The writing is on the wall, and as I have written about numerous times, Central Banks are well aware of the necessity to move a significant portion of their reserves into gold bullion, which is exactly why they have been net positive buyers over the last couple of years.
Just as expected, gold and silver bullion have pulled back, suffering throughout the week as a renewed attack was presented against precious metals, causing wild gyrations and shaking out those who just recently "joined the party" and are historically considered "weaker hands" than those who have been dollar cost averaging into the price of precious metals over a longer, more challenging period of time.
Analysing markets to determine where they’re headed is all about probabilities. Anyone who says with 100% certainty that a market is going up or down is being dishonest. But, the probabilities for potential outcomes can be judged based on prevailing information, multiple toolsets and sources, and a tried and tested process. With this in mind, there are two primary scenarios that I am monitoring over the next few weeks with respect to Gold which I’ll share today.
I saw a lot of links and discussion over the weekend on inflation vs deflation...at least here in the U.S. Since it's on so many minds...and so important in the months ahead...I thought I should chime in.
Gold and silver just experienced a stunning week, in which they surged higher based purely on real, solid fundamentals—and truly spectacular gains are yet to come
After so many years of false starts, dramatic reversals, and frustrating disappointments, so-called Goldbugs and Silverbugs such as myself are now finally being rewarded for their saint-like patience, thanks to the Fed and global central banks.
We've been writing about this for months, but with so many generalists still pushing the opinion that gold only moves as an inverse to the U.S. dollar, it's time to write about it again.
We got the anticipated pullback in Gold right on schedule the night before the FOMC meeting on Wednesday. It dropped from a high of 1975 to support at 1900. Given Silver’s dramatic outperformance relative to Gold, it was no surprise that the dump in Silver was far more precipitous. Silver fell ~15% between 10pm Tuesday and 3am Wednesday morning. That’s equivalent to a drop of ~500 points in the S&P from 3200 to 2700, “in just five hours”. Black Monday type moves.
