➡ China is buying metals, indicating a strong resolve. Improvements in the market could come from stimulus measures, negotiations, and certain market indicators. However, there’s a fear that if foreign countries start pulling their money out of the U.S., it could lead to a global recession. This could be worsened by tariffs and currency instability. If the U.S. and China negotiate, it could negatively impact gold in the short term, but not in the long term.

➡ The article discusses how various financial policies and market conditions can impact the value of gold. It suggests that gold tends to increase in value during times of economic uncertainty, and that it’s currently undervalued considering the risks in the market. The article also mentions that silver has seen heavy buying in China, and that there may be more selling of gold and buying of silver in the future. Lastly, it advises watching the reactions of the market to Federal Reserve speakers, as their words can influence market behavior.

Today we have lots of questions, as I’m sure you do, and hopefully we have some answers. Welcome to the morning Markets and Metals with Vince Lancy where each morning Vince brings you the financial and precious metals news. Get you ready for your day. And now here’s Vince. Good morning everyone. I’m Vince Lancy. It’s Monday morning and this is the Gold Fix market rundown. Today we have lots of questions as I’m sure you do and hopefully we have some answers to those questions. So that’ll be our discussion. Our discussion is what is going on in premium? We have basically a daily newspaper and the ING commodities report.

Later on today we will do a write up with the help of some knowledgeable people on what a bear market looks like using 1987 and 2000 analogs. There’s the front page. We’ll talk about those in a second. Tom, let’s do the markets. You have the big four up there. Top right hand side, that’s the gold. Hourly chart. S P 500, that’s the hourly chart. The dollar lower left, that’s the dollar. And lower right hand side is 10 year yields. Let me put the daily up so you can get an idea of the perspective. Zoom out just a little bit before we get granular here.

All right. 10 year yields are down 1 at 398 off their lows. They were weaker all night. The dollar is 103. 02 up 14 off its lows and not on its highs either. The S&P 500 is 4938 off its lows. The Vix is 4909 off its highs, well off its highs. Gold is 3026, about $40 off its lows and about $20 off its highs. Silver is 29.97, up 39 cents, significantly off its lows and somewhat off its highs. Copper is 424, 425, down almost 11 cents, well off its lows but still significantly lower. WTI 60, 47, down $2, also off its lows, also significantly lower.

Natural gas 390 is up 10 cents. It was lower on the evening. I didn’t pay too much attention to it. Bitcoin is 76,600 and change well off its lows, down 1600. Palladium 915, up two bucks, was actually up one and a half percent I think on the highs after when silver started its rally. Platinum 9 16, 917, down three bucks, also was a lot lower and a lot higher. Middle of its range. Let’s call it gold silver trading 185. That market got down, I think to 95, but it’s stabilizing at about 100 now. That spread is actually indicative of what happened last night.

Soybeans 973, up 3. 4 cents. I’m not sure what their ranges were last night. Corn 453 unchanged. And wheat 5, 43, up 5 cents. Okay, so there you have it. We’re going to go through what happened last night leading into today. The only context we’ll give you if you’re trying to think about last night and today versus Friday and Thursday. This morning so far has been a continuation of Friday’s behavior with a restabilizing of markets for the moment. Let’s see. We like to draw your attention to the featured posts today. These are the stories we put out over the weekend and they were all related to what we’re talking about here.

The first one is Hartnet Gold clears protection this winter. Not buying stocks just yet. Very thorough report he did. A lot of actionable insight, some insight about gold and well, he’s not bullish. Stocks not yet. Sunday discussion, Gold squeeze aborted. That’s our Sunday Founders discussion where he discusses the CFTC Traders Report. And within that we went through an extended explanation of why, using other people’s work, our experience and our own work, why there was a gold squeeze and it was aborted. Still profitable, but had to be aborted. Someone tried to run in the shorts and we give a postmodern analysis on how that happened.

Standard Charter made a comment within a market comment in general describing how gold was sold to cover biggest margin calls since COVID That’s a news item covered in multiple places. That’s there for you. That’s an answer to what happened. Right. Margin calls everywhere. Special note, this is the economic reset. That’s a voice note that we put together. It describes where we are now. Trump’s approach may fail, he may fold his cards, but this is what has to happen. We explain why, going back to the 1970s. So that’s a little context for what’s going on right now, separating the action from the person and the necessity from the denial.

