Vince Lanci Still Expects Silver To Outperform As Metals Rally | Arcadia Economics

If silver and gold are in their acceleration phase, and they’re moving in tandem, which I indeed pendently agree they’re moving in tandem, then in the moves higher you’re going to have silver have a much more explosive beta to the upside. Welcome to the Morning Markets and Metals with Vince Lancey, where each day he brings you the precious metals in financial news to get you ready for your day. And now here’s Vince. Well, hello there my friends and good morning. Chris economics, and just a quick note before we get to Vince’s show.

Wanted to let you know the rule symposium beginning actually Sunday July 7th until Thursday July 11th, and this is going to be in Boca Raton, Florida. I will be there on Tuesday, possibly Wednesday as well, but certainly if you’re interested in the metals, this is a good show to check out. Obviously Rick Rule will be there. Jim Rickards, Nomi Prince, Andy Scheckman will be joining us as well. So certainly a lot of speakers, many of the folks that we have on the show, and you can also take a look at the schedule, which by the way you can watch this online as well.

This is not just for in person, although you can attend in person, but either case I’m going to put the link to that in the description field below. Just go there and click that, and that will be the rule symposium. Again, I’ll be there on Tuesday. I know Andy Scheckman will be there all week. With that said, now we’ll turn it over to Vince. Good morning everyone. I’m Vince Lancey, and today’s Market Rundown, we’re going to talk about silver’s upside potential as well as food’s downside potential, as the tentative title suggests. Specifically, we have some excerpts from Michael Oliver’s Weekend 360 report, as well as some key charts from the Goldman Sachs CTA analysis that came out last week that I think is going to be very important moving forward.

We’re also going to, what else are we going to do? We’re going to, well, we got Michael Oliver, we’ve got Goldman Sachs, that should be enough, right? Oh, and then I’ll talk a little bit about truth in food inflation. Let’s start with the prices. Goal is at $18 at $23.73, but let’s start at the top. The dollar is up seven at $1.0494, 10 year olds are $4.30, up to S&P 500 is $55.67, up seven handles. VIX is $12.67, up 20 basis points. Gold is, again, $23.73, down 18 bucks. Silver is $31.03, down 18, 19 bucks.

Copper is $4.64, down 2 cents. WTI, down 97 cents at $82.58. Natural gas, $2.25, basically on the offer side of unchanged. Bitcoin and Ethereum, $57,092, up 1,200. Ethereum, $3033, up 100. So Ethereum reaches back above $3,000, and Bitcoin stabilizes after a wicked sell-off, likely on, at least partially on the Mt. Gox, unwind, as well as some German government selling of Bitcoin. I don’t know what the hell they’re doing there, but they’re doing it. Platinum, Palladium, $10.15, Palladium, $10.15, Platinum, $10.15. So these two metals, last week, Platinum took a shellacking and Palladium held up, relatively speaking.

So that pair flipped, but now they’re back at parity. Both are down a little over a percentage point, down 11, down 10 bucks. Grains are down uniformly today. So soy, corn, and wheat down 1, 1.3%, 1.4%, 11, 64, down 12, 3.96, down 5, and 5.84, down 8. All right, so there’s your gold chart. Okay, we’ll just do this very quickly. The buyer, the second buyer came in here, and then when he got done buying, it went back down to the first buyer, and now you’ve got selling them up here, but we breached it.

And well, we went to the top. Last week was a very good call by Michael’s lead-in and our re-mission comments as well. All right, so let’s get to the silver upside, right? That’s what we’re here for today. Silver upside and food downside, right? So there’s what we have. Let’s go to the front page. On Sunday, we discussed the commitment of traders report, which did not come out. CFTC did not release it. They tend to not release them when gold and silver make new highs, but that could be a coincidence. The main title of that discussion was, is a bank about to get smoked short again? We think that there’s another short bank in the market that needs to cover.

This is why gold rallied so aggressively on Friday. That was the icing on the cake, was Citibank announcing that they believe there’s going to be eight rate cuts next year. We have that covered. And there’s the re-ignition statement that we made the other day. All right, let’s get to it. So Michael Oliver puts out a report every weekend, MSA 360 degree weekend update. And he goes through updates to markets in general, and then focuses on markets that have caught his eye, whether it be bonds or stocks or gold or oil or what have you.

This week was, I think, a little bit of a victory lap, right? Because a week ago, we had discussed it here. He had said that if we get above X levels, we will have a re-ignition in gold. If we get above Y levels, we’ll have a re-ignition in silver. And his comments were silver was likely ending a correction and gold is poised to have its momentum higher. And we got both of those in spades. So it wasn’t even a gray area. By the way, that’s a great sign of a bull market. When you don’t just touch the level, you just blow through the level.

