Sweaty

Silver popped above $26 this week. This might not mean much to many, but to some it was huge. $26 was a level. A mythical line of resistance, a line that gave way. The gates are now open. The precious metals complex remains out of fashion. See the bombed-out share price of a Newmont for details. Gold has courted some attention with its YTD romp, but not a lot. Now silver has broken out. And for those who watch precious metals, if silver starts making the running, watch out. It’s show time. Given the number of articles on the topic, much of the media appears to have been surprised by the move up in gold this year. Surprised in the context of the droves of Western selling out of shiny ETFs. And yet the gold price has risen. Up it goes. That Central Banks, largely in the East, have been hoovering up the old rock for years only gets passing comment. So too, strangely, the unsustainable fiscal largesse of an administration under the heat from a resurgent Trump campaign that appears to be very much in-it-to-win-it come the November kerfuffle at the polls. That precious metals are up should be something to make any investor shift uncomfortably from one buttock to another. The heat in the space whispers of a catcall on the Fed being able to bring inflation down to the much fangled 2%. It suggests too there is zero confidence the fiscal boom-boom is going to stop anytime soon. When metals like gold and copper rally together something is up. Brent crude is through $90. Soft commodities too, are all up. It’s all getting a little sweaty. Inflation wasn’t caused by supply chain issues, it was caused by unprecedented money printing, money that is now sloshing around and diffusing into prices. With tech bellwether APPL testing 52-week lows, the rotation into hard assets has only just started. Silver is on its way to $30 and, given all the debt monetisation to come, it is unlikely to stop there.