Let’s get into the main topic. We have questions that were asked of us and questions that we asked ourselves and questions that we’ve seen out there that were answered, we think, in insufficiently. So let’s start with, let’s go through them, right? So what is happening to markets? For decades, Wall street has been rewarded for being irresponsible. Now they are paying for it. Now, that’s little consolation for our own portfolios, but that is what is happening. Financialization is shrinking somewhat permanently as supply chains are being reassured. So are global payment chains. This is the reset. Trump is just ripping the band aid off.

He did it. Trump is who we. And he said he was a classic corporatist. Too many people did not believe it. Mostly Wall street traders. We’ve been reading a lot of Wall street trading reports bemoaning the situation. Not attacking him, but saying, oh my God, the end is near. Oh, that’s because they’re just all along. Personally, we do not fear what was done. We definitely fear if the administration loses confidence and. And what was done. And that is very possible. Overplaying his hand in coming negotiations or backing off due to party support dropping. These are big risks and they are covered in the economic reset.

So that’s a special note there. We’ll pull up a chart before moving on to the next question. The left chart, these are courtesy Goldman Sachs. The left chart, the blue. The blue is the United States tariffs. The red is China’s tariffs. On April 4, the United States said, these are our tariffs, basically taking Chinese tariffs up to a little under 60%. 54 to 59%. But 59% is what’s represented there. And then the next night, on Friday, China said, fine, we can play that game too. And China raised its tariffs to effectively about 53, 54%. Okay, so that’s the red line going up.

Essentially anything that comes from China, anything that is now 59% higher. Using an iPhone as an example, I’m not sure if it’s a perfect example. And anything that we sell to China, which I’m not really sure what we do sell to China other than bonds and maybe some natural resources, goes up by 55%. So it’s an escalating trade war. Next question. What do I do? If you are asking anyone this question, this is the best advice we can give. Okay. If you are asking anyone this question, including yourself, what do I do? I don’t know what to do.

Whatever it is, cut it in half, reassess and know you will be miserable either way. But you are no longer risking your sanity and your net worth on a coin flip. The next 1,000 points are a coin flip. That’s people with stress. People like, I don’t know what to do. Maybe the number’s not a half. Maybe like, oh, that’s too much. 25%. Pick a number, cut it down, and then how does your stomach feel? Can you sleep? Okay, well, then you can live. It’s that simple. If you’re asking me or you’re asking your family or you’re asking your broker or you’re asking yourself, reduce and reassess.

Now, there are people out there looking at precious metals or stocks. I mean, buying stocks on a dip is probably a really good trade. Now if you have the patience and know what you’re doing, they’re saying, I’m thinking about buying. Should I? Well, if you’re asking anyone, do half. See what I wrote above? Same thing. Moving on to price action. What does today’s price action mean today? Complicated but easy to see. Complicated looking but easy to see. If you’re being emotional about things right now, as we all are to an extent, it might be a little bit more difficult to see.

But the it right now it’s an extension of Friday. Okay, so Friday was a big sell off. Okay. Margin calls came in on Friday and then they came in again on the reopen. Right. So margin calls came in on the opening. Everything washed out. Everything washed out, Right. Gold washed out as well. Silver got hammered again. Copper got hammered the worst. And then a little hope entered the market and China also began buying metals. Now I say hope. I mean, stocks bounced off their lows. It wasn’t China buying metals bounced off their lows. Wasn’t China buying.

And then we’ll get into the whole metals ripping in a minute. Right, but that’s what happened there. Now there were some other things that happened as well, but that’s the way to look at it. Friday and Sunday are the same day. Right. Maybe three hours into Sunday night, it’s a new day. Okay, so that’s, that’s, that’s the proper way to look at it. It’s an extension. Forget about Friday’s close. People get margin calls the next day as well. All right, what about China related to that? China is back. And if they buy, they want holiday and if they buy metals, then their banks have been instructed to.

Chinese banks are the government. All right, that means their resolve is strong for now. So they’re buying metals. And you can see from the board what changes this for better? Well, stimulus, negotiation levels and indicators. So simply put, what would change all the markets for better to get them back to a more normal environment? Well, stimulus, whether it be fiscal stimulus, whether it be tax cut conversations, whether it be the Fed lowering rates. That’s one negotiation Trump and G or China and the US Sit down, announce that they’re going to sit down, that will stop escalation risk It’s a ceasefire levels.

