Vince Lanci: Why Gold Silver Spiked Before Selling Off On Friday | Arcadia Economics

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Summary

➡ Vince Lanci discusses the current state of the market, noting that gold and silver prices are up, while the dollar is down. He also talks about the Russian ban on metals and its impact on copper and aluminum, suggesting that despite the ban, it’s a good idea to invest in these metals. He also touches on the recent conflict between Israel and Iran, explaining how it might affect the market. Lastly, he mentions a report from Goldman Sachs that recommends staying invested in copper and aluminum due to their increasing value.

Transcript

The gold is 23 58, up 15. Remember, big spike on Friday, big sell off late in the day. Bounce back up to Friday’s unchanged number. Silver does not care about Friday’s activity. Trading 28 49, up $0. 64. Very strong. Welcome to the morning markets and metals with Vince Lancy, where each day he brings you the precious metals and financial news to get you ready for your day. And now, here’s Vince.

Okay, good morning, I’m Vince Lancy, and in today’s market rundown, we’re going to talk about the russian ban on metals, its effect on copper and aluminum, as well as rundown, and hopefully give you the framework to look at the israeli Iran situation. All right, so we’ll look at some market driving news, too, which is all the same thing today, but let’s get going. Right, where are we? Here we go, the markets.

The dollar is down twelve after being up on Friday because of war fears. Ten year yields are up five. The S and P 500 is up 28. Handles at 5151, 5150. For you Van Halen fans, seems to be a really important level right now. It’s really chopping around there a lot. The VIX is of 1699 backing off a little bit. The gold is 23. 58, up 15. Remember, big spike on Friday, big sell off late in the day.

Bounce back up to Friday’s unchanged number. Silver does not care about Friday’s activity. Trading 28 49, up $0. 64. Very strong. Copper is surprisingly kind of unchanged. Up four tenths of a penny at 429. 87. So that’s like ten basis points. Oil is down $0. 43 after spiking on Friday. Rallying, I wouldn’t say spiking. Natural gas, 171. We don’t care. Bitcoin is up 503 at 66. 194. Sell off into the Iraq, into the Iran.

Uh, we got the Iran attack, right? Sell off into the Iran attack. Big bounce down to 60,000. Big bounce. Stable in this area now. Ethereum, 32 45, up 89. Platinum, palladium, both down moderately. Uh, palladium, 1044, down four. Platinum, 969, down six. Doesn’t seem to be the russian ban. Doesn’t have an effect on those metals, at least tonight. Grains are all down. Soybeans are down a penny at 1168.

Corn is 428, down a penny. And wheat is 557, down $0. 07. Over a penny over, over a percent, I should say. Okay, these are the stories from the weekend. This story, it’s a must read story if you’re a precious metals person. One bank, they’re not a bullion bank, but they’re very important bank globally. They said the quiet part out loud and we have the whole transcript of what was said there.

So that’s a must read. Goldman raised their price target on gold 2700. And this is the mainstream media news we just put out. We’re going to touch on that in a second because that’s important to what’s going on today. Okay, let’s get to the main story. Goldman says stay long copper and aluminium. This obviously came from their british desk. Okay, we have excerpts from a Goldman report out today.

No one else has it. One other person has it and that’s the person who gave it to us. You’re not going to see this anywhere else, at least not at this hour. You’re not going to see this anywhere else probably today. You’re not going to see this anywhere else probably over the next week. But you’re going to see it here because this is where the real information is anyway.

Thank God for technology and social media. That said, let’s read an excerpt from it. Metals comment assessing the LME russian ban impact now this is a Goldman report. It’s a factual report. They’re giving you information to make your own decisions. But they do have a recommendation. That recommendation is to stay long copper and stay long aluminum. Even if you’re not a copper person, that’s significant. Staying long copper is saying stay long silver.

All right, here we go. It is important to recognize that these exchange focused rule adjustments are taking place in an environment where fundamentals for copper and aluminum are inflecting into a sustained tightening direction. After two benign years for fundamentals in 2022 and 2023. Now there are about twelve charts. This one here is russian metal already represents 90% of total aluminum stocks and increasing share of nickel and copper.

Interestingly, you’re thinking about nickel. They’re saying nickel’s not, not where to be on this one. Another comment later. Exhibit two, China now imports a substantial amount of russian exports and likely to increase volumes on price incentive ahead. That comment is an implication of like when the price of oil went down, China bought more for Russia. So if the price of russian copper were to go down because of sanctions, China will buy more.

