SPDBRNR – Eyes Wide Open
Sports, Politics, Financial Markets, Silver & More

Precious Metals Update

First things first: SILVER IS OVER $30!!!! Yes, my favorite metal, and now yours as well, has crossed the $30 mark for the first time since 1979/80 when it was on its way to $50/oz.  Gold is around $1,406, Palladium got up to $770 before backing off to $730 (good article on palladium), and Platinum is still the quietest of the four, sitting at just under $1,700.

The silver story is getting a lot more free advertising via CNBC, Bloomberg, Reuters, etc…I have seen two 2 minute segments on silver alone (no gold talk) on CNBC in just the last 10 days.  CNBC went years without ever mentioning our favorite metal, and took quite a while to notice gold’s bull market, even though it started 10 years ago.

Silver is up almost 70% since  late August, while gold is up about 17% in that time period. The Silver:Gold Ratio (how many oz of silver does it take to buy 1 oz of gold) is now under 47, the lowest it has been for over 3 years, after being higher than 60 all of 2010 (until Oct) and most of 2009.

There have been multiple lawsuits filed against JP Morgan and HSBC for silver manipulation, and the evidence from the daily COMEX trading analysis (where silver & gold futures are traded) shows that the banks are trying to cover their huge short positions. Harvey Organ & Dan Norcini are the experts at this stuff, I just read their analysis.

Bottom line, silver’s crucial role as an industrial metal and store of wealth is becoming more known to the investment community, and the momentum it has is building on itself. There will continue to be sharp, volatile corrections, like the 10% correction it had in 2 hours just a month ago (29.35 down to 26.45), but all the fundamentals and long term charts are incredibly bullish.
The US Dollar had a sharp rally recently, but all signs are pointing to that being over now. It bottomed under 76 on the dollar index (here’s a chart) in early Nov, rallied sharply to just over 81, and is now weakening again, barely over 79 now. Obama’s plan of a hiring freeze and salary freeze for govt workers is merely a band-aid on a gaping, gushing wound. The head of the Fed, Ben Bernanke, went on 60 minutes two nights ago to defend his quantitative easing program (fancy way of saying printing more dollars, debasing our currency), saying that it had no costs. Amazing, I guess he pays no attention to commodity markets, as beside the metals, oil is back over $90/barrel, and the soft ags (corn, wheat, sugar, cofee, etc…) are all trending strongly upwards. Inflation is the price we pay for quantitative easing, without a doubt.

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