Durables STB – Has The Fed Lost Its Ability To Push Gold Lower? – Dave Kranzler

TND Guest Contributor:  Dave Kranzler |

Shockingly, the Commerce Department published a durable goods report for December which showed that durable goods orders plunged 3.4% in December vs. a +.7% expectation.   Worse, November’s initial -.7% drop was revised much lower to -2.1%.    This was the fourth month in a row the durables printed a decling:   Bloomberg News link.  (FYI:  “STB” means “shit the bed”).

Well, this makes Obama’s baseless boasts of a strong economy in his SOTU speech look insanely ridiculous.   His SOTU should be a STFU lesson.  And guess what Barack, you can’t blame four months in a row of declines on the big nor’easter at the end of January.  Nope.  No “polar vortex” excuses now for an economy that’s plunging.   Every large company that has reported Q4 so far is confirming the obvious:  the U.S. economy is falling off the cliff.

As for the precious metals:  the way I’m characterizing it right now is that the Fed has likely lost its ability to manage the price of gold/silver/miners to the downside.  This does not mean we will shoot straight up (although we could, given the right set up events that could occur at any given time).  But I think we’re in “buy the dip” mode rather than “sell the rally” mode.  Yesterday’s stunning turnaround in the miners illustrates this, led by JNUG’s incredible move to the close that was 18% above its low of the day yesterday.

The fundamentals support my thesis, as over 1000 tonnes of silver have been removed from SLV since early December and both Russian and China are stockpiling gold at what appears to be an accelerating rate:

(graphs courtesy of www.goldchartsus.com – edits in white are mine – click to enlarge):

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About Dave Kranzler:

 I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics.  Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.

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