Gold Editorials & Commentary

In my recent review of the bankster assault on the silver market, I alluded to the fact that we knew there was no "bubble" in the silver market, since there had not been the build-up of inventories which must take place before any commodity cou

GLD - on sell signal.

Commodities prices have been exceptionally volatile in recent weeks, with big daily rallies and plunges intermingled. Seemingly without rhyme or reason, commodities surge one day as traders crave riskier bets but then fall the next as they flee risk.

Having pumped the financial system with liquidity for over two years, Ben Bernanke has now decided to take his foot off the pedal temporarily. Indeed, the Fed is not only NOT launching QE 3 soon, but is going to let QE2 end.

Lately there have been calls for the US to sell some or all of their gold in order to help reduce the debt and budget deficits.

In 2010 the US went into debt a further $3.5 billion each day.

How can any Economist, Analyst or other type of seer or prognosticator completely ignore Government actions and policy changes, including the consequences both intended and unintended, of Fiscal and Tax policy and still expect to be creditable?

Aren´t silver investors funny?? - they were raving bullish when the price was close to $50, now that it's down about $15 and near to $35 they are despondent. In the words of that famed alien with pointed ears, this is "highly illogical".

It is no longer a matter of whether or not you should buy gold and/or silver but, rather, which type of investment(s) and how much.

There is a pattern that just jumps out at us, which we want to present as our new highest probability scenario for the big picture.

Let's start off today with an old classic by Olivia Newton John, "Let's Get Physical." Cheesy? Absolutely. But, as it applies to the precious metals market, it's what you really want to do.

GLD - on sell signal.

Sources

Futures contracts are a market solution designed to hedge tomorrow's uncertainties; the risk of unforeseen future events ruining the best laid plans of today.

In a single week, the manic euphoria gripping silver recently was utterly obliterated. After promising such rapid wealth creation, this metal collapsed in what can only be described as a near-crash.

GLD - on sell signal.

It was a week like we haven't seen since the beginning of the crash in early 2008, but this time it was mostly in the commodity sector.

Silver was one of the top priorities for many of precious metal traders until last week. However, silver market witnessed a dramatic turbulence in recent days. Let's examine what has happened in silver market, in detail.

The beleaguered US dollar has certainly challenged silver's crown of being the most-one-sided trade lately.

The past few weeks we have been seeing the US Dollar slide to new lows at an increasing rate. The strong devaluation of the dollar has sent precious metals like silver and gold rocketing higher out of control sending them parabolic!

Silver has posted an incredible first four months of the year, appreciating by over 60%! But we all know the adage that nothing goes up forever and silver proved it true by finally hitting a wall and correcting by 15% in just three days.

The interesting thing about gold is that although it has been in a steady long-term uptrend there has still been no meltup, such as we have seen in silver, but if the dollar really caves in that could very well happen - and such a meltup may have just started t

GLD - on buy signal.

Last week, Barron's reported record earnings for the Dow Jones: $850.91. But just 2.5 years ago in August 2008, Barron's reported record low earnings for the Dow: -$109.43.

We are entering the six-month period of negative seasonality from May 1 through October 30, which will present a headwind to the market's current rising trend.

{This update to an editorial I wrote on 02-10-11 was provided to subscribers on our website over the last couple of weeks and is provided in limited scope with updated charts. The link to the original article follows.}

Several very important currency effects are at work. Most economists are either silent on the factors or wrong footed on the dynamics.

Explanation

When gold hit the psychologically important $1,500 level it didn't surprise us, but we admit that silver's recent performance gave us a small thrill.

Having just written a commentary explaining why gold and/or silver "mania" is much more of an imminent event in Asia than in the West, when I saw silver leap more than $2/oz in early, Asian trading on Monday that definitely got my attention.