These days, it can be unsettling if you are heavily invested in gold and silver. The market givith and the market takith away. This is not an accident. It’s all just a game for profit by the traders and hedge funds, with a little help on the side from JPMorgan.
Logically, as a long-time observer of the performance of gold and silver, it appears to me that there is an “agenda” – entities who do not allow the prices to rise too much, or too fast. The plan seems to be to “control” the price action and not allow enough upward movement to initiate enthusiasm. It works. In the last few days, we have received calls from some of our long-term clients asking us why the price of gold has collapsed again, and in some cases, just after they made a recent large purchase. Yes, the price did pull back, but it did not collapse. In fact it’s quite the opposite.
Notice the chart to the right, for the last couple of months, gold has traded in a narrow range from around $1,190 to $1,236. Gold is forming a base. It is encouraging that gold just bounced off of support at $1,200 and is hovering at $1,222.70 as I am writing this. Gold is comfortably back above its key 50-day moving average ($1,213.51).
The recent engineered pull back, last week, did not last long. It was not based on anything meaningful, just short-term profit oriented trading.
Silver doesn’t seem to want to trade below $14. Silver is now $14.32, and is almost back to its key 50-da moving average ($14.44). It is trending back up. The logical explanation is that by controlling the price of silver, which is easier than trying to control the price of gold, it makes it harder for gold to take off.
Gold gets the headlines.
Silver is the little sister and is not nearly as important – to the big investors. The physical gold and silver market in the U.S. is so small that it has almost no affect on the price at all. In a bull market when the demand for physical metals is stronger, it will add demand “at the margin.” Just keep in mind that the price is set in the paper market on the COMEX.
So what will it take for gold and silver to break free and make me and our clients happy?” The two most important events that will lead to much higher prices are: (1) When the stock market corrects down, and (2) when the dollar falls (below 90 on the USDX). At the moment, neither is happening. The stock market is meandering around 25,000, going no-where, and the dollar has been the beneficiary of a weak British Pound and a weak Euro. The dollar is “going up” only because the other major currencies used to compile the USDX are performing poorly. I like to say, “It’s the prettiest girl in a group of unattractive girls.”
I’m still hopeful that by the end of the year, gold and silver will be priced much higher than they are today. And I expect the rise to continue throughout the first half of 2019. I just finished reading a report that predicts the Stock Market Will Rally, Bear Market Coming Mid-2019
. That falls under the category of (1) above.
Last night I watched a movie in which a “hit” was paid for in Nazi gold. It wasn’t that long ago when gold was the most prized and valued liquid asset on the planet. Gold has always been a valued asset during times of war. If you pay attention, you can probably hear the war drums beating softly in the distance now. Apart from everything else, gold should be getting a lot of attention right now, with the unthinkable increase in money, debt and credit that are enveloping the planet.
Getting back to my view that a collapse in the dollar is one of the (two) keys to a bull market in gold – Bill Holter brought this to our attention. Check it out..
Larry Fink, world’s largest asset manager…doesn’t sound as crazy coming from a mainstream guy does it?
World’s Largest Asset Manager Warns: The Dollar’s Days As Global Reserve Currency Are Numbered
November 7, 2018
Have BlackRock CEO Larry Fink and Russian President Vladimir Putin been comparing notes?
In comments that sound eerily similar to a warning issued by Putin, who warned during a speech last month that the US risked undermining the dollar’s reserve currency status with its sanctions regime, the CEO of the world’s largest asset-management firm said Tuesday during a panel discussion at the New Economic Forum in Singapore that the US dollar’s status as the world’s dominant currency wouldn’t last forever.
And instead of citing external factors like China’s expanding economic clout and influence, or an insurgent Russia, Fink pointed to the widening US budget deficit as the biggest risk to the dollar’s status as the global hegemon. And while it might not happen tomorrow, or next year, over time, as US interest rates rise and the federal government strains under its tremendous debt burden, the creditors who were once eager to buy up Treasury bonds will gradually disappear.
“We’re going to move there over time” Fink said.
The more you know about gold’s role as money the brighter its prospects become.
The End Of The ‘Nanny State’ & What Happens To ‘Prices’ When Gold Is Money
We are getting ahead of ourselves here. Gold does not circulate as money – yet. It might never do so. Perhaps the end of government currency, fiat money imposed on us by government laws, may never be replaced by what for millennia has been the people’s money, gold. Do we even wish it? Given what we have to do to get there, probably not.
It is hard to think of a life without Nanny State giving us her money-tokens to buy our sweets, telling us what to eat and what medicine to take. But Nanny State is getting long in the tooth. When she was younger, she was less controlling. Her constant refusal to allow us, the ordinary people, to do what we want is an increasing source of friction.
Growing numbers of us can see Nanny State should pack her bags. But Nanny State’s favorites are frightened at the prospect of no nanny. Those of us who want a life without Nanny State can’t agree what it should be, and don’t know what happens when she goes.
Regarding the following excellent article, I should point out that our precious metals storage program with Brinks in Canada is every bit as safe as storage in Switzerland – and more convenient too, especially if you decide to take delivery of your metal.
Egon von Greyerz
Gold Confiscation and Manipulation
Owning gold is life insurance and wealth preservation. Anyone who has lived through hyperinflationary periods in the Weimar Republic, Zimbabwe, Argentina or Venezuela understands the importance of gold. But it is not enough just to own gold or silver. It is also extremely important how you hold it and where you hold it. We have just seen another example how governments unilaterally “confiscate” gold.
VENEZUELA CAN’T GET THEIR GOLD BACK
The Venezuelan government gold held at the Bank of England (BoE) is just the latest example of the importance of choosing the right jurisdiction and the right vaults. Venezuela is holding 14 tonnes of gold with the BoE in London, worth $545 million. This is a relatively small amount when it comes to sovereign gold. Still, Venezuela has for some time asked to get it back but the BoE has come up with all kinds of excuses like it is hard to get insurance for such a big amount and this has allegedly delayed the release of the gold by several weeks. This is of course a ridiculous excuse.
About Miles Franklin
Miles Franklin was founded in January, 1990 by David MILES Schectman. David’s son, Andy Schectman, our CEO, joined Miles Franklin in 1991. Miles Franklin’s primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry. In November, 2000, we decided to de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle. Our timing and our new direction proved to be the right thing to do.
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