While there are levels, technical levels, that will say buy it at this level, buy it at that level. Tom, we’re not a big fan of levels right now. We’re a big fan of levels when news comes out. So right now the market doesn’t really know what’s going on. But if you’re a technical person, there are levels that you’re going to trade. There are indicators that are also macro indicators that people use that are also, in our opinion, their levels right now those indicators are like put call ratios. You know, if you say I have half to buy, referring to that previous statement, then you say I have to buy and you’re looking for a tactical entry moment.

Well, look at put call levels, look at your technical levels, look at other macro indicators like tick volume, things like that. Those are things to look at if you’re wondering what changes it for the better. So stimulus negotiation, your price levels tactically and indicators, things that I look at. All right. And again, see our partnet walkthrough. These are things that he goes through clearly, it’s cryptically, but it’s clear. And we spell it out for you what he’s saying. If you’re looking for levels to get in, or if you’re looking for levels that’ll make you less stressed, ideas and concepts, they’re in there and they’re very clearly explained.

He’s the best on the street at this stuff. What makes this worse? Okay, this is our biggest fear. And this fear will be stoked on the street by neo Keynesian financial press. And it’s a real risk, but it’s minute. We’ll get into what’s big and what’s bad about in a second. But the biggest fear is, right, you’re going to hear things like if bonds start to rally while stocks stay down on the dollar’s week. That’s the biggest fear. Why? Well, in a crisis environment we’re going to. We’ll try and take a stab at explaining why. The biggest fear is that foreign sovereigns start taking all of their money out of the US if they are, you are on a path to global recession.

And then you risk great recessions, otherwise it’s painful. Normal market behavior. See, China retaliates, what it means, we go into that in detail. There’s a section called what’s, what’s our worst fear? What’s our worst case scenario? And it’s our way of phrasing what we’ve known and other people know, like Deutsche bank commented on it, zero hedges all over it, you know, and other people are. But the press is going to just start hammering this and without knowing why. So here’s a quick explanation. This sucks, okay? But stocks down, the dollar weaker, and the bond market stronger.

Is a healthy market digesting a bad situation, right? So the story goes like this. People take their money out of stocks and put it into bonds. Easy enough, right? Why does the dollar weaken? Well, the dollar weakens for multiple reasons, but the two big ones are domestically. People start betting on the Fed cutting rates, so the dollar gets weaker. Internationally, countries will start taking their money out of the US Somewhat. I’ll say, okay, I’ll take money out of dollar and I’ll put it into my own currency. Especially because bonds are rallying, right? So I’m a foreigner and I go, all right, I have some money in stocks, I have some money in bonds, and then I go sell my stocks and I put half it in bonds and I take half it back home.

Something like that. But that’s, that’s bad. But the point is, for the most part, foreigners will take the money out of stocks and put into bonds. They won’t sell dollars or they will sell dollars, but they won’t do both, okay? The money stays in dollar assets, if not in dollars. If they start to do both, that’s potentially catastrophic. And Luke Roman also has been talking about this, but we go through it in more detail and explain it. So it’s kind of like this. If stocks sell off and the dollar is weak for the reasons we explain, and then bonds start to sell off when they’re no longer perceived as a safe haven by foreigners, then that’s the rest of the world pulling their money out of the whole country.

And that’s what you have a risk of doing when you have tariffs. Repatriation of currency back to nations that need to use it domestically is one of the risks that we have right now. And it’s before the tariffs, but the tariffs make it more obvious if people start to pull their money out of the US En masse. En masse, however you say that word. If they start to do that in large quantities, well, you’re going to have high flying stocks, not be so high flying anymore. All right? So that’s what makes. That’s what makes it worse.

I think we have a chart there as well. Oh, yeah, here it is. Here’s the chart. All right. So this chart, I actually put this in the wrong spot, but this chart describes the worst case scenario. The worst case scenario are tariffs plus FX instability. That means Our bonds go down and our currency goes down. Bonds and currency down. FX instability. Kind of like the Liz Truss event. The mini budget and a Fed mistake equal big 1930s bear. So Hartnett is saying tariffs are one ingredient in a big 1930s bear market. And he will explain what he says in total in a second.

If what I described happens, bonds start to sell off while the dollar remains weak. That’s the second ingredient. And the third ingredient is a Fed mistake. So, well, this chart here. See if I can draw this. Here’s the crash. The crash already happened. Then the tariffs came. Okay, right. Then the UK leaves the gold standard. That was actually a big mistake. And only down here, only down here does it reverse. And it reverses when the policy errors are fixed. Okay, so that’s the market and what it did. Let’s move on to the next item. Did tariffs cause the Great Depression? That’s another thing you’re going to start hearing that’s over our pay grade.

