Today James Turk covers silver. Are we looking at $50 silver or more consolidation? Plus a look at the weak economy.
$50 Silver Or More Consolidation?
May 7 (King World News) – James Turk: Battle lines are drawn on NY spot silver. Downside breakout means more base building. Upside breakout puts $50 within reach in days/weeks, not months. Can’t predict the future but the manipulation (blue oval) failed, pushing the odds to favour an upside breakout. Time will tell.
KING WORLD NEWS NOTE: Silver Very Close To Breaking Highlighted Channel To the Upside Or Downside
Uncertain Outlook
Peter Boockvar: In the Fed’s statement, they made a point to start that ex the distortions to the Q1 trade data “recent indicators suggest that economic activity has continued to expand at a solid pace.” We can all quibble with that optimistic assessment. The commentary on the labor market and inflation remained the same as in the previous statement.
What was added was the obvious acknowledgement of the higher level of unknowns. “Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.”
Bottom Line: Stagflation
Bottom line, that stagflationary risk highlighted by the FOMC is a handcuff type acknowledgement that freezes them for now until they get more details on what the tariff regime globally will look like in coming months/quarters.
The response in the Treasury market was lower yields across the curve I guess on the belief that at the end of the day, that heightened ‘uncertainty’ will favor a focus more on the unemployment rate than the inflation one. To be clear though, today’s statement did NOT lean in any one direction in terms of priorities.
I will though go with what Jay Powell said the last time we heard from him last month that he believed that stable prices were the precursor to a healthy labor market. We look forward to the 2:30pm est presser for more color.
King World News note: The stagflationary 1970s saw the price of gold surge 25.5x and the price of silver soared 38x in price. Continue purchasing physical silver because it is the cheapest hard asset on the planet. The Gold/Silver ratio remains close to 100/1, a level which is historically unsustainable. Silver offers great value here. Buy on any weakness.
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