That’s a sign there’s a lot of people playing. So he updated it and he had a special section on silver and gold this weekend. And we’re just going to takeaways from it. That’s the recap and update. And we’re going to go through one section that we think was specifically especially interesting because he answered a question that we were asking while we were reading it. So anyway, recap and update, our update, MSA momentum levels were pierced last week. The correction is likely over in silver and gold, such as it were. I think that’s the expression used.

The metals are now moving in tandem. That’s our comment. But he corroborates that. Gold had led this rally. And then silver caught up and then silver outperformed. And now they’re in lock step, which is a good thing. It means it’s no longer central banks buying gold. It means it’s everyone buying everything. Number four, momentum acceleration phases upon us. That’s his expression. I think he’s talking about not a blow off itself, but the fact that the market can now overperform, momentum can accelerate. And you see those when a market was from 35 to 50 in silver, quickly, that type of thing.

So as I was reading this, those were my takeaways. Given the above, I asked myself, what is a reasonable price for silver if this truly is an acceleration phase of the bull market? Well, as I was asking that, this came up. So I’m going to share this with you. Silver behavior and acceleration phases of bull markets. Now, he has his normal charts and everybody has this, I think it’s kind of a special chart. He goes, quoting him, the peak spread readings seen in those late bull trend acceleration phases circled the 7980, right? And circled this 2011, such as 7980.

And in 2011, silver rose to 6% of the price of gold in 7980 and to over 3% in 2011. So he’s looking at silver, he’s looking at the gold silver ratio, but just as a straight percentage. You know, it’s kind of like, instead of 73 to one, it’s one and a half percent. Silver is one and a half percent of the price of gold. So the chart’s upside down for him. We’ll see that in a second. So he shows this chart and it’s, I think it’s kind of an informative chart for other reasons that I’m going to study it.

For example, this is the hangover from silver. This is the re-monetization of gold started in 2010, right? And you can see silver going down. And now it looks like we’re almost like at a welding bottom for the gold silver ratio, meaning silver can go up relative to that. Anyway, so the next statement he says is, we argue that reaching such levels again, in what is now another acceleration phase should be expected. Currently the spread is 1.32% and rising. That’s this last line here. All right. So what does that translate to in prices, in price terms with gold at 2400? So we did a little chart workup.

We did it his way. We flipped it. So it’s no longer looking at it as the gold silver ratio in 70, 73. It’s looking at it in terms of percentages and it’s upside down. So this line represents, he generally covers this area, but we went all the way back because we wanted to see 2011. This is silver at $31. With gold at 2400, let’s call it 2400 for the moment, but optimistic, but let’s call it that. With gold at 2400, this is silver at 1.3%, which is what he discussed, right? In 2011, this is silver at 3% of gold.

Okay. And then going back to 7980, which is not on the chart, it goes up to 6%. So at 1.3%, this is silver at $31 with gold at 2400. With gold at 2400 and silver appreciating to 3%, it’s an entirely different price. We’re going to show you all these prices, 1.3%, 3%, 6%. We’ll show you those levels. Okay. So if we’re in an acceleration phase, as he contends, then there’s a very good chance that we’re going to do this, at least. So you can expect silver. If we’re in an acceleration phase, that means they both move in tandem, they both move higher.

Then you can expect the markets to move in tandem with silver at, here we go, $31 at 1.3%. At 2%, it’s $48. And the reason I picked 2% is because he mentions in his write-up, he goes, 2% is not a big deal for silver. It happens frequently. So $48 would not be a surprise. Put it this way. With gold at 2400, we can go to $48 and it’s still within the realm of normalcy, given the price of gold. Okay. 3%, which is 2011, gold at $2,400, that’s silver at $72. And 6%, which is $79.80, that’s gold at $2,400 and silver at $1,440.

So if we’re in the acceleration phase, with silver at 1.3% of 31, at $31. At 2%, it’s 48. At 3%, it’s 72. So the value of silver is anywhere between 31, it’s pretty wide, right? And $144. I’m going to say that this 2% number is definitely doable. And if gold starts to rally, you’ll probably see $48 very quickly. And above that, I think we get into his 3% to 6% phase. That’s not going to happen tomorrow, but we’re in that phase or era. And that could last anywhere from two months to two years.

I don’t know how his metric works. But the point of all this is that if silver and gold are in their acceleration phase, and they’re moving in tandem, which I independently agree, they’re moving in tandem, then in the moves higher, you’re going to have silver have a much more explosive beta to the upside. And the insights tell me that, like, for example, look at today, gold’s down $17, silver’s down $0.18. That’s because the buying in gold that came in on Friday isn’t buying right now. And the silver isn’t buying right now either.

