Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG)

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#JNUG: Gold & Silver Absorb The Sell Orders And Rise In Price After The First Quarter GDP Release...!



https://www.silverdoctors.com/gold/gold-news/gold-silver-absorb-the-sell-orders-and-rise-in-price-after-the-gdp-release/



GDP comes in at 2.3%, but no matter the number, it’s all good for gold & silver, and the metals are responding accordingly. Here’s why…

Recall that today is one of those days when the cartel enjoys smashing the metals more than others.

Why?

GDP – the measure of how the nation’s economic activity is growing (or contracting).

GDP comes out once a quarter, and just like when we get the BLS Jobs Report once a month, and we get the FOMC meeting, GDP is one of those times where the cartel just can’t resist a good smashing.

Prior to the release of the GDP, the consensus estimate for Q1 GDP was 2.0%:






The Bureau of Economic Atrocities Analysis (BEA) has just released its first estimate for first quarter GDP.

According to the BEA, the United States grew at an annual rate of 2.3% in Q1 of 2018:

Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the first quarter of 2018
(table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the
fourth quarter, real GDP increased 2.9 percent.

The Bureau emphasized that the first-quarter advance estimate released today is based on source data
that are incomplete or subject to further revision by the source agency (see “Source Data for the
Advance Estimate” on page 2). The “second” estimate for the first quarter, based on more complete
data, will be released on May 30, 2018.



Here’s Bloombereg’s spin of Q1 GDP:

The 2.3 percent pace of GDP growth is still faster than what the Federal Reserve sees as the economy’s long-term potential rate, and officials have previously said they view the first-quarter slowdown as transitory, with the economy poised to reach a milestone in May — the second-longest expansion on record. Investors expect the central bank to raise interest rates in June for the second time this year.



*****

Economists say statistical quirks, or so-called residual seasonality, have been behind some of the disappointing first- quarter GDP results in recent years. In five of the past eight years, the first quarter turned out to be the worst one of the year. The Commerce Department’s Bureau of Economic Analysis is revamping its methodology to try to address the issue.

Beyond quarterly gyrations, underlying demand looks resilient, analysts said before the report. Retail sales rose more than expected in March and automobile purchases improved. Data released Thursday showed a better picture for the trade deficit toward the end of the first quarter but a weaker handoff for investment.

Meanwhile, changes in U.S. trade and tariff policies are posing a risk to the outlook. The economy may expand 2.8 percent in 2018, according to the median of forecasts compiled by Bloomberg, before slowing in the following two years.

Zero Hedge is even embracing the Q1 GDP print and taking the government’s statistics at face value:

Q1 GDP was expected to be a big slowdown from the Q4 2017 GDP of 2.9%, mostly as a result of slowing consumption, and that’s precisely what happened when moments ago the BEA reported that in the first quarter, GDP rose at a 2.3% annualized rate, which while the lowest in the past year, was better than the 2.0% consensus estimate.

The increase in real GDP reflected increases in business investment, consumer spending, exports, and inventory investment. Imports, which subtract from GDP, increased in the first quarter of 2018.

Overall, this was a solid report, certainly better than expected, and with core PCE rising at 2.5%, it provides the Fed with even more reasons to hike rates in coming meetings.

As per customary, gold & silver were hit at exactly 8:30 a.m. EST:







Silver’s trading volume was already very light, and we are still in the pre-market action, so it was easy to fire off some sell orders in that minute to get momentum going.

And get the knee-jerk momentum going they did:









But remember, what happens in the first several minutes to half an hour after any data dump can be considered the knee-jerk.

Now that the GDP news is sinking in, which means, hey, “everything’s cool as a cucumber right now”, gold and silver are gaining after the initial knee-jerk:








Which they should.

Rising rates are good for gold & silver, and the CME Group is calculating a greater than 93% probability the Fed will hike in June.

Recall that gold & silver bottomed in December 2015 just as the Fed ended their zero interest rate policy (ZIRP), and the metals have risen ever since.

We’ll see how the day unfolds, but so far, gold and silver are shrugging off the data because as inflation picks up and as the Fed raises rates, gold and silver step into their roles as inflation hedges.

Even if the print would have come in terrible, and 2.3% is nothing to right home about anyway, but let’s say it came in terrible, like with a 1-handle or or even sub-1.

Well, gold & silver would still thrive.

Why?

It would put in doubt the bullishness of the Fed and the number of rate hikes expected this year.

That would be good for gold and silver because a dovish fed is an easy money policy Fed (which we still have a very easy money policy by the way).

And all that money printing and easy monetary conditions will be bad for the dollar.

Still in pre-market but we can see gold & silver are clearly higher than the going into the release:









And the dollar is starting to come down. Is the short-term top in for the dollar? We’ll see, but if it is, that means the short-term bottom is in for gold & silver too.

Bottom line: With gold & silver held in check for so long, for the last seven years, and especially over the last year, there’s a price floor, at a rising cost of production, and that means there’s really only one way for the metals to go from here, and that’s up in price.

Stack accordingly…

– Half Dollar