from Silver Doctors:
SD Outlook: The dollar is surging, the lira is crashing, and gold & silver are clinging for dear life to whole number support…
Depending on where one looks online at the tickers depends on the real time price for the underlying.
Some website’s show the bid, some show the ask, some show different contract months, some show the last price, some prices don’t sync but every few minutes, etc.
Trading platform ThinkorSwim right now, by default, shows the gold December contract (GCZ8) and silver September contract (SIU8).
In other words, it’s a penny here or a penny there, and some have called “spot price” of gold below $1200 as of this morning. Regardless, there was a bounce this morning after the spike low, but the trend is clearly in a downtrend.
Here’s a “last price” with both metals falling below whole number support at 12:50 p.m. EST.
END OF UPDATE
We have been talking about the currency crisis and currency wars that have been gripping various parts of the world.
Namely the South American countries of Argentina and Venezuela have seen their share of currency turmoil.
Well now, we’re not just isolated to South America as the currency crisis spreads.
First, not necessarily “crisis”, but devaluation, is the Chinese yuan.
The overwhelming belief is that the Chinese are devaluing the yuan as a weapon in the trade war:
There has also been plenty of talk about the yuan peg to gold, as in gold in dollars is moving with the dollar price of the yuan, tick for tick.
The yuan is taking a backseat, at least for now, however.
That is because Turkey is the latest nation to see its currency in utter crisis.
The move is rather parabolic:
That’s nearly 200 points in the move since last Thursday to Monday morning, from 5.27 to 7.12.
Said differently, on the ‘official’ exchange rate, where just two days ago it took 5.27 Turkish lira to buy one US dollar, at its peak in overnight trading it took 7.12 Turkish lira to buy one US dollar,
To bring the point home, we can say it two different ways as well –
- The dollar just became 35% more expensive to buy in Turkish lira
- The Turkish lira has lost 35% of ifs purchasing power in dollars.
That is a huge move, considering that is just over the last two-and-a-half days.
It’s really much worse than that, however, if we look in terms of purchasing power over the last year.
The low print from September of last year was 3.38, and taking the high print of 7.12 overnight, we’re talking about a move of 110%.
The crashing of the Turkish lira is, in part, causing a flight to the US dollar.
We can see that clearly in yet another surge of the dollar:
Notice the erratic move overnight on the last candle of the chart?
Here’s what it looked like as we break it down to the 1-minute timeframe:
It will be interesting to see if there is any kind of comments from President Trump about the dollar.
Remember, the dollar index was about 135 points lower when President Trump not only expressed his concern for the strong dollar, but doubled-down on that expression the very next day.
And remember, he specifically named Europe in one of those Tweets:
China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field…
— Donald J. Trump (@realDonaldTrump) 20 July 2018