Sorry crypto: Surprising nobody, silver back up +5%; All Ords XGD index surges 70pts

The good thing about all this is the markets are still predictable. Take a deep breath and a sigh of relief: Certainty still reigns. For now. As I wrote yesterday, it looks like Monday’s slaughterhouse session for silver and gold was short-lived. (That’s bad news for crypto, which was flat on Tuesday, and will likely remain so long as gold and silver keep acting like crypto assets, which I also wrote yesterday.)

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So what’s going on? Well, after silver ETFs became more popular than NVIDIA and S&P500 index funds last week, which then led into panic over the weekend when we saw the worst drop silver’s ever seen on historical record. That was after running stupid hard for some months; something had to give.

In the background, Trump’s call to install Kevin Warsh as the next Fed Chair also calmed markets, given he’s perceived as less likely to be a MAGA crazy, which has left some investors selling off gold and going back to U.S. investments.

Silver got caught up in the downturn in gold, just like it got caught on the way up.

That’s what’s going on. Naturally, now that gold is heading back up – that’s more because it’s cheap, I’d say – silver’s rising again.

Fun fact: The appetite for gold being displayed on Tuesday is more-than-significant and indicates to me the gold miner trade hasn’t gone anywhere.

If you need some data there, take a look at the XGD: It’s well ahead of every other counterpart, up 750pts at lunchtime on February 3.

Herein lies the big question: Is it just a dead cat bounce? (Read: Is this a short-lived recovery?) Or, is this the start of a second wave?

That remains anybody’s best guess, though, general chart watchers are generally bullish silver’s not done for yet. The question is really more of liquidity than it is of tea leaves, though – and for now, silver’s still hot.

Plus, the weekend’s decline probably just created a group of bagholders equivalent to the population of a small European country, who will now be holding on.

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