That’s what’s going on. So next paragraph. Indeed, the strong performance of the industrial metals complex over the years so far is a trend we expect to gather momentum ahead. This view particularly resonates with copper and aluminum. They dont mention silver to support. This is about base metals. But this is where theyre going in the context over the last year and a half theres been plenty of copper overhang, plenty of production out there.

And you hear people talk about the spreads and that has weighed down on price. Its been stable, but it hasnt been the rockets that they want. Now with China doing a mini bazooka, the overhang of metal kind of disappearing, very similar to what happens with uranium. They got structurally bullish on the market. This puts that into overdrive. They’re saying that there’s just going to be not enough copper and aluminum around copper.

The muted effect that it is something to watch. Aluminum is up 6%, silver is up 2%, 2. 4%. Now I trade silver when I hear bullish information on copper. That’s the bottom line. And we’ll talk about that later on. Okay, that’s the report. We have all of it at the bottom for premium subscribers. So moving on. Market news. This market news is going to be Iran, Israel. All right, what we’re going to try and do, if you’re watching now, right 09:00 in the morning, 830 in the morning, if you’re watching now, you’re probably going to be hit out there with two types of information on the mainstream media.

If you watch that still, you’re going to get facts that are spun and tilted towards what they want to tell you. Israel defended itself successfully. Iran killed Israel. You’re going to see facts that aren’t facts. So I’m going to try. And then the other side of it will be social media. You’ll get takes and I’m guilty of takes, too. I think Iran’s in trouble. I think Israel’s in trouble.

That’s stuff like that. But those are all legitimate analysis. It’s just speculation. I’m going to try and give you a trading desk, geopolitical analysis. What happened? Right. We’re having a little conversation here. Not a conversation, a meeting. What happened? Iran attacked Israel directly. Why did Iran do that? This is not sarcasm. Because they’re Israel and they’re Iran. Now, the approximate reasons was Iran got fed up with recent activities by Israel.

How successful was the attack? Well, materially little to no. Data wise excellence. Now Israel supporters will cite the missile failures, apparently up to 50%. This is reported. We don’t even know what’s true anymore. It’s reported that up to 50% of the iranian missiles or drones or whatever they were using did not launch. So it’s a big missile failure. People who support Iran are saying, despite the public describing it as a failure, nothing got through.

One area got through. And that was the area they wanted to get through towards an airbase. So it was a success from that point of view. Depends on who you talk to. Now, going back to my comment up top, little to no material success, but data wise, excellent. All war is data collection in Ukraine. When you see us send an old shitty tank or an f 15 eagle from the mid eighties to help Ukraine, that’s to help us.

It allows us to give them cannon fodder so we can see what Russia is going to throw at it. Okay. You don’t send your best out there. So Iran was a big attack and it was a very dispersed attack. It’s feasible. And some intelligent people have said all war is data collecting. This is a good way to find out how Israel operates. You throw everything at it in, almost like a well telegraphed attack, and you get an idea of how they react to things.

And there are ways around defenses. Now, walls are knocked down by missiles and then new missiles can’t penetrate new walls. That’s how it works. Now it’s data collecting on both sides. But mostly Iran gets the data from this. Iran gets feedback on where their missiles had a problem, where their shortcomings were in launch. They get the practice. It’s a practice run. It’s also a data run. Now, how important this data is for them or not, I don’t know.

But this is not the backwards Iran that used to rig up an extra donkey to the oil drill to get it. To get more oil out. This is Iran that’s been armed and war is changing now. Okay, that’s. How successful was it, Spiel? What was Israel’s response? Well, Israel was threatening to respond and then said no response for the first 48 hours. What kind of response will they have? What kind of responses could they have? Will be asymmetric.

Will it be commensurate or will it be weak? We don’t know. Anyone tells you they do know or gives you a take on it, fine, I can give you all the takes you want, but we’re not doing that now. There will be, from people that I trust, there will be a difficulty in an air attack. Someone I talked to who’s in Taiwan, he said it’s 2 hours to get from Israel to Iran, and the airspace they have to go over is going to alert other people, whether it’s Jordan or what have you.

And if it’s Israel doing the attacking, they’ll get a two hour heads up if it’s jets. Okay, so that makes it difficult in the air attack. Then, of course, there’s us involvement. So us involvement would change the metrics as well. But notice that we’re not saying us involvement is a given. Now. That’s symptomatic of Pax Americana ending. Why did they do that? Why did Israel not attack? Well, it was possibly a us request.

