Now, I say all this because, well, when I read it, when I read what I’m about to share with you, that’s the process that I went through. It was very informative and it happened to be a report from Goldman Sachs. We’re going to touch on that and we’ll have the majority of it in premium. But this is kind of something that a family would, I think, appreciate, although in terms of the meat of it. So let’s start with that. Let’s start with everything. The markets, 10-year yields are up almost two basis points on their way to 5% at $460.

The dollar is $107.94 down 13. The S&P 500 is $60.18 down 15. The VIX is $15.41 up 69. Gold is $26.25 down eight and change, flirting with the 100-day moving average back and forth. Again, don’t treat it like it’s an important. I need to trade on the 100-day moving average. It crossed over, but assume that the 100-day moving average is a tether now for this market. And when it rejects it, just pay attention when it really rejects it. Silver, $29.52 down 21 cents. Copper, $4.08 down two cents. WTI up 52 cents at $70.50.

I really like oil next year, but I have to look into it. Natural gas, $3.48 up 11 cents. Very volatile. Bitcoin, $96.494. Always volatile. Up 840. Ethereum, $3.406. Up 75. Palladium, $9.21 down two. Platinum, $9.32 down two. Gold, silver, $89-ish. Soybeans down two. Corn down nothing, pretty much nothing. And wheat, which is off your screen, down a penny. All right. China affects the impact of China. Tyrus premium. Goldman’s desk assesses China’s tariff impact and quite detailed, I should say. Home page. So on the home page, we have three posts. Founders on de-dollarization. That’s the final draft before the pictures of the chapter that we wrote for Jordan Royburn’s forthcoming book, which having read half of it, it’s very good comparative history, technical analysis.

If you read it, you’ll find yourself trying not to buy gold and silver. It’s pretty good, I think. Pretty compelling. All right. Christmas matches from President Donald Trump. You saw that. And American Christmas holiday movie essentials still relevant. Discussion. Impact of Trump tariffs. All right. Here we go. I have some notes here. Question. Which parts of the economy are most sensitive to tariffs on China? Well, Goldman Sachs asked that question and answers it in detail. This is economics work. This is their economist work. And it’s quite good. It’s a starting point if you’re thinking about your own spending and your own lives.

And it’s intended as an investment tool, but it does definitely make you think about your own spending habits. Okay. So, Goldman expects a second round, a second to Trump administration, sorry, to raise average tariff rates on imports from China by about 20 percentage points. Non-consumer goods will likely see bigger hikes than consumer goods. There you go. Now, tariffs can add about, so it’s higher input costs. Tariffs can add about 0.5 percent to final output costs, which translates into up to 30 percent of operating profits for sectors like machine tools, auto bodies, furniture, and textiles.

We have a lot more detail on these below. But looking at this chart, vacuum cleaners, footwear, blankets and rugs, household art, household appliance, table work, it comes down to three industries in the consumer good area. And they are, I may have to go back to find these. There they are. The U.S. relies heavily on China for certain consumer items, appliances. Think about your budget now, 10 to 24 percent of our purchases come from there. Footwear and clothing, 10 to 30 percent. Consumer electronics, especially telephones, telephones 39 percent, whether it’s Samsung, not Samsung, well, it’s related to China.

Whether it’s China related telephones or Apple phones that are built in China, however you look at it. In their baseline scenario, in Goldman’s baseline scenario, fully passing these tariffs through to prices could lift consumer costs for Chinese origin goods by 2 to 10 percent. So if they were to be able to pass those through, that’s how much your prices are going to go up. So that may be obvious to you. They’ll be able to pass them through unless the Fed hikes, the Fed hikes that we won’t buy and then they won’t be able to pass them through.

So if the Fed hikes, our inflation control is their recession creation. All right. What about stuff we sell? All right. Higher input costs, tools, auto bodies, furniture, and textiles. Reciprocal tariffs. Retaliatory tariffs is probably another way to look at it. Here, I’ll leave that up there. All right. So that’s. This chart’s a little bit smaller, so I’ll give you a little more detail on it. There are three ways that goods that we sell to China will be affected by Chinese, by our tariffs going on them. First is higher input costs. So tariffs, as I said, can add about 0.5 percent to final output costs, which translates into up to 30 percent of operating profits for sectors like machine tools, auto bodies, furniture, and textiles.

