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What Are The Markets Telling Us? June 7th, 2019 by John Gross

Well, depending on where you look, you will see a very different story unfolding.

Nonferrous metals are trying to find a floor, and the same goes for ferrous metals too.

Silver and gold look to be headed higher, while platinum and palladium are hanging right around support.

Crude oil took a hard hit, as it fell below support and its 52 week moving average, while natural gas tumbled to a three year low.

Interest rates fell further last week, and the dollar was off against a handful of currencies.

The S&P 500 chart is perhaps the best reflection of uncertainty surrounding all the markets, and our economy. After going into a near freefall during the 4th quarter, the S&P recovered all lost ground and then some.

Today the S&P is back over its 52 week MA, and is on course to a crucial test of its previous high.

The first two charts in this week’s report are of particular interest, and also have a lot to tell us.

Gold and silver held their lows going back to January 2016, but both markets also made a series of lower highs since then. Now, however, gold is rising and approaching resistance, with a widening gap developing between the two.

This divergence shows up in the second chart which illustrates the relationship between gold and silver as a ratio.

That is to say, in April 2011 1 ounce of gold bought 32 ounces of silver, but last week, that same ounce of gold bought 90 ounces of silver.

If in the event gold is able to break through resistance, it will come as no surprise to see silver follow along, and begin to test its previous highs.

Regards,
John


View Charts (PDF)