The futures markets for precious metals are now at a crossroad. The short positions of the hedge funds, which have driven gold and silver prices higher have now been significantly reduced and are no longer extreme. In gold the bullion banks appear to have taken these positions onto their books and also as swaps. In silver, the shorts have been crossed out against matching longs with open interest falling by 18,000 contracts since mid-February. So instead of precious metals being driven by a bear squeeze, the market will need to either continue to lose physical metal to Asia or find growing support from new bulls attracted by the reversal in trend. [Read more...]
While gold is the king monetary metal, silver will turn out to be the king precious metal performer. Currently, gold is stealing the show as the East (China) continues to consume more than total world gold production.
However, silver will surprise the markets in the future as overwhelming demand will outstrip supply in a big way.
The key factor that will drive up the price (value) of silver much higher than gold in percentage terms, will be its affordability. As the price of gold heads back above $1,500 and silver to $30, an individual can buy a heck of a lot more silver than gold.
As the public and market are lulled back to sleep (presently) on the value of silver, there will come a time in the future when it will be impossible to acquire a single ounce… only at much higher prices.
Silver Will Be The King Precious Metal Performer.
Circumstances are at such a point that one no longer needs a justifiable reason for being long PHYSICAL gold and/or silver. Does it matter that the 50 day moving average is going to cross the 200 day moving average, now being bandied about as though there were a degree of magic associated with the event? Does it matter any more that China remains a record buyer of physical gold for over a year? Did it ever matter that coin sales to the public have been setting records for well over a year?
Those who already own gold and silver will be protected, to a larger degree than otherwise, against the certain-to-come devaluation[s]. We have been advocating the buy and hold strategy for over a year, specifically for physical gold and silver and personally holding the PMs, as well. One of the provisions of the Patriot Act, forced through at the direction of the elites to gain further control over unaware citizens, allows the government to raid anyone’s safe deposit box that may hold either gold or silver. Still trust the banks?
Some own gold and silver from much higher prices. That is okay and not a cause for concern! When the fiat Ponzi scheme fails, the unnaturally suppressed prices for both PMs will make $50 silver and $1800 gold look like an incredible bargain.
The takeaway from all of this is the more than ever pressing need to keep on buying as much gold and silver as one can afford. Forget price. Ownership is all that matters.
The rise in the gold price ran into profit-taking on Wednesday. Having risen $160 to $1345 some short-term profit taking is only to be expected, and silver followed suit.
The correction in silver will not last long before lower prices attract more genuine buying.
The same is broadly true in gold, though this is a more liquid market. Demand for physical metal from China and Hong Kong continues at record levels, and there is talk of the Indian Government relaxing import restrictions in this election year. I personally think it unlikely, but given that Indians are currently paying well over $1400 equivalent the effect on markets of such a move would be immensely bullish.
After attempting to climb above $22 during overnight trading, silver drifted down throughout the London session, and has been hammered on the COMEX open, down over $1 to $21.01.
Gold has also been hit hard, down over $20 from overnight highs of $1345.
With the crisis in Ukraine escalating, the dollar has been catching a safe haven bid, and the Western Central banks have not missed their opportunity to reassert pressure on the paper metals markets. [Read more...]
Things in the U.S. will begin to fall apart in 2014 as the energy production begins to peak and decline impacting supplies and price in a big way. This will cause a profound shock to the Stock, Bond and Paper markets.
Precious metals will be some of the best and safest assets to own during this “Energy Induced Collapse” period.
As Wall Street and the financial media carry on business as usual, the underlying foundation of the U.S. economy continues to disintegrate. Very few Americans realize we have past the point of no return. This holds true for many of the precious metals investors. [Read more...]
In the long term, Gold & silver prices have dramatically increased for 100 years since 1913, the birth of the Federal Reserve – our inflation machine. Worse, since Nixon abandoned the partial gold backing for the dollar in 1971, the inflation machine has accelerated.
Over the short term, Silver has gained 7.7% in 50 days. I think December marked a double bottom in the silver market, but we’ll know in a few months. Crashes and large rallies are likely to happen more often in this era of High Frequency Trading and “managed” markets.
The next time you hear from an analyst that silver is likely to remain under $25 for the next decade or drop to $10, or whatever, remember 100 years of history, 100 years of price increases, and 100 years of official national debt exponentially increasing at 9% per year – compounded each and every year.
The financial sky is growing dark. The stock markets are experiencing volatile trade winds. The barometer of the economy grows weak as indicators point to another recession looming on the horizon.
The Fiat Monetary System and Derivative’s Monster is heading towards certain death…. it’s just a matter of time.
The Precious Metal Storm is coming… unfortunately, the public is not prepared. [Read more...]