Take the win is rumored to be what Biden said to Netanyahu. Politics could be involved, possibly. Israel knows a multi front war is not winnable without nukes. Israel can beat Hamas, Israel can beat Hezbollah, and Israel can beat both of them together. But Israel cannot beat an attack from the north, the east, and the west at the same west at the same time. That’s a multi front war.

And the whole Middle east would turn against them, and you don’t want that. And that would leave them with one thing that they have that no one else has, and that’s a nuclear bomb. Conventional war would starve them, especially when they’re throwing electronic rocks at you. Now. They used to throw rocks. Then they were lighting kites on fire and throwing them into Israel. Now they’re using drones. Same idea.

It’s decentralized, it’s inexpensive, it’s modern guerrilla warfare. What will happen next? That’s the question. There’s either going to be no response, a delayed response, or coordinated response coordinated with us. Us politics and israeli politics matter. Meaning Biden is worried about his election. Sadly, it’s part of the calculus. And Netanyahu is not well liked in Israel. I’ve been to Israel, and despite it’s almost being a theocratic state, it’s very secular within the country.

So Netanyahu is not well liked. So there you have it moving to the data today, us retail sales for March or out, and we have a moderate week. But tomorrow is probably the more important day because pal is going to speak again in the premium. We have Goldman’s analysis, and let’s take a quick look at the charts. I didn’t do that yet. We’ll talk about gold here. All right.

The hourly on gold. Okay, so Friday, this is the range we’re in. Friday, the market starts to take off on the open ramps. This was shorts covering at first and longs getting in, and then more shorts covering. And then at some point right before Europe closes. That’s the bank of international settlements territory. The market starts to get crushed. It gets crushed to here, which is essentially unchanged on the day, and then has another leg lower to the previous day.

So it undid 48 hours of activity in several hours. Then the market stabilizes, spikes higher because of the. Well, ostensibly because of the war and now stabilizes. $15. Silver is a much prettier story. Both stories are pretty in my point. In my case, same idea, same chart pattern, silver, but they push it down a little bit lower. This reeks of someone selling silver to buy gold. My opinion and the market now is on what I would call, it’s not necessarily an algo, but it’s an algo pattern.

If you want to take the silver and gold behavior in context of what was dominant during the day, well, you had a short covering rally. The market got out of hand. Somebody said sell it and it got sold. Now, the selling going into the weekend, frankly, kept a lid on it. A lot of commodities got hit yesterday as well. In fact, here, I’ll show you oil. Oil has a similar pattern.

Here’s oil, here’s the ramp up. Here’s the sell off. And then it kept going. Notice oil kept going despite a middle eastern war risk. Oil has bounced since then, but not much. That’s key. Oil is rallying off lower lows relative to gold’s rally, relative to silver’s rally. They want the gold. They want the silver now, too, it would seem. They really don’t want the oil. I mean, they want the oil, don’t get me wrong.

But pay attention to that. All three commodities, let’s just say gold and oil. Gold and oil are subject to the middle eastern crisis. Both rallied, both sold off. Gold bounced harder than oil during the middle eastern crisis. That should tell you that gold is stronger than oil. It also could imply that this rally is not really middle eastern based. Gold is rallying because they want it. They want the gold.

And so there’s buying that’s relentless underneath the market. Okay, that’s it. Let’s look at copper for a second, since that’s what they’re talking about. Where is copper? Here we go. I must have moved it. Did I demote copper? Copper, here’s your run up. Here’s your sell off. And copper is doing the same thing. Run up, sell off. And now the market is retraced most of its run up except for this long wick here.

Okay, so you could say that’s, you can’t say that’s Middle east. You can say it’s Russia. So my advice, my observation is there are buyers in all commodities underneath, and all are looking for excuses to buy. Some are hoping for dips. Oil has the most patient buying right now. Copper has would seem the least patient buying, but theyre disciplined. Gold has some impatient buyers who may have been pulled out of the market and now we can see what the markets going to do.

Finally, back to silver. Silver is recoupling with gold and if silver recouples with gold in a good way, that means when golds up percent, silver is up 2%. So I dont think people are selling gold as much as they used to. Every dip is being bought. We shall see how the week goes. I’m Vince. Don’t forget to subscribe. Have a great week. Thanks for watching this morning’s markets and metals update with Vince Lancey, brought to you each day by Miles Franklin precious metals where this week’s special is 1oz 2023 dated silver cougarans for only $3.

10 over spot. Koogarans come from the south african mint, one of the six major sovereign mints, and are IRA eligible. Find out more by calling Miles Franklin at 833-326-4653 or email us@arcadiafranklin. com 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. .

 

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