But there’s no one out there selling silver. There are longs in gold that are selling gold, which brings us over to Goldman Sachs and the CTA aspect. Goldman Sachs has a CTA report out. They put it out once every two weeks. It’s not generally available to the public, but we have access to it. And this chart, as small as it is on your screen, this slice here, that was the amount of commodity trading advisor loans that were in precious metals a month ago. And this is the amount today. What does that imply? That implies that the CTAs or the smaller hedge funds and the large retail have exited a lot of their positions in precious metals, and yet the market is stable to higher.

That means, number one, they’re not as important as they used to be. And number two, it means when they get back in, it will go higher. This chart here, I’m sorry, I wish I can make it bigger, but I’ll just give you a translation here. It’s gold on the left and copper on the right. Gold has, from these small momentum type sellers and buyers, sellers below, the market drops, they’re going to sell. And if the market goes up, they’re going to buy. I’m going to tell you in both instances, this is bullish because the sellers below aren’t long as getting out anymore.

There are people who get bearish quickly, very momentum oriented. And the buyers above are creeping in. They’re not really panicking. So this market is set up for dry powder for CTAs to buy between now and August. I’m not going to extrapolate too far after August on this data because this data is very seasonal. It obeys the seasons of the year, and gold seasonality ends in August, and it gets a little bearish. Anyway, moving on from that, let’s tie this all together. We’re likely in a momentum phase. Now, I don’t have as numbers to show you here, but unless we get below a certain level in momentum, then most prices should be bought on a dip for gold and silver.

Like today will be an example of a dip to buy. My personal feeling is I’m not worried about gold going down unless we get below 22.90, 22.89. That’s where I get worried because then this whole structure becomes a topping structure. I don’t see that yet. There you have it. Silver, on the other hand, I don’t have as decent of a downside feel for it, but it’s actually pretty easy. You draw a trend line here and you can work with that. This trend line should be something that’s respected on the way up. Moving on to food.

All right. In market news, the power to raise prices is slipping from some of the biggest US food and packaged goods groups, threatening their sales growth even as it spells relief for inflation-bruised customers, consumers. Companies that imposed years of relentless price increases are now rolling out more discounts, adding coupons, and spending to put their products front and center in store aisles. Many have warned of a new frugality in households, especially the poorer ones. Okay. This is bullshit. I’m going to tell you why. Threatening their sales growth, not their profits. See, they have to lower prices when people stop spending money and they’re already complaining that they have to lower prices, which is a signal from these companies to the Fed to lower rates to preserve their profits.

That’s how they communicate indirectly with the Fed. Now, see how they say they’re rolling out discounts and adding coupons? That’s how they lower prices. See, they don’t lower prices anymore. The price goes from $1 to $2. You can’t afford it. They don’t lower the price to $1. They keep it at $2 and give you a discount that lasts for 30 days. Oh, we’re on a discount. So, they have inventory they want to get rid of. So, prices are not going lower ever again for food. Prices will not go lower ever again. The discounts are in shit they have in their aisles that they can’t get rid of that they want to turn over.

This is all an appeal by food companies to get the Fed to ease to preserve their profits, not their sales. People are still buying food they need to eat. Bottom line here is I wouldn’t call price gouging. I would call it the free market. And the free market says people don’t have the money anymore. Lower your fucking prices. And if they don’t lower their prices, well, then they’re going to be stuck with inventory. And they won’t ever lower their prices permanently. They will discount until the inventory is gone. That’s why you’ll see cupcakes on sale two for one at stores now.

And when they run out of them, it goes away. They’re not discounting everything. They’re discounting what they need to get rid of. Anyway, I just wanted to share that with you. Today, this week, this week is going to be highlighted with CPI on Thursday and PPI on Friday. Today, you’ve got consumer credit. But I think pal talks today. No, no, pal talks tomorrow and Wednesday. So a pretty eventful week because there’s a lot of speakers, but when there’s five speakers and only pal and pals, one of the speakers, no one else matters except for pal.

So we’ll see what happens on 10 o’clock today as he speaks to Congress, as he speaks to the Senate. So it’s a quarterly conversation and then CPI going back to the markets. I’m telling you, I would like to see I would have liked to see gold not be this low. It’s not to say it’s not a dip to buy. In fact, it is a dip to buy. If gold gets above 2377 after the first hour, it’s probably a buy for the rest of the day. Okay. Similarly for silver. Silver’s just fine. I wouldn’t be worried about silver unless it closed below 3088.

That’s it. I’m Vince. Have a great day. Well, thanks for tuning into today’s markets and metals with Vince Lansing. And once again, just a reminder that this coming week is the rule symposium July 7th to 11 in person in Boca Raton, Florida, and also available online. And you can take a look at the schedule to see a lot of the topics, a lot of gold and silver coverage that will be there. The link is in the description field below. Hope you’re all having a great day out there. 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].

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