Second, retaliatory tariffs from China. These are the industries that’ll be affected the most. Agriculture, forestry, raw materials are most affected. The reason I hesitated is because it’s kind of interesting how we only sell raw materials to them and they sell finished goods to us. We’re behaving like an emerging market. We’re a third world country in comparison to them now. All right. So over 80 percent of U.S. would cereal and animal product exports head to China, right? So we sell them their food. More than 50 percent of soybean exports. Those are the individual U.S.

exports to China go there, as do nearly 20 percent of autos. The 20 percent of the autos we make are sold in China, even though we don’t sell many things abroad. So think about it. We buy auto bodies from them, right? And then we put them together here and then we sell them back to them. You know, that’s inflationary. So export restrictions on critical raw materials. Now, most of us know about these as metals people, but over 70 percent of imported natural graphite, rare earth compounds, and antimony, antimony, I don’t know how you say it, come from China.

Now, there’s another, you know, that’s what people are going to give you the headlines, but there’s other ways that they can do it. There’s a soft way that that can be done. That way is you don’t put a tariff on it. You just don’t make any available for sale. So when we go to we go to buy silver, there isn’t any, right? Remember, they used to produce silver for export. Now they consume all their own silver. And so, therefore, silver will go up in price in other places, especially because they’re buying it from Latin American countries.

All right, much more detail on these from a macro perspective in the premium section. I went through that already, and I went through that. Now it gets bigger. There you go. I’ll leave it up there for a second. So there you go. Wood, photographic film and rolls, Scandian mixtures, cereals, iron ores, animal products, vitamins, metal rolling mills, flowers, soybeans, you can see all that. Top 10 products ranked by annual export value to China, right on the right. And again, on the left, top 10 products by U.S. exports to China as share of total U.S.

exports. All right. What risks does it mean for the economy in the federal? And that’s not in the Goldman report, which we have summarized and all the ad graphics attached to it. But this is the decision analysis as a trader or as a family person, right? What risks does it mean for the economy in the federal? Well, it puts us on the horns of a dilemma as always, right? You have recession, that’s one horn, and inflation, that’s the other. Or you could say stagflation and inflation, right? And the reason I think this is important is because it’s very similar to the COVID aftermath.

The COVID aftermath was supply chains were disrupted, right? So things we wanted to buy from them went up in price, right? And then the Fed had to raise rates to keep demand down. So the recession part was created here. Now you have the same situation, a similar situation brewing. And that situation is stuff we need to buy goods will go up in price again, finished goods, right? And stuff we need to sell raw materials will go up in price again and not be bought. So domestic industries will suffer that depend on exports to China.

And consumers will suffer on things that they between the horns of a dilemma. During COVID, the Fed had to choose between fear of recession and fear of inflation. And fear of recession was, oh, well, if I raise rates too quickly, then with the supply chains down, everything will collapse, right? And if I raise rates too slowly, we’ll get inflation. Well, they raised rates too slowly and we got inflation. They always feel they can control inflation faster than they can control deflation. That’s because they benefit more from inflation than they do from deflation.

Anyway, I have a lot more on this in the bottom to give you an idea of where I think we’re going. But the short story is they always choose inflation. Even if they don’t choose inflation, they end up choosing inflation eventually anyway. And I’ll explain more of that at the bottom, along with the report, which is down there. News and analysis. These are the unlocked favorites for today. American Christmas, that’s already unlocked. Fort Knox adds, has nothing but moths and IOUs. Soltan’s gold, and again, deconstructed. Special Trump will monetize gold’s value 3,000 and higher.

Bank of America on gold and silver, mostly silver, and Silent Knight, an unlocked story from somewhere else that we thought was quite good. Data on deck today, events, US trade balance and goods. It’s Friday, the last Friday before New Year’s. And in premium, Goldman on China, tariff changes and their impact. All right, we’re parts of the economy most sensitive to a trade conflict with China. We’re going to come back to that. Stay with us in the premiere. We’ll do that in a second. Let’s just go through a couple of charts. I have some notes here.

My notes. If silver breaks $30, that’s not enough. It needs to get above 3050. My opinion. This is a short-term comment. Let me hide these Bollinger Bands here. All right, put it this way. There’s a seller in here where that’s where the buying dries up. And if it gets above there, everyone’s going to be bullish. And there is a large percentage chance it could skate. I like these skating scenarios from here to here. And I would hope for that. There’s a good chance of that. But if it doesn’t happen, it doesn’t happen.

So above 30, you’re bullish. And if you have, let’s say you have five to buy, you buy one, right? And if it comes back after testing this area to here, you’re nervous. If it gets above here, you’re super bullish. You buy another two or three, right? And you expect that we should go up to here. So I’m friendly above 30, buying one fifth of what I would normally buy. And I’m very friendly. If it skates to 30 and a half, 3060, it stabilizes there. That’s the silver chart. That’s the silver chart short-term. Gold chart.

