Exploding upward days becoming the norm

Good Day... And a Tub Thumpin' Thursday to one and all! Well, I shouldn't have said anything about trading in the metals yesterday morning was back to normal, because... The rest of the day was NOT normal! As Gold gained $244 and Silver gained $4.47... Simply crazy, but to me it shows what the metals would have been doing when the SPTs controlled the asset class... Not the way I usually start the letter today, but yesterday was so crazy that I had to lead off like this... The Moody Blues greet me this morning with their song: Driftwood.

Well, as I said yesterday when reporting that the dollar selling had stopped, that the PPT and their treasure trove of money, was buying the dollar to prop it up and save it... This went on all day yesterday, and in the end the BBDXY gained 5 index points... So, the drop in the dollar will have to endure days like yesterday, when the PPT comes in to save it... But, just like the SPTs and the metals this gives you a chance to buy more currency when you diversify your investment portfolio.

Yes, that's how I've always looked at dollar rallies as long as I've been around currencies, which is since 1992...  And writing the Pfennig since 1993... or some form of it.

So, the dollar gained ground yesterday, and so did Gold & Silver... So, apparently, the metals don't need for the dollar to weaken for them to gain, and that should have been the whole theme of the metals rally that's been going on. But, the metals gaining is a sign that the dollar is getting weaker... I'm just saying.

The price of Oil bumped higher to a $63 handle yesterday... This from Oilprice.com : "Oil Prices Continue to Rise As US Crude Oil Inventories Drop" The cold weather in the U.S. isn't helping any either... The 10-year remained at 4.25% yesterday, with no interference from the Fed Heads.

Speaking about the Fed Heads... The FOMC decided to keep rates unchanged at their culmination of their 2-day meeting. In the press conference following the meeting chairman Powell said that "We still see inflation as “somewhat elevated,” but said the job market is showing “some signs of stabilization” and removed language that “downside risks to employment rose in recent months.”

Well, this was the first time the Fed Heads even mentioned that inflation wasn't going away... It's a start.... But apparently, they hadn't seen the headlines on layoffs... UPS says they will cut 30,000 jobs, and Amazon said they would cut 16,000 jobs.. And those are just two that have announced job cuts.

And inflation? Long ago I found a website that calculated inflation the correct way without hedonic adjustment and then forgot about it until... a dear reader told me about it. Then I went to my web browser and searched the history of sites I had saved... and there it was www.chapwoodindex.com And they show inflation to have been: The Index shows that the average inflation over the last 5 years is between 8.1% and 12.9% in the top 10 cities.

I've said all along that rates should not have been cut, until inflation is below 2%... And even then 2% inflation each year will do major damage on your wallet... I'm just saying.

In the overnight markets last night... Well, the dollar drifted a bit higher, but Gold and Silver are back to pushing the envelope across the desk... Gold is up $118 and Silver is up $2.85 to start our day today... More explosive moves from these two are becoming the norm.

The price of Oil bumped higher again last night and trades this morning with a $64 handle... I'm really impressed with Oil's resurgence... And the yield on the 10-year Treasury bond is 4.25% to start our day today... No interference here bond boys, so if you want to take the yield higher, you have a green light... i'm just saying.

I had a nice chat with good friend, and former Big Boss, Frank Trotter yesterday... I really need to get him to agree to write sometimes... he's such a great mind, and writer... Please?  

Ok, with inflation on the rise, and the dollar hanging by fingertips, the commodities are staging a comeback... The price of Oil is up $5 since the start of the new year, Gold is up 23% since the start of the new year... And I told you last week that this will be the year for commodities... Well, if commodities are hip, then the Commodity currencies will be too,,, Countries like Australia, New Zealand, Canada, Norway, etc. will be bought because if Commodities are getting bought, then these countries will see renewed inflation in their respective economies, and require rate hikes...

And I'll mention something that I first brought to your attention, probably 10 years ago... And that is the relationship of the Singapore dollar and the Chinese renminbi... I don't know if you've noticed in the currency roundup or not, but the Sing dollar has really rallied lately, and so has the Chinese renminbi...

You see Singapore has to mimic the moves of the renminbi because they are in competition for exports of pharmaceuticals and other things... So, if the renminbi gains so will the Sing dollar.

The Aussie dollar (A$) is already seeing inflation rising, and I saw this "The A$ appreciated after hotter-than-expected Australian inflation data, released on Wednesday, lifted the odds of a Reserve Bank of Australia (RBA) rate hike as early as next week. And the A$ has climbed above the 70-cent level already!

This was from the FXSTREET.com... They are always good about posting my Pfennig, so as much as I can I'll be highlighting them!

And the dollar? Did you hear that the POTUS said that the dollar is still a "safe haven"? This from Dave Gonigam's 5 Bullets yesterday, "Asked yesterday in Iowa whether he was worried about the dollar’s recent drop relative to other major currencies, he said, “No, I think it’s great.

“I mean, the value of the dollar, look at the business we are doing. No, the dollar is — the dollar is doing great.”

And just like that, what had already been a precipitous slide in the U.S. dollar Index since mid-January turned into a rout." 

