial to many. Hence, that’s the excuse to sell it every time the economy is doing poorly. And in the past, if you remember back to 2022, that was a quite effective maneuver. The Fed’s going to hike, the economy is going to slow sell silver, and it drove it all the way down until India said no more.

Anyway, this time, he believes that silver will not only catch up, but outperform. Now, let’s go through this. That’s my title. Second time is the charm. Back in March 2024, again, paraphrasing him, or maybe quoting him here, issued a blanket bull trend resumption signal for gold, silver, and the miners, based on long-term metrics, including annual momentum. That’s back in March of 2024. And you remember, you may remember silver started to rocket right after that. The timing was very good. Nothing has changed the positive direction of this momentum situation since. So nothing has negated the momentum.

The issue now is it’s just been sideways. You follow me? The issue now is what price level do we need to see to signal another spike higher or eruption, not merely just an orderly drift higher. So specifically, right, this is paraphrasing him, but we all feel this. Every time silver or gold makes a new price high and wobbles off of it, there’s a course of doubter analysts who claim a top or a major correction. And yet, all we end up with are a couple months of layered overlapping, pullback, and then upside resumption.

On that note, that’s what it, that’s, it’s called cap and trade. You know, it gets capped, someone caps it, BIS, funds selling, but the trend is in place. Again, it’s not the, it’s not the direction of the market that matters or the people that, uh, who are managing our economy. It’s the speed of the direction that matters. So Michael’s momentum indicator is a 100 week moving average versus, uh, the, the weekly chart. And it’s a rising weekly line by about 10 cents, 10 basis points silver to just trade up. I’m quoting him now to just trade up to that horizontal line.

Oh, momentum this week requires a trade up to 35 30. That’s a high number. Okay. So I want you to, I want you to think about this. If you see a marginal new high price above 35 in the coming weeks, coming weeks, not minutes, don’t assume it’s just another marginal new high in a trading range. He’s saying the next time, the second time to 35 and change will be the beginning of the next momentum, uh, uh, ignition higher, just like the one in March of 24. So to put a, to give you a picture of what that looks like, this is not his chart, but I’m trying to give you an idea.

This is the 100 day moving average. And this is the weekly silver chart. Okay. Here’s the 100 day moving average silver gets to here and that’s the high silver gets to here. That’s the current new high. And that’s the high. Now, if you’re looking for a reference point, uh, to parallel his concept, it kind of goes like this when silver gets $8 away from the 100 day moving average, that’s too far. Okay. So it pulls back when silver gets $8 away from the moving average, that’s overbought. It pulls back now. However, the moving average is now creeping up significantly.

Um, the pink line is my extrapolation. Excuse my, uh, cough there. So the next time that silver gets to $35, it should go actually to 36 or 36 50 is my estimation. That’s before factoring in Michael’s comment or concept, which basically is not only will it make this tracking high that I’m showing you, you know, there it is. Not only will make this tracking high, this not only will the tether pull it back from 36 50. Well, like it pulls it back at 33 and 35 before, well, it should pull it back at 36 50 according to my calculations, but he’s saying another important level will be reached and that will make the tethering kind of untethered.

And I can understand where he’s coming from on that. You look at it over here, it was tethered at say $3. I love the moving average. Now it’s tethered $8, right? $8. And the next momentum level, it’ll be tethered. I don’t know, $15, $20. This, this doubled. Okay. So let’s assume, let’s assume that it doubles from 8 to 16. That’s, that’s, I just want to share that with you. There’s more. We’re going to talk tomorrow about his comments on minors, which we didn’t get to today, but that’s it for now. News and analysis.

Again, a bunch of stuff. We’ll actually be interviewing Michael Oliver next Sunday for the founders and releasing that for premium soon thereafter. We’ll be talking about everything. I just can imagine details as they come out analysis tips. We saw that could be sent just sell the gold. Yes, he could. Will he? Well, this is actually not a we’re bullish article. This article here says he could just sell the gold, you know, does he have to sell the gold? No. Despite what you may have heard elsewhere, he can revalue the gold.

And then after you revalue the gold, you put the credit on the treasury’s balance sheet and they throw it into the TGA, just like was done in 1973. You don’t have to re you don’t have to sell gold when you revalue it, you don’t to get the money. All right. And all says US Treasury has lost his goals. Again, another Bloomberg story. Heart net, Crimea, Potomac River, very auspicious. The lack of mention of gold. We’ve been spoiled by Michael Hartnett’s work. He’s been talking about gold a lot, but he does talk about everything else.

So it’s hard to read this and I don’t want to make a read, but he is definitely talking about a stagflationary situation economically, right? Becoming economic singularity. That’s for founders. And we’re going to move on again. Geopolitics, geopolitically speaking, the meeting with Trump in Saudi Arabia with Russia puts the three biggest oil producers in the world in one place without Ukraine. Okay. So I’m looking at it like a minerals for oil deal. If we were to make peace with Putin, if we were to make steps towards reconciliation, that would mean Saudi Arabia and Russia would want to pump more oil.

He’s talking with OPEC plus, right? And he wants them to pump more oil. They want to pump more oil. And that makes, that’s a win-win for everyone. And the question is, is that bearish for gold? Yeah, it’s supposed to be bearish for gold when peace breaks out. Should it be bearish for gold? Yeah, it should be bearish for gold, right? I mean, it went up when this all started. We’ll but in the back of my mind, not a story. In the back of my mind, gold should not be this strong headed into that.

Okay. And so my, my, like all my radar is why are we repatriating all this gold if it’s going to sell off when we’re done? Now we’re not just repatriating gold. There’s a lot more going on behind the scenes. And just to throw this out there, it’s possible that we’re doing kind of an oil for gold revaluation. Simply put, Saudi, you guys are long gold, right? Yeah. Russia, you’re long gold, right? Okay. Right. As long as the price of oil is low and stable, the price of gold can go up. Go for it.

You pump the oil and we won’t put our foot on gold’s throat anymore because we just got our gold back too. We want it to go up as well. Let’s see. That’s my story. Charts, running late, charts, gold, new all-time high. There’s really nothing here. You’re bullish gold above 2907. That’s it. You’re just bullish gold. There’s a magnet at 3000 and it’s starting to attract the market. Silver, obviously silver suffers. When gold goes up, silver is economic. I don’t know what makes silver catch up to gold, but I know when it happens, it’ll also tie in with miners.

I’m long gold and I’m long miners right now. I’m short tech. So that’s it. I’m Vince. Have a great day. Thanks for tuning in and starting your day with us here. Hope you enjoyed the show and we’ll see you again tomorrow. Please note that this video is not intended as legal licensed financial trading advice and is to be used for informational purposes only. Please contact your financial advisor before making any decisions and thanks for watching. [tr:trw].

See more of Arcadia Economics on their Public Channel and the MPN Arcadia Economics channel.