Gold chart, I mean, it’s a similar situation except that gold has less to reject. See, I’ve talked about the structure before this kind of like, I don’t know, whatever, is it a devil structure or a Batman structure or an upside down Bart Simpson structure? Look, in the past, let me, how do I get this back to normal size, right? In the past, when gold would do this and reject, it would do that and reject. It did it twice, and it never really got below here. I’m starting to get very friendly to this market.

And I’m going to show you why in a second. Hey, here’s a wonderful chart that tells you, tells me why I’m more friendly to the market than I was, say, three days ago, coming out of this holiday season. The gold line, this is courtesy of our Blava, a gold fix founder, and he shares it with us and we’re sharing it with you. The gold line is the price of gold and the red line, don’t worry about the blue line, right? The red line is the open interest in the market. Now, the story that I’ve been saying repeatedly over the last year and a half has been higher lows in the open interest has accompanied higher lows in the market, as opposed to a market where before, let’s say 2022, higher lows in the open interest did not happen.

And if they did happen, you did not get higher lows in the market. So the market was kind of cycling. Market and open interest would cycle like this. Now, market and open interest are cycling like this, right? And it was more pronounced going into the election. Now, they’re splitting in a good way. The open interest is now going back to its old cycle, right? So here we go. A low, a high, a low, a high, a low, right? In here, this is the run up to the election. People refuse to bail. They keep buying dips all the way up.

Now, here we are after the election and everyone is just, you know, out of the boat, out of the pool, whatever you want to call it, right? So open interest is out. We have a dead cat bounce in the open interest and the market comes off. Now, here we are back to our old bigger picture cycle. High, low, high, low, high, low. Market. Low, high, low, high, low, high, low. We’ve worked off, I’d say 90% of the post-election and post-brick summit volume. The macro discretionary has bought. The retail has bought. The retail hasn’t gotten too hurt.

And the open interest is down, right? Back to where it was in the market. Again, remains here. With bullion banks selling again, it’s very encouraging for the market. If a buyer were to appear, the bullion banks would probably be in a lot of trouble again because now they’re selling again and the market would start to take off. I’ll put a little bit of a finer point on this for you. Who’s been, to link this better, who’s been buying if all this open interest was selling? If every long was selling, I don’t want it anymore.

I don’t want it anymore. I don’t want it anymore. Well, there’s one of two types that are buying it. It’s not the speculative longs they’re getting out. It would be either the bullion banks, which are buying it, right? Or their customers, which they’re buying it on behalf of. Now, if the bullion banks are buying it for their own book, which they are, they’re not letting it fall as much as they used to. They used to go, oh, gold’s dropping. I’m going to go to lunch. I’ll come back in a couple hours and I’ll buy it $50 lower.

They’re not doing that. They’re on their desks going, gold’s falling. I should buy some. I should buy some. And they keep buying it all the way down. The biggest shorts in this market, the biggest motivated shorts in this market are the bullion banks. They’re still covering more aggressively. When a, when a fund says I want to sell it and they hit a bid, the bullion banks say, okay, I guess I’ll buy it. I’m not going to let it drop anymore. They’re no longer passive players. They’ve become more aggressive in buying of dips. Now, why is that? Well, because I think their trading has lost a lot of money over the year.

And let’s say they net lost money, but they’re trading, their principal trading has lost a lot of money. The second reason is they probably see buying underneath right underneath that 100 day moving average. We could be in for another cycle that we had last year between, again, between December 3rd and February 28th, that long choppy sideways range with a nice range, an open interest kind of oscillated in the lower area. And someone kept buying. We already know someone’s buying, right? China bought more than expected in October on the now cast that Goldman had.

China’s central bank is back buying, you know, five tons, but they bought another 55 tons, you know, on the slide. Everything about this says that we’re in for either a sideways move that closes higher or a violent spike lower that’s bought. So that’s how I feel about it. So stay with me and we’re going to do the premium section next. Where is that? Okay. So stay with me and we’ll do this now. Oh, and by the way, before I go, before, before I go, if I don’t see you or we don’t connect early next week, Happy New Year to you and your family.

Well, thank you to Vince. And thanks to everyone watching at home. Sure. Hope you enjoyed the show and we appreciate you being here. And before we wrap up, I’d also like to thank Fortuna Mining who kindly brought us today’s show. And Fortuna did have some drill results out from their Seguela mine where they extended their kingfisher deposit with a drill intersect of 4.1 grams per ton gold over 15.3 meters. And they also averaged 3.3 grams per ton gold, 150 meters further along strike. And to find out a bit more about the drill results from Fortuna.

Well, we have a video we posted gives a brief recap of that and that one is coming your way now. [tr:trw].

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