Latest Gold & Silver Price News
Last week, the global gold market was rather subdued as the upward momentum in prices ran out of steam hitting resistance at around $1220 an ounce. Despite a mild rally on Friday, gold prices fell for the second week in a row. The price of the yellow metal edged up on Friday from the previous day’s 2-1/2-week low, supported by a slightly weaker dollar and uncertainty over Greece’s debt talks. On-going concerns over a potential Greek debt default weighed on the global financial and gold markets last week as G7 leaders scrambled to try to come up with an 11th hour bailout package.
The pushing on a string theme is really prevalent throughout the gold/silver charts. There is nothing that indicates a shift from the down trend to one that can and will go higher. Almost everyone’s expectations are for gold and silver to move dramatically higher. The charts do not support that collective opinion, at least not at this time.
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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 $1,190.55 down $15.65 per ounce (-1.30%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 1.34%. The U.S. Trade-Weighted Dollar Index gained 0.90% for the week.
Central banks and governments created this addiction – addicted to debt, deficit spending, and Quantitative Easing. Consider the upcoming pain for most people, governments, markets, and pension plans if the drug is removed and we suffer the withdrawal symptoms.
Gold remains broadly rangebound around the 1200 level. Last week, we highlighted the two fundamental drivers of gold and evaluated the odds of a breakout, and while the bearish impact of the strong dollar pushed the yellow metal sharply lower over the last few days, the two-month consolidation zone from 1180 up to 1225 continues to hold. The RSI indicator is testing its corresponding support level at 40, not yet raising any concerns of a imminent breakdown in price itself.
It is only when you compare what just occurred in COMEX silver to other commodities does the extent of the manipulation come through. I’d use the words preposterous and absurd to describe the situation, but the COT report is factual and as real as rain. Instead, what is preposterous and absurd is for anyone to pretend that what is going on in silver is somehow normal. This is particularly true for silver investors and mining companies and their shareholders which are being held hostage to the most defective price discovery process in history.
The 1183.40 downside target given here yesterday allowed subscribers to get long four ticks off the intraday low. Since I received reports of actual fills in the chat room, I’m establishing a tracking position: long two contracts with a cost basis of 1180.90.
Over the last week traders are wondering why has the price of Silver started to fall so quickly. After all, technical breakout just occurred? The truth is dumb money, in the form of hedge funds, have piled into the precious metals sector… and especially in Silver. The chart below shows hedge fund contracts sitting close to 45,000 net longs. Are we in store for a classic shake out?
Palladium caught my eye on Tuesday because it held up quite well when other metals were getting hit hard. Gold was down around 1.5%, while platinum and silver fell around 2%. Palladium was down just .26% and it is edging higher in early trading on Wednesday.
There’s been a HUGE negative price bias when Western markets have been open – particularly during the hours in which the CME has been operating. Since 1975, the bias has remained consistent regardless of the price of gold or price trends. This suggests that the CFTC has allowed tremendous collusion to suppress the price of gold during the CME’s hours of operation. Conversely, precious metals prices soar in Asia when Western markets are closed.
We know that the Federal Reserve cranked up their digital printing presses and created over $16 Trillion in new currency, swaps, loans, bailouts, gifts, etc. in response to the 2008 financial crisis. If you invested in stocks and bonds, the various QE – “money printing” programs were probably successful for you. Examine the following chart and note the impact of QE on the S&P 500 Index.