Weekly Update

On a day when mother nature reminds us she is more powerful than man's ability to harness her. It is worth reminding Central Bankers that eventually markets will prove more powerful than their attempts to harness them.

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click chart to enlarge

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Regime Change

I have noticed the breakdown in the long-standing correlation between gold and dollar yen in recent weeks.  Tonight we show the new correlation between gold and Chinese yuan. The U.S. dollar is falling precipitously against both gold and yuan.  Will this new correlation perisist?  That is not guaranteed, but if it does it shows the western Central Banks have lost the narrative. And this new correlation is, I believe, very, very bullish for gold.  

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The tidal work has been spot-on of late. Interesting how the lunar-based analysis seems to get in gear as the calendar heads to Autumn each year.

 

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At Cross Purposes

An engineered dollar rally stemmed equity weakness (and gold strength.)  But a longer-term dollar rally will not be equity market positive, in fact it's quite the opposite as the money pump chart has shown us over time.

click chart to enlarge An engineered dollar decline saved equities in January 2016

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But the patient has not been responding to that medicine in the past month.  Now we're seeing engineered dollar strength.

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That dollar strength, in part, to get the gold genie back in the bottle.  But isn't the Central Banks now fighting against themselves?  Continued dollar strength will kill equities.  More charts and a video discussion inside!

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