Gold and Silver get slammed

• POTUS names his Fed Chief.
• The markets see no more rate cuts.

Good Day... And a Marvelous Monday to you! And Welcome to February... It's also Groundhog Day (one of my fave movies too!) Well Armageddon ruled the metals the last two days of last week... By now I'm sure you've heard that Gold lost a total on the two days of $524 to end the week at $4,571... Silver was not spared as it lost $31.40 to end the week at $85.40... I hope you had a wonderful weekend that ended with the alarm clock going off this morning... I would imagine that many a short timer in the metals, panicked and sold on Friday into the weakness...  I guess they never heard of the trading mantra of: Buy into weakness and sell into strength... Earth, Wind & Fire greet me this morning with their (make you wanna dance) song: September.

What caused this major sell off of the metals? Well, POTUS named his choice for Fed Chairman on Friday and the markets freaked out... Keven Warsh is the name of the fellow picked to be the next chairman when either Jerome Powell steps down, or his term ends in May... So, there's all kinds of stuff going on here with this Kevin Warsh... His history tells us that he's a Hawk, and would tend to vote hawkish when he was a Fed member a few years ago... At first glance, I thought and the markets thought that Warsh was chosen because he would toe the line with POTUS and work to get interest rates down near to zero again.

But then someone pulled out Warsh's history of voting, showing that he was a HAWK, and then all hell broke loose in the dollar, and metals.

It was also the options maturity data on Friday that didn't help things, and brought the SPTs into the markets under the cover of the expiration data.

You know that everyone was talking about a pull back of the metals and then they would form a new base and return to rallying each day again... So, this didn't surprise me, the severity of it did, but not the pull back... Gold reached $5600 on Thursday morning before the SPTs went to work and it finished $215 away from its high... at $5,379... And Silver was also sold short on Thursday and finished $6.04 away from its high at $116... at $115.46 This was to be expected given the lofty levels that Gold & Silver had reached and was reaching higher on Thursday morning.

But Friday was like I said, "Armageddon"... Monday's price action will give us some indication of which way these two will go... Will there be more short timers panicking and selling? Or will they realize that they are selling into weakness and stop? 

The short timers, and the SPTs really did a number on the metals on Friday... But why? Well, like I said above the Kevin Warsh announcement was the straw that broke the camel's back... The short timers were not any help, as one sale begot another sale and so on... I say, well, if that's what it takes to get all those that bought Gold & Silver for the wrong reason to be gone, then so be it! 

In the overnight markets last night... well, as soon as the markets opened overseas last night, Gold & Silver continued to get sold, so apparently all the short timers got the memo too late on Friday, to execute their sales... I really thought that China would step in overnight and say, "We've Got this" and buy boat loads of the metals... Maybe that's still coming, but it isn't here yet. The dollar is flat this morning as the foreigners saw the gain in the dollar last Friday, and didn't want any part of raising it more.

The price of oil remains trading with a $62 handle overnight, and the 10-year Treasury is at 4.24% to start our day and week today. 

The short timers were one side of the selling... the other was the SPTs... These dastardly dudes were out in force, as Ed Steer said in his Saturday letter, "The Empire Strikes Back!".

Here's something else that Ed had to say: "BlackRock issued a warning five or so years ago to all those short SLV that there might come a time when there wouldn't be enough metal for them to cover. That would only be true if JPMorgan decides not to supply it to whatever entity requires it. However, we appear to be far beyond that point now, as the short position in SLV will never be covered through the deposit of physical silver, as it just doesn't exit -- and never will. 

The STPs were getting hit with some monstrous margin calls, and they had to do something to keep from paying these margin calls, so the performed an engineered take down in Gold & Silver, and covered their shorts that were leaking blood... This was a planned takedown folks.. They are still there despite all the comments about how their power had been reduced, their demise had been greatly exaggerated.

And the Dollar? It rallied like there was no tomorrow on the Kevin Warsh announcement... The dollar bugs saw the word "Hawk" and they genuflected.... The BBDXY ended the week at 1,1888, up 10 index points on Friday... So, one guy did all this damage in just having his name bandied about... I shake my head in disbelief... Keep your currencies and metals diversification, and batten down the hatches for now, this storm will pass, I'm sure of that, there are just too many things wrong with the dollar and the U.S. position on things that I see this all turning around soon.. I just hope I'm right! 

I mean, regardless of price, what has actually changed in the global economy to reverse Gold’s long-term trend? Nothing, absolutely nothing, say it again! (Edwin Starr) Yes, there's been some irrational exuberance especially with Silver, which had gained 60% in just 3 weeks, but this short covering was also too much in my opinion... So, load up on cheaper priced Gold & Silver would be my thinking at this point.... I'm just saying.

I came across this in Ed Steer's letter that can be found here: www.edsteergoldsilver.co And to me this is very interesting because of the FWIW article I gave you a week or so ago from Doug Casey spelling out the risks of owning metals in an ETF, of paper Gold & Silver... here's Ed... "One other thing that's gold and silver related that I harp on in every Saturday column -- and is getting more conspicuous as the months go by, is the lack of deposits into all the world's gold and silver ETFs. In the last four weeks, there have only been 2,608 million troy ounces of gold added -- and in silver a very counterintuitive 54.080 million troy ounces have been withdrawn.

And this is happening with both gold and silver at record highs in what should be a raging bull market in everything precious metals-related.