But we’re going to parrot what Hartnett said. We already did that partially and added into what little we do know about it. The answer is not likely. In isolation, tariffs plus policy reaction errors to tariffs caused depressions as we had back then. Is this the first ingredient? Yes, but far from the scenarios in 1931. And Hartnett agrees. So here’s that chart. That’s the Fed funds rate going up and down with events. Now we’re looking at the Fed funds rate in 1929. In 1929 we had a crash. The Fed lowered rates. Okay. Tariffs went into effect while we were in the middle of a crash.

You could say that that was approximate. Cause we already had the crash. UK leaves the gold standard, which is a problem in and of itself. But here’s the biggie. Here’s the biggie. The Fed raised rates during a crisis. So the Fed reduced liquidity in an environment that needed liquidity. And it only was fixed when FDR did the New Deal. And when he did the New Deal, that was fiscal, fiscal stimulus. And then the Fed with a couple hiccups along the way, realized that they had to lower rates. Okay, this is the play by play of the Great Depression crash.

Then tariffs, then raising rates. And it ends when FDR panicked. And because the expression is when politicians start to panic, well, then markets start to get normal again. I hope that was helpful. So let’s do gold now. What do gold and silver look like when this is over? Over in the short term, if Trump and Xi sit down to talk, that is very bearish for gold. Near Fatal for leveraged longs, I would think in the short and perhaps even the intermediate term. But long term, not fatal. Tariff ceasefire causes longs to sell some. But the world is not going to re globalize.

Big dip. But discussion is not end of war and end of war is not even end of war. Now on top of that, whatever is decided in a discussion, well, we have to ease afterwards. So that’s supportive of gold if this is met with the correct policy choices. And by that I mean without a ceasefire. Right. It’s bullish gold, it’s bullish silver and it’s bullish stocks because it’s inflation. If this is met with bad policy choices, it’s bullish gold. Bearish stocks, bearish bonds and the US Dollar. That’s the, that’s the Great Depression thing. Monetary solutions are bullish gold fiscal.

So if we lower rates, gold goes up or stops going down and maybe stocks might stabilize a little bit. Fiscal spending solutions are less bullish gold if they’re properly targeted. We’re going to spend money on tax breaks, we’re going to support companies. That’s not going to be supportive of gold, but it’s going to, it’s going to rise. Gold’s going to rise because people have more money. Again, all errors are bullish gold to varying degrees. Again, see the Hartnet walkthrough. It’s really, he’s got a really good report this week. All right. One thing I noticed that I left open here that I want to, that I want to finish up on.

There’s a lot of risk out there and we really haven’t seen enough money come into gold considering the risk. So at this point it’s not overvalued anymore. And we did an open interest analysis on that on the weekend and it’s pretty amazing how well gold has held up the analogy. Not the analogy, but the, but the precedent I want to give you is during the great financial crisis after the Lehman moment, gold and stocks dropped. Gold dropped a couple percentage points and stocks dropped a lot. When QE started, gold rallied immediately and stocks kept dropping. Okay, so the first reaction to stimulus is bullish for gold, not for stocks.

The second reaction was. The second reaction was bullish for gold, slowing down and then bullish for stocks. So extra money when it’s printed goes into the safe haven. That’s what’s going on in China right now. Right. Does this affect China’s behavior? No. Chinese insurance companies are going to buy even more gold because they’re, they’re, they’re their citizens. Are going to say I want gold products because they’re scared right now. Scared about what’s happening in the world. Moving on to data on deck. Big week. Cpi, PPI and Fed minutes. They’ll be watched. There will be a lot of Fed speakers this week.

Normally we say ignore Fed speakers except for Powell. Right. But if you’re a tape watcher, we’re not going to say that this week. We’re going to say watch the Fed speakers. More important Fed speakers than others. But watch how the market reacts to Fed speakers. Fed speakers are going to come out and hold hands and do nothing. And if the market doesn’t believe them, then the next Fed speaker will hold hands even harder. And then the point is, does the market at some point start to believe in what the Fed is saying? So you want to watch the other speakers this week in premium ing commodity feed.

