2021-01-03

Precious Metals and Copper vs Money Supply

I have the charts in terms of both M2 and TOTLL (Total Loans and Leases at commercial banks). I have M2 divided by the commodity because it makes the ratio larger than 1. I have tossed in SPY and QQQ to show how they are opposite to commodities and nearing peaks in terms of money supply. The Nasdaq should fall approximately 80 percent versus M2, a return to the peak ratio of M2/QQQ points to $60 at current M2.

The best looking chart to me is copper vs TOTLL. Held the pattern.

I calculated the implied price of every commodity assuming it reverts to the ratio peak vs M2 or if there's a trendline, tags support (for M2 divded by commodity price). These are conservative targets because it does not assume any growth in M2 and assumes no pattern break. For trendlines, I went out to Dec 2026 (6 years), that's simply my default setting for charts. Not suggesting a timeframe. IF it gets there sooner on a trendline, the price would be higher.

Gold $2525

Silver $67

Palladium $4084

Platinum $4570

Copper $10.88

Caveat to all: ratios can be broken, as the palladium chart shows.

No comments:

Post a Comment