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Summary

  • President Vladimir Putin gains world credibility.
  • Washington continues to play tough against China and Russia.
  • Political tensions build worldwide, and gold's reaction is bullish.

In a recent interview, Dr. Paul Craig Roberts, former assistant secretary of the US Treasury, columnist and author, discussed his respect for Russian President Vladimir Putin and the arrogance of Washington's attempts to bully the rest of the world, which is driving China and Russia into a closer relationship.

"He [Putin] impresses me most," Roberts said. "[Putin is] undoubtedly the most accomplished and respected world leader at the present time. The Chinese are also good…Most of the rest of the world you can just flush. There aren't any leaders."

Roberts drew a distinction between Putin, who Roberts said relies on diplomacy, not coercion, and the United States, which routinely threatens others if they do not do just what Washington wants.

"He's not threatening people," Roberts said of Putin. "He's simply telling people, 'I'm here for you. We can work this out."

"Roberts said that President Obama and the US State Department says, "Do what we say or we'll bomb you back to the stone age."

The United States not only threatens Russia, but also the Europeans. Washington tells the Europeans to impose sanctions against Russia over Crimea and Ukraine, regardless of how it hurts the Europeans' economies. The US is used to being a bully, and people are tired of it... The fact that he [Putin] is not threatening and not relying on force and coercion is the reason why he's winning.

Even though Russia has 8,500 nuclear warheads, almost as many as the rest of the world combined, there are people in Washington writing about what a massive superiority the United States has over Russia in nuclear arms. Some analysts are arguing that if the United States conducted a first strike, Russia would not be able to retaliate.

However, Roberts argued that even if just half of the US and Russian nuclear arsenals were used, it would be "end of life on earth, period." He said, "These weapons are not usable. Their purpose was to prevent their use."

During the Cold War, with Mutual Assured Destruction (MAD), the US and the Russians were committed to using nuclear arms only to retaliate, but in 2010, US doctrine changed. The United States decided that they could use nuclear arms in a preemptive nuclear strike. Washington claims, Roberts said, the change is aimed at terrorists, but how do you target terrorists with nuclear missiles? Roberts also said that US anti-ballistic missile (ABM) systems around Russia are clearly aimed at Russia, even though the US says they are for Iran. Iran, however, has no intercontinental ballistic missiles (ICBMs).

The Chinese are also worried about US war plans against China. The Chinese recently released a report, Roberts said, outlining how Chinese submarines off the West Coast and ICBMs coming over the North Pole could wipe out the entire United States. Roberts claimed that the "Chinese don't threaten people," so why would they release such a report? He said they are "trying to make the American people aware that the American government has plans for attacking China, and there will be a cost if that happens." Roberts fears that if the US raises the specter that Washington might preemptively attack China and Russia, they might conclude that they may as well attack first. Roberts argued that such thinking about the winnable nature of a nuclear war shows the "arrogance, [and] hubris that defines the United States."

US bullying, Roberts said, has "pushed Russia and China into a strategic military partnership," which is also economic and political. The two powers recently made an energy deal that is outside the dollar payment system. Moscow and Beijing are tired of threats about US sanctions, but "the only way you can be sanctioned is if you are in the American dollar payment system." He said, "Russia and China are not Syria and Libya." They cannot be bullied, so they are simply departing from the US system, which makes US sanctions far less effective and weakens US hegemony.

Gold and Silver Past, Present and Future Swings

Echoing my comments recently:

"The weekly downtrend signals gold could drop to the .786 Fibonacci retracement at $1231 into the final June time frame, a completion of this second corrective wave usually takes place at these levels and it could unfold anytime."

As geopolitical tensions accelerate in the Middle East, the price of silver closed up 4%, with gold gaining 2% for the week. Many bearish gold market analysts are throwing in the towel as silver broke above the $19.44 weekly resistance levels and 50-day MA. The price quickly accelerated and reached a high of $19.72 by Friday's trading session, closing the week at $19.66. The gold market reached a high of $1278 on Friday, and closed at a weekly high of $1276.60.

The gold market rejected the low of $1250 that coincided with the 9-day MA, and found good buying support on high volume. A very good indication that we have some new players back on the long side for silver and gold, increasing the probability that the $19 levels for silver and $1240 for gold are fundamentally supported by technical and fundamental reasons.

The weekly resistance comes in at $1287-$1296 for gold and $19.93-$20.20 for silver. These are excellent levels to take some profit off the table or put on some short-term hedges. Be prepared to cover these short hedges at the $19.18-$18.70 level for silver and $1259-$1240 for gold, as these levels are ideal to add to the long-term strategies, as recommended at the Equity Management Academy.

Gold, Silver and Crude Oil Derivatives Technical Perspective

For a more detailed technical picture in gold, silver, mining shares and crude oil derivatives, let's take a look at the weekly charts and see what trading/investing opportunities we can identify for next week.

GLD

The contract closed at 122.96. The market closing above the 9-day MA (121.12) is confirmation that the trend momentum is bullish. A close below the 9-day MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 122.19, it confirms that the price momentum is bullish. A close below the VC Weekly would negate the bullish signal to neutral.

Cover short on corrections at 121.34-119.72, and reverse to go long on a weekly reversal stop. If long, use the 119.72 as a Stop Close Only and Good-Till-Cancelled order. Look to take some profits on longs as we reach the 123.81-124.66 levels during the week.

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GDX

The contract closed at 24.11. The market closing above the 9-day MA (23.56) is confirmation that the trend momentum is bullish. A close below the 9-day MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 23.59, it confirms that the price momentum is bullish. A close below the VC Weekly would negate the bullish signal to neutral.

Cover short on corrections at 23.05-22, and reverse to go long on a weekly reversal stop. If long, use the 22 level as a Stop Close Only and Good-Till-Cancelled order. Look to take some profits on longs as we reach the 24.64-25.18 levels during the week.

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SLV

The contract closed at 18.92. The market closing above the 9-day MA (18.61) is confirmation that the trend momentum is bullish. A close below the 9-day MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 18.73, it confirms that the price momentum is bullish. A close below the VC Weekly would negate the bullish signal to neutral.

Cover short on corrections at 18.50-18.08, and reverse to go long on a weekly reversal stop. If long, use the 18.08 level as a Stop Close Only and Good-Till-Cancelled order. Look to take some profits on longs as we reach the 19.14 - 19.36 levels during the week.

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UCO

The contract closed at 39.39. The market closing above the 9-day MA (36.18) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 38.76, it confirms that the price momentum is bullish. A close below the VC Weekly Indicator would negate the bullish trend to neutral.

Cover short on corrections at the 37.77-36.15, and reverse to go long on a weekly reversal stop. If long, use the 36.15 level as a Stop Close Only and Good-Till-Cancelled order. Look to take some profits on longs as we reach the 40.38-41.37 levels during the week.

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The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any futures or options contracts.

TRADING DERIVATIVES, FINANCIAL INSTRUMENTS AND PRECIOUS METALS INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Source: American Threats Are Driving China And Russia Closer Together