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« Gold Poll: The Grandich, Soros, Nadler, Challenge | Main | The ABCs of ETFs »

Gold and Silver unmoved by gold sales or a Fed rate increase

USD Gold Silver Chart 22 February 2010.JPG

The recent news that the IMF would be holding more gold sales and the sudden increase in the discount rate by the Federal Reserve Board should have dented both gold and silver, however, these events made little impact on the precious metals as the above chart demonstrates.

We expect the gold to be absorbed quietly and no doubt we will be informed after the event as a large player, such China or India as they continue with their own acquisition programme. The increase in the discount rate isn't much more than sabre rattling as the Fed don't have too much room to move in this area as the economic recovery is still fragile. To be aggressive with rate rises would most certainly bury the recovery. Also weighing heavy on the minds of the powers that be is the possibility of a double dip recession which we see as being on the cards if we do not tred very carefully at this juncture.

Back to the PMs, the thing that interests us is the strength that they have shown at this time despite these two events and it bodes well for the immediate future of both gold and silver. So we will stick to our expectation that gold will push on and challenge its previous all time high in the near term and surpass it on its way to $1400/oz or so.

We see this as a time to get into position and not a time to sell any of your core holdings and yes there will always be detractors and without them we would not have a market.

All the best.

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Reader Comments (3)

This Gold has been on the market for a while, and still hasn't sold.

Anyone who bought gold between 2001 and 2008 is banking on someone else buying it now. They haven't made their money yet, all they have done is bought the gold and driven the price up. The price is high, but to bring home a profit, they have to sell, and sell fast. There has already been three distinct panic points since gold hit it's peak in December, and another one unfolding right now. I'm sure they would like for us to believe it will keep climbing, but can we really close our eyes and hope to get in on an opportunity that's already well passed it's peak and falling?

February 23, 2010 | Unregistered CommenterJames Hovland

I just do not understand that people, especially Gold Bears, would not expect that there are actually people, like myself, out in the financial arena that neither want Gold to rise or fall in price. (Wow!!! That must be incredible that someone does not look to "profit" by investing in Gold!!!)

Well...Allow me this pleasure...I am one of those "investors" written about in the opening paragraph. What I find incredible is that both Bears and Bulls pleasure in dishonest money, fiat money, that "floats" in VALUE when, in reality, the money has no value whatsoever and is, for all intents and purposes, WORTHLESS, only a measure of someone else's debt. (What?!? Money is debt?!?)

That is right. Money is debt. That is how it is created. When debt is retired, either by payoff or default, then the money is destroyed. That is the shell game, the FRAUD, that the Federal Reserve has been playing since 1972, when the United States DEFAULTED on the Bretton Woods agreement, effectively stopping the fixed redemption of currency for Gold.

So...I want an honest backed by Gold. Until that type of currency is created I will continue to BUY and HOLD Gold. When the Price of Gold decreases, as it has in recent trading sessions, that only signals that our fake Monopoly money is increasing in VALUE...for a time. Likewise, when the Price of Gold increases, as it has consistently for the past decade, that is only a signal that the VALUE of our currency has decreased. (Which, if one looks at what has happened, our currency has lost about 65% of its purchasing power over the past decade...Hmmm...)

So, personally, I want to retain the PURCHASING POWER, the VALUE, of my savings. That is the reason behind why I acquire Gold. What I find incredible is that myopic people are also bitemporally hemianopic when they attempt to look at the market, fixated on price, while neglecting to consider VALUE.

These forms of blindness seem to be endemic when considering the mindset of the average investor. The average investor happens to be AFFLICTED with blindness. They refuse to OPEN THEIR EYES and SEE what is happening around them in the financial enviromnment.

I pray to God Almighty for these people...Really...I do. They need it as they do not have the foresight necessary for financial survival. (Profitting off of Gold...Kind of reminds me of the Moneychangers in the in dishonest money!!!)

Do not seek riches when buying Gold. Seek to hold the VALUE of your savings, in prudence, in moderation. Gold will neither make you rich or poor. Of course that is NOT what it is about. There are many other things to trade in order to profit.

For those whom have the ability to see...BUY GOLD...Gold is always a bargain...AT ANY PRICE. (I very rarely use the word, "always", however, in the situation that we are facing...that is the appropriate word.)

Tall Tom
I Cor 13

February 25, 2010 | Unregistered CommenterTall Tom

For X amount of gold, I want to be able to buy X amount of cheese or cars or property, and to be able to buy the same in two years time if I want. What I do not want is to be able to buy X amount of cheese or cars or property with X dollars this year and then pay for the same amount of these commodities for say 2X dollars in two years time. With variable timelines the above statement sums up the history of paper currencies. For me then, gold is the stable currency whilst the fiat goes up and down, [mainly down] One further point, The Greeks want 'their' gold back from Germany which they say the Nazis purloined, they do not want compensation in dollars, euros or yen, they want GOLD. Well well well. What a surprise, not.

February 26, 2010 | Unregistered CommenterRoger Levinson

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