Silver up 7%…….
Gold holds steady..
As we have mentioned here before, the swings in silver are going to get larger and larger. Think swells in the pacific just before a storm. Being at the peak of both is rather intimidating. Just ask the CME.
The shift out of the US dollar seems to be coming as China was a buyer of roughly 25 million ounces of silver in overnight trading last week. I’m not sure if they were back last night as something was pushing silver up over $39/oz.
As the sun peaked in the east, silver was flying out the doors taking the price down over 8% for the day closing just above $35.
Hedge fund money is moving again, and the effects will be felt. Jeremy Grantham of GMO asset management forecast the following;
“A second commodity collapse [after the 2008 plunge] may be psychologically hard to invest in…[But] in the next decade, the prices of all raw materials will be priced as just what they are, irreplaceable.”
Gold and silver is one thing that the Federal Reserve can not control outside of it’s borders. That’s not to say that they can not have a considerable impact with US consumers.
The CME margin requirment debacle does not stop global events. The Indian buying season is still upon us, and India is viewing what Americans fear in precious metals, as a fire sale! India’s gold market is bustling, China is buying huge amounts of silver at the drop prices.
Why wouldn’t you buy?, you could always trade gold for any currency you like. To China and India, gold and silver is not just a commodity, or an old worthless relic. To them it is a sign of wealth… currency!
Keep in mind….
The central banks of the world have never stopped transacting in gold.
Don’t be scared back in to the US dollar as the value seems to be rising against the falling silver and commodity prices. Preserve as many ounces as you can during the storm, lighten up on the silver load and stock up on gold and platinum to anchor your buying power down, now and in to the future.
America needs to find a buyer for more treasuries before they make a final decision on the debt ceiling issue. Not many buyers will be found with precious metals at these value levels in the US$. Gold and silver will rise as soon as this issue is figured out within this next three week window that is allowing another buying opportunity for investors.
You will need a sharp strategy going in to this next phase, and gold and platinum should be a part of the vehicle you use. At the very least gold, if platinum is out of your reach for the moment.