Texas Precious Metals

  • Gold and Silver Coiling for a Move

    It has been over a month since my last entry on the markets, and aside from a few Twitter posts, most of my analysis has been confined to my desktop. The impact of the coronavirus on the retail precious metals market has been historic, with dueling supply and demand shocks, and as president of Texas Precious Metals, my time has been consumed by day-to-day operations. I finally have a bit of a respite this afternoon to share a few thoughts on the metals markets.

    GOLD

    Back in November, I identified a 5-wave pattern setting up with two bull wedges that created a series of highly favorable long setups (see chart above). The big sell-off with the COVID debacle was concerning, but as we can see from the chart, horizontal support held and the bounce higher was strong and swift. It is possible (as some suggest) that Wave 5 is now completed, but I continue to think gold is pushing for all-time-highs based on price action and consolidation.
    Also encouraging is the fact that gold is sitting right at the anchored VWAP (volume weighted average price) from the March 31st lows. (I used TrendSpider for this chart.)

    GOLD-DAILY

    Zooming out to the monthly chart, the big selloff in March produced a long-legged doji that retraced the move to the 50% Fib retracement level (1450). Since that time, gold has rallied higher and seems to be pushing for a test of all time highs of $1910 (monthly close of $1830).

    GOLD-MONTHLY

    SILVER

    Silver is also coiling for a move, sitting at both horizontal support and rising channel support. From a risk/reward standpoint, a long entry here with a stop below 14.60 is favorable. The upside should target ~18.80.

    SILVER-4hr-CHart

    S&P500

    Lastly, just a quick comment on the S&P 500. The bearish case is that we have witnessed the beginning of 5 waves down, with wave 1 culminating in March and an A-B-C correction into April and early May. There is a head and shoulders top just below the 61.8% fibonacci retracement and a break of rising channel support would target 2620. The bulls would gain the upper hand if channel support holds and we break above 2940-2950 to the upside. A big rally to 3300 would likely ensue.

    As always, we look forward to your feedback. Be safe out there!

  • COVID-19 risks shut down U.S. Mint gold silver bullion production at West Point

    (Kitco News) By Neils Christensen - The physical gold market has been dealing with significant supply issues and the crunch is going to get bigger as the U.S. Mint announced that it is shutting down gold and silver bullion production at its West Point Facility.

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  • Gold Dealers Report Big Shortages of Small Bars and Coins

    By Elena Mazneva on Bloomberg.com

    When people are worried about the future they turn to gold to protect their savings. That’s rarely been more true than today.
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  • Historic Bounce in Gold at Key Fibonacci Level
    • Posted on March 25, 2020
    • By TPM
    • General

    Given the extreme recent demand in the precious metals markets, this is the first opportunity I have had to reflect on the charts. For those interested in my thoughts on rising premiums and the cause for falling spot metal prices in early March, please refer to the articles linked.
    I want to review price action in gold. Below is the long term, 40-year semi-log chart of gold weekly futures. I have drawn my fibonacci levels from the secondary high in 1980 ($720) to the bottom in 2001 ($250). The story is as follows:

    • Following a 20-year bear market, gold began its bull market after 9/11, with price finally retesting the secondary high at $720 before a pullback to the 61.8% Fibonacci retracement.
    • Support held there, and a second leg to a new all-time high at $1030 (161.8% extension) commenced before a retest of the $720 level at the 2008 bottom of the Great Financial Crisis (formerly resistance, now support).
    • The subsequent bull move took gold to new all-time highs at $1910, stopping perfectly at the 361.8% fibonacci extension.
    • The ensuing bear market backtested all the way to the prior peak at $1030 (161.8 extension) before finally breaking above the 261.8 extension in August of 2019.
    • Since August, gold has peaked at $1700, and the recent liquidity driven sell-off has simply backtested the breakout at $1450 (261.8 extension), where we have seen a powerful and historic rally this week of over $250 in two days.

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  • Canadian Mint Shut Down! End of Week Update
    • Posted on March 20, 2020
    • By TPM
    • General

    Dear customers,

    I would like to offer you one final update for the week.

    Before I begin, my team has requested that I send a big ’Thank You’ to all of you who have called in this past week. In the midst of a very challenging week, with slower-than-usual response times, changes to billing and shipping methods, out-of-stock inventory, and other inconveniences - in what is admittedly a stressful time for many people - nearly every customer has been gracious, patient, accommodating, and diligent in providing information. We appreciate y'all. Personally, I want to especially recognize our accounting manager, Kris Hauptman, who has been working day and night (sometimes until 4am) taking personal responsibility for processing all of your payments. Thank you Kris!

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  • Why is the price falling?
    • Posted on March 18, 2020
    • By TPM
    • General

    In response to my update yesterday - Demand Shock: The Forces Behind Rising Premiums - many of you sought to know an answer to the question: why are prices falling if demand is so unprecedented? I will seek to explain below. To clarify, yesterday I wrote about premiums; today I am writing about “spot price.”

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  • Demand Shock: The Forces Behind Rising Premiums
    • Posted on March 17, 2020
    • By TPM
    • General

    An Explanation of Rising Premiums

    Most of you are now aware that the inventory of most precious metals dealers has evaporated. Premiums on common products have skyrocketed. I am writing this to offer some insights into these price changes so that you can make informed decisions. I will use the US Mint as the proxy for all mints.

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  • AN  UPDATE  REGARDING  ORDER  PLACEMENT

    Dear TPM clients,

    The market dynamics are changing rapidly, and the physical inventory situation industry-wide has worsened considerably since my message yesterday. I want to remind each of you that we will only sell products that we have in stock. We will not forward sell demand and ship after long delays. The future supply chain is uncertain at this point and we can only guarantee what we have in stock. Therefore, I need to apprise you of two important announcements.

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  • Limit Orders Temporarily Suspended

    Dear TPM Clients,

    A long running policy of Texas Precious Metals has been "If we don't have it, we don't sell it." Over the last few days the supply of most common items has greatly decreased, and we are only selling what we have in stock. We will not forward sell.

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  • Important Update

    Dear TPM Clients,

    As you all know, the effects of coronavirus (COVID-19) have accelerated what is now a precipitous decline in equities. Access to liquidity in the markets has become an issue, and all asset classes are being affected - including precious metals. This historic turn of events has created a demand shock in the physical precious metals industry. Following years of slow to moderate sales following the Greek crisis in 2015, the entire industry has been cautious to build large inventories. This includes the United States Mint, which experienced a terrible production decline of Silver American Eagles, down to only 14.9M ounces minted in 2019.

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