And we have the market analysis. Moving on to the charts. We’re going to walk through Friday and last. Okay, charts, daily chart 10 year yields. Take a look at that. They’re always look at the last three days. Right. Yields dropped. Yields drop. Yields drop. That’s good. That’s, that’s, that’s the market function. Normally now yields are rallying. They’re actually positive on a day. Are we hitting the panic button? No, we’re not hitting the panic button because the dollar is stronger. Remember, the dollar has to be weaker. The dollar also rallied. So the dollar rallying while yields are rallying is not unhealthy.

There’s risk, but it’s not unhealthy. So let’s move to stock. Remember, this is like a triangle here, right? Stocks, obviously low doesn’t make you feel good but well off their lows of the evening. So I think the margin calls are being digested. The vix, we’re not big fans of the VIX anymore as a, as a continuous indicator of the market. But in panics it’s extremely helpful. And if the VIX is down and the dollar is up and bond yields are up and stocks are off low, that’s the margin calls over for now. Right. So it’s the next news item, Tom, that’s going to generate volatility gold.

And there’s your proof. The margin calls came in on the open and stopped. Now we’ll get to silver, which is far more interesting. Silver also cratered. Not as big as copper, but silver seemed to lead the rally higher in all the metals, in everything. And I’m going to suggest that there was a confluence of events and one of the Events was what I just said. Another contributing factor was there was heavy buying of silver in China, which I couldn’t believe. They buy silver before gold, but there was heavy buying of silver. A third factor is we have been talking for probably a year here how funds will like to sell, sell silver and buy gold.

And short term plays, medium term plays. But long term, if you’ve been saying, oh, gold’s being remonetized and silver’s not, I think we’re going for a recession. You’re going to be long gold and short silver. I think want to move to this chart here. I think we saw that. I think we saw someone with a big position unwind now. Is it one person? No, it’s not one person. But is it a situation where someone said, look at that. I was right. Long gold, short silver, or half the world that’s long gold puked. And the other half the world that’s short silver covered.

But in, in any event, the gold silver ratio just got too crazy and some people stepped in. I want to zoom this out to a monthly. To give you an idea, I’m going to pull my ad levels up here. Right now. I have. This is when I was trading before and this is now. This is, this is a, this is a configuration. I’m not saying the market loved my level, but I am saying that this channel matters. This is the other channel that I was working with, you know, but it stayed in this channel. What happens now? I don’t know what happens now, but I do know that there’s probably going to be a lot more selling of silver.

I mean, selling of gold and buying of silver within the complex. And you can see that if you look at the other metals. All right, let’s stay with gold. Let’s go. Let’s stay with. Let’s go to oil now. So oil. China’s not buying oil. So China dumped China. Oil dumped. China didn’t buy it. Why would they buy it? They’re like happy with low oil prices. Saudi Arabians can’t buy oil and prop it up. Maybe Russia can by reducing production. Remember, they’re not buying oil to boost it. They’re just cutting production. So that takes a day or two.

Natural gas, no real help there. I mean, I understand the market in general, but this is margin calls. Whatever’s going on there is margin calls. You know, maybe someone was short natural gas last night. Who knows? It had to cover. Who the hell knows? Bitcoin. I was very excited about the behavior of bitcoin when gold was dropping. Look at bitcoin hanging in there. Well, the reality of it is bitcoin was hanging in there because Scott Bess had said bitcoin’s returning, not returning. Bitcoin’s becoming a store of value. And that’s what happened. So if you’re speculatively speaking, this is where I am.

If I get bullish stocks, I’ll buy some bitcoin because I think it is on its way to being a store of value. And at the same time, I also think it is a tech stock. It’s kind of like razzles. First it’s a candy and then it’s a gum. Who the hell knows? But that’s it. There’s the markets. This is a phenomenal, wonderful day for gold. Okay? Because margin people with margin calls sold it on the first day and it was bought by the first dip buyers. Probably some shorts buying Tom. On the second day, margin calls completely overwhelmed it.

When I say margin calls, I mean heavily leveraged funds, hedge funds are going under now. And on the third day on the reopen, more margin calls came in and it was caught. Right. And now we’re in US Hours. There will be some residual margin calls at these levels, but I don’t think the market’s going to do much either way until there’s either news higher or news lower. But right now, if you want to speculate, go to an hourly chart. Buy the 4 hour low from last night by by the previous 4 hour low and stay long, Silver.

I think you got to be crazy to be short now. I’m Vince. Have a great day. Well, thanks for watching this morning’s Markets and Metals with Vince Lancy. We sure appreciate you 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 license 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 La.
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