Last week, Bill Griffeth from CNBC published a Tweet about precious metals that we found staggering. He reported that U.S. Mint gold coin sales for May were down 60%, silver sales were down 27%, and — get this — the U.S. Mint did not sell any platinum coins.
The fact about platinum is staggering as platinum coins were really hard to get between 2011 and 2013. That’s because platinum is both a precious metal and an industrial metal used in automotive catalytic converters.
Looking at the platinum chart, we see a Livermore structure that could lead to a major takeoff (Figure 1). Simply put: when nobody wants something, and the chart looks good, the instrument could move up a lot. Platinum fits this bill.
Similarly, we see gold breaking a big Fib speed resistance line in Figure 2 and silver bouncing off major Fibonacci support (Figure 3).
What does this mean for crypto?
To start, it looks like retail investors spent May piling into crypto and have totally abandoned metals. While this may not necessarily be bad for crypto, institutions may seize the contrarian buying opportunity in metals and delay crypto purchases. That could create a range in crypto or slow the ascent of Bitcoin (BTC).
Our sources tell us that there was a quote from the Fed that was positive for both crypto and metals. The quote hinted that the Fed was open to Modern Monetary Theory or MMT. Here’s the quote that was just a news headline on an institutional news service: “Fed’s Daly Open to Debate on MMT; It Perhaps Has Some Uses.”
In a nutshell, MMT espouses unlimited money printing and taxing the rich to offset any inflationary impact. This would likely hurt the Dollar in a major way and be positive for both metals and crypto.
In our view, the fact that the Fed is talking about such an initiative has likely ignited the rally in metals.
There is also the idea that capital flight out of China may lead to buying of precious metals and crypto.
Bottom Line: A rally in metals may stall the crypto rally. Then again, it may not. The reasoning behind the metals rally: MMT and capital flight from China should help crypto hold up and eventually join the metals rally.
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