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In sum, this book is to date the most comprehensive attempt at a critical examination of today’s investment universe from the perspective of the Austrian School and deriving conclusions for investors from it. To this end, we frequently move back and forth between theory and current practice. The difficulty of connecting these two worlds will become clear to the reader as the book progresses: the relationship between taking the time for slow and deliberate reflection and the pressure and urgency that characterize investing in financial markets under distorted and volatile circumstances.
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,057.98 down $19.90 per ounce (-1.85%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 0.03%. Junior miners outperformed seniors for the week as the S&P/TSX Venture Index climbed 0.14 percent. The U.S. Trade-Weighted Dollar Index gained 0.47 percent for the week.
We come to the key point; if the quantity of money is not the whole truth, then what is? The whole truth is that it’s the quality of money that counts. Gold and Silver have quality that cannot be denied or destroyed. Paper has only an illusion of value. When the Emperor’s spear falters, so does the illusory value of his chits. The Petro Dollar is faltering. The Empire of Chaos is faltering. Change your Fiat paper promises for some real money before it’s too late.
Our conclusion is that we have reached huge support areas in 3 leading assets. Do not forget this rule of thumb: Investors make their biggest gains when buying at secular support levels. Given the stiff correction in gold and commodities, we do not anticipate a raging bull market as of the moment support is reached. Our view? As precious metals were the first asset to correct, we anticipate they will be the first to recover.
Modern currencies float in value against each other hour by hour. In each currency, price charts look a little different—even for the same goods at the same time at a fixed delivery port. The variety of these intangible “monies” and the market effort that goes into balancing them against each other and against the flows between their trade zones belies the claim that these embody the ideal form of money. Foreign exchange market trades, weighing 4.4 billion ounces of gold, must clear every day to align these currencies, fifty five times any one day’s trading in actual gold money.
The Fed’s next move will be towards ease because of the weakness in the US economy. However, it would not happen right away, I expect it in the first quarter of 2016, so perhaps in March or April of 2016 I think the Fed will give some kind of easing. What happened in the last 30 days is exactly what we were expecting, but I think it’s come as a shock to them, because their forecasting models are different. And so they’re beginning to wake up to the fact that we’re going to a global depression and growth depression. But now the Fed is waking up to that, they don’t do anything quickly, it’s going to take a few months to digest all of this, they’re going to hope that things bounce back, but I don’t think that they will. Finally, I expect them by maybe the end of the first quarter of 2016 to ease.
With the dollar having recently risen to a new seven-month high, commodity prices are in retreat. The brown line in Chart 1 shows the CRB Index (of nineteen commodity markets) falling to the lowest level since August (through yesterday). That commodity selling started in mid-October just as the U.S. Dollar Index started rising. A rising dollar almost always results in lower commodity prices (and stocks tied to them). The commodity selloff has been quite broad and includes industrial and previous metals, energy prices, and agriculturals. Several of those markets are testing six-year lows.
The first backlit, rigid plastic, waterproof keyboard constructed with silver-based antimicrobial protection to limit transmission of germs, bacteria and mold is now available, according to WetKeys Washable Keyboards, an Atlanta, Georgia-based company. The Silver Seal Glow keyboard uses waterproof LED lighting adjustable in 3 levels to backlight keys, making it useful for low-light environments such as operating suites, laboratories and hospital wards. The keyboard is completely submersible, and can be cleaned using healthcare grade disinfectants, or even in an automatic dishwasher, officials say.
Gold’s rate of change has been more dramatic than U.S. debt, as suggested by the second chart. As the price of gold is in the process to make a lower low currently, it’s rate of change is close to coincide with the one of U.S. debt. The chart suggests that the gold price correction after 2011 was to be expected, given that the yellow metal had risen too much, too fast. Our opinion is that the correction in precious metals is not over, but that the downside is limited.
The metals sold off last week. Gold is testing righ now its August lows. This is a critical price level, gold bulls would like to see this price level hold, otherwise a washout (capitulation-alike) decline could be in the cards. As for silver, it is holding up slightly better. According to the Andrews Pitchfork methodology from PitchforkPlayground.com, gold has been whacked hard as the US Dollar rallies. Support is occurring at the lower median line extension of the modified-Schiff pitchfork and the July/August lows. The outlook of the precious metals is clearly not supported by the secular breakout of the U.S. dollar. As the multi-decade chart shows, the dollar has broken out of its declining secular trendline, earlier this year, and is about to confirm its breakout by moving higher from these price levels.
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,088.94 down $53.22 per ounce (-4.6%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 9.68%. Junior miners outperformed seniors for the week as the S&P/TSX Venture Index lost 1.43 percent. The U.S. Trade-Weighted Dollar Index soared 2.29 percent for the week.
This does not bode well for the short and medium term. We anticipate at least a test of the recent lows; even a lower low is in the cards. However, the good news is that it could become the final (washout) bottom, setting up for a huge buying opportunity!