Compared to where they were in the last bull market, the amount of gold in these depositories should be at least 2x what it is now -- and in silver...around 3x. Why this dichotomy exists, is one of the great unexplained mysteries of our time."

Chuck again... The Trusts for these ETFs are failing miserably at making certain that they have the physical metal to match their ETF holdings... What would happen if everyone that owned an ETF decided to take delivery of their metals? 

The U.S. Data Cupboard last week had a PPI Day on Friday, and PPI (Wholesale inflation) showed that PPI rose .5 in Dec., and 3.0% YTD... That is the largest monthly move in PPI since, well for a long time... And gives us a look at what our inflation could be in the future... I read somewhere that inflation could be over 6% in the STUPID CPI (we all know that this is held down) later this year... If the STUPID CPI is over 6% then real inflation will be in the double digits..., Try to put some food on the table with that kind of inflation! 

And in other news... The POTUS named his new Fed Chairman of choice, and it is Keven Warsh... So, let's see, inflation is going to go higher and now we'll have a Fed Chairman that will push for much lower interest rates... See where I'm going with this? I think you do, but if you don't, think about how our economy will have much lower interest rates, exploding money supply, and inflation taking a hunk of flesh from our wallets.... This is NOT the way you go about dealing with your problems... But then, I'm just preaching to the choir, right? But, at first glance, he (Kevin Warsh) is a wolf in sheep's skin... He's going to side with the POTUS who wants lower rates and that's that, no matter how he voted in his previous stint as a Fed Head.

To recap... The dollar rallied like there's no tomorrow and Gold & Silver saw selling on two fronts (The SPTs and the short timers) and at the end of the day/ week, we were looking at vastly differently levels for these assets... All the talk was about how the POTUS named his successor to Fed Chairman Powell, in Kevin Warsh, who used to be a Fed Gov. And always had a "hawkish" vote in those days... The markets thought back and said, "he's a HAWK!" and the Fed Rate cuts went out the window in the eyes of the dollar bugs... The dollar gained 10 index points on Friday, and Gold & Silver were sold down the river all day and again last night.

Here's your very long snippet: "Gold did not creep higher. It kicked the door in.

After blowing through $ 5,500 in early Asia, bullion is no longer trading like a commodity. It is trading like a referendum. Not on inflation. Not on rates. On trust.

Gold is not yet pressing north of $ 6,000. What is pressing higher is the narrative ceiling. When prices clear $5500 this decisively, the next leg is no longer spot-driven but expectation-driven. This is the phase in which forecasts begin to chase price rather than guide it. You should expect a flurry of revised calls above $6000 and even $6500 as desks are forced to admit they under-modelled a trade that refused to wait for permission.

This move is not about growth, CPI prints, or whether the Fed trims or holds. Gold is responding to something more structural and more uncomfortable. The slow realization that the anchors of the system are lighter than advertised.

Gold is the inverse of confidence. When belief in policy coherence weakens, gold ceases to behave like a hedge and instead acts as an alternative. That is what we are watching now.

This is not a fear of recession. There is doubt about fiat stewardship.

The rally has been two years in the making, and prices have more than doubled over that period. But what has changed recently is not the story. It is the participation. This is no longer a central bank-only trade. The private sector has arrived, and it is not renting exposure. It is buying with intent.

Family offices are not trading gold. They are warehousing it. This is not a quarterly allocation tweak. It is balance sheet thinking. When gold becomes a generational insurance asset rather than a tactical hedge, price targets stop acting like ceilings and start behaving like mile markers.

The debasement trade is no longer whispered in macro circles. It has become visible in flows. Investors are not running toward risk. They are stepping away from promises."

Chuck again... this article is very long and very good so if you have the time, please click on the link above and read it... Then you'll have a whole different outlook on Gold and its future of which, Jim Rickards says it will reach $10,000... I have my fears of that, because... What will our financial future look like with Gold at $10,000? Something to think about, for sure! And points put my earlier comment about how nothing has changed.

Market Prices 2/2/2026: American Style: A$ .6953, kiwi .6013, C$ .7331, euro 1.1855, sterling 1.3692, Swiss 1.2884, European Style: rand 16.02, krone 9.6714, SEK 8.9252, forint 321.46, zloty 3.8587, koruna 20.4975, RUB 76.68, yen 154.96, sing 1.2798, HKD 7.8102, INR 91.51, China 6.9436, peso 17.36, BRL 5.2548, BBDXY 1,188, Dollar Index 97.50, Oil $62.11, 10-year 4.24%, Silver $83.58, Platinum $ 2, 135.00, Palladium $1,760.00. Copper $5.88, and Gold... $4,778.

That's it for today... I need to get this out front and center early so there are no misunderstandings... I will be going on my traditional Spring Vacation 2/26/2026 to 3/5/2026... There won't' be a Pfennig those days while I'm on vacation. I love traditions, as you all know, and I'm a stickler for Traditions... So, I keep to all my times away religiously.... There also won't be a Pfennig on Feb 18 and 19... As I travel back home to receive an infusion.... So, have you got all that? Good! Fingers crossed that the arctic weather they are now receiving at home has been abated by 2/18! On Friday, 2/20 I will go to see my darling granddaughter, Delaney Grace perform as the lead in the play Mama Mia! She will be the star that I always knew she would be...My beloved Mizzou Tigers won on Saturday, and the Stl U. Billikens won on Friday night... Poco takes us the finish line today with their song: You Better Think Twice... I hope you have a Marvelous Monday today, and Please Be Good To Yourself!