Silver Futures Index $SILVER (SILVER)

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Silver Catch Up
By: Marty Armstrong | September 5, 2019

Cyclically, the precious metals were due for a rally into September and the spin everyone is putting on this is just amazing that the driving force has been the focus on the economic woes with 10-year U.S. Treasury yields slumping to a three-year low implying a recession ahead. Clearly, the driving macro force has been the explanation of a decline in global yields, which seems to be spreading. There is concern rising over possible sovereign bonds. This is the real concern which will take front stage in 2020-2022.

U.S. Treasury yields fell as the benchmark 10-year yield hit its lowest since July 2016, after U.S. manufacturing data showed the first contraction since 2016 on worries about a weakening global economy and U.S.-China trade tensions which are being spun into a negative campaign for 2020 against Trump. World leaders will continue to blame Trump's trade war for the economic decline into 2020. However, the ECM has been pointing down for the business cycle into January 2020 all along.

Nevertheless, the major resistance in Silver remains at the 2030 level and only exceeding that area would be impressive. Otherwise, what goes up fast, also comes down fast and this may yet prove to be the case after the Benchmark targets are hit.

All you need to do is look at the DAX in Euro and dollars. It is very clear we are looking at a dollar near-term move on the horizon. Keep in mind that eventually, the dollar rallies in an economic decline for that is the very core of deflation.  It is easy to see that the DAX keeps testing the highs in terms of dollars whereby in euros, the Dax appears to have created an isolated high. Thi8s is showing the stark currency difference as we head into 2020.

This confirms that the DAX will make new highs in dollars meaning that the dollar will rise further. That will not be good for the metals initially.

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