Silver surged 3.5% yesterday rising 65 cents and closing at $20.04/oz and gold rose by 2% or by $23 to close at $1,348.80/oz after poor economic data in the U.S. underlined deepening concerns about the economic and indeed the monetary outlook.
"What we shall witness will be the equivalent of watching a well-trained racehorse running down the track and suddenly, each of his legs panics and decides to do something different. The lack of coordination with this sudden development assures one thing only – that Crazylegs is going to go down hard. You won’t want to be riding this horse when the time comes; you’ll want to already be out of the racing business."
Silver is up almost 8% from last week's lows, surging back towards $20 and above its 50-day average ($19.70). Gold is also rising but we note that the post-Fed-Minutes outperformance of gold over silver (as both fell) has been erased...
The return from summer holidays has started in much the same way as we left off August, with another subdued session that has seen European stocks little changed, Asian shares advance and S&P futures are modestly in the green amid a flurry of M&A. The US dollar weakened, with the Bloomberg Dollar Index down 0.2% for the 2nd day in a row as prospects for a U.S. interest-rate hike this month remained subdued.
Recognizing that the departure from gold and silver backing to our money has led to crushing debt and great financial instability, a few freedom-minded state legislatures have begun to consider how to defend themselves and their citizens.
The longer that central banks force negative interest rates – and wipe out the value of savings, pensions, and insurance accounts by denying them return on investment – the more attractive gold and other commodities become as a safe haven for maintaining flexibility. Moreover, the closer the system comes to unraveling altogether, gold and silver remain attractive as a means of holding onto money with ready, liquid exchange value.
Paper, digital and financial proxies for gold are not real gold. Hence the importance of owning coins and bars either in one’s possession or in allocated and segregated storage in the safest vaults in the world.