Chuck again, I mean C'mon POTUS get real! Apparently, he hadn't heard about the story I told you about yesterday, where the IMF is making plans for a long selloff of the dollar... ''

And another preposterous statement by one of our leaders... from Kitco.com: " The entire world has been captivated by gold’s and silver’s surging momentum as prices hit record high after record high; however, the Federal Reserve Chair is not very impressed with the precious metals’ accomplishments.

Many analysts have attributed gold’s and silver’s unprecedented start to the new year, in part, to growing uncertainty surrounding the Federal Reserve’s political independence; however, during his monetary policy press conference, Powell dismissed those concerns.

“The argument can be made that we are losing credibility, but that simply is not the case. If you look at where inflation expectations are, our credibility is right where it needs to be,” he said. “We don't get spun up over particular asset change prices, although we do monitor them, of course.”

Chuck again... no loss of credibility? I shake my head in disbelief that he would say that... And he's not impressed with Gold's run? There's loss of credibility right there!

The U.S. Data Cupboard is a hodgepodge of different data today... the usual Weekly Initial Jobess Claims will print, then the STUPID 3rd QTR Productivity will print, and then Factory Orders will try erase the memory of a negative -1.3% in the previous report.

Tomorrow's Cupboard will all be about PPI... (wholesale inflation).

To recap... Yesterday, was nothing but ordinary as Gold registered its largest one-day gain of $244 and Silver had a banner day too! The dollar rallied after getting sold for so many days in a row... Chuck believes that the PPT intervened and saved the dollar ... for now that is... And the POTUS believes that the dollar is still a safe haven... Don't ask me what he's thinking.

Here's your snippet: "Days after Japanese bonds crashed, sending tremors through global financial markets, traders were still stunned by the speed and breadth of it all. A quarter-point surge in yields “in a single session,” marveled Pramol Dhawan, a fund manager at Pacific Investment Management Co., “let that sink in.”

In the Japanese government bond market of old, it would take weeks — sometimes months — for yields to eke out, tick by tick, a move of that magnitude. For most of the 21st century, the JGB market was so steady — and interest rates were stuck at such rock-bottom levels — that Tokyo was viewed by investors around the world as a source of both cheap funding and of stability during times of global turmoil.

Last week’s selloff, accompanied by dramatic swings in the yen, made clear that those days are over. Inflation, long dormant in Japan, has taken hold and, moreover, Prime Minister Sanae Takaichi is pushing fiscal stimulus plans that would swell a government debt pile that is already uncomfortably large. As a result, investors have been frantically sending bond yields up to levels once unthinkable — more than 4% on the longest-dated JGBs. That’s exerting upward pressure on interest rates from the US to Britain and Germany.

Traders are braced for more disorderly market swings as Japan hurtles toward a Feb. 8 snap election for which both Takaichi and her rivals have campaigned on looser budgets. An even bigger worry for global markets over the long term is that the new normal of higher Japanese yields will prompt domestic investors to bring much more of their money back home. Some $5 trillion of the country's capital is deployed overseas, and that’s even before accounting for the yen that foreign funds have borrowed for their wagers in financial assets around the world.

“It’s a new era,” said Masayuki Koguchi, executive chief fund manager at Mitsubishi UFJ Asset Management, one of the nation’s biggest investment firms. “I don’t think Japan’s yields have gone far enough yet. This is just the beginning — there’s a chance that bigger shocks will happen.”

T. Rowe Price’s Arif Husain describes Japan’s rising rates as a financial San Andreas faultline, with each tremor leading to feverish speculation over when the big one will come. The selloffs in the $7.3 trillion JGB market have been getting wilder and more frequent since the Bank of Japan ended its experiment with negative interest rates in March 2024, with nine occasions where losses were over two standard deviations worse than the average over the period.

Even by those standards, Tuesday’s selloff stood out. The plummet in ultra-long debt wiped out $41 billion across the Japanese yield" 

Chuck again... And that should be a warning sign for Global bonds... I'm just saying.

Market Prices 1/29/2026: American Style: A$ .7039, kiwi .6060, C$ .7379, euro 1.1942, sterling 1.3789, Swiss $1.3057, European Style: rand 15.7843, krone 9.5736, SEK 8.8466, forint 318.89, zloty 3.5198, koruna 20.3500, RUB 75.73, yen 153.41, sing 1.2653, 7.8013, INR 91.95, China 6.9463, peso 17.17, BRL 5.2007, BBDXY 1,179, Dollar Index 96.39, Oil $64.77, 10-year 4.25%, Silver $ 119.65, Platinum $2.736.00, Palladium $2.062.00, Copper $6.27, and Gold... $5.534.

That's it for today and this week... This weekend will be the end of January, so one month down in 2026, and we continue to get closer the return of Pitchers and Catchers at Spring Training here in Jupiter, Fla. That is for my beloved Cardinals... I recall when the Cardinals trained in St. Petersburgh, Fla, Al Lang Stadium was where the Cardinals played their games, and the hitting cages (not really cages) were just outside on the backside of the stadium... We could walk right up and watch the players go through hitting practice... Those were the days my friend, we thought they'd never end, we'd sing and dance forever and a day... Chicago takes us to the finish line today with my 2^nd favorite Chicago song: Beginnings... The first time I heard that song, I was so glad that I had ears that could hear that beautiful music... I hope you have a Tub Thumpin' Thursday today, and Please Be Good To Yourself!