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View Full Version : Some Negatives for Silver and Gold



main1event
25th September 2008, 07:56
Of course we know the positives, but here are some of my concerns. Oil looks very bearish, we are going to have a negative 50 over 200 dma cross. Possibly factoring in a world wide recession. Support is at 80, I do see atleast a retest of 90.

Second, interest rates are actually rising. The U.S. is now a bad loan risk. Its possible that at first it could support the dollar. The dollar held support at 76, it could retest 80.

Now these are my 2 biggest concerns, in the short term we could see a pullback in metals, I dont think it will be full blown crash, I believe we've hit the bottom. However, there could be a secondary shakeout. Gold could get shaken down to 820 and Silver to 11.5 or so.

Anything can happen in the short term, I'm still positioned for the long term.

JaySpizzy
25th September 2008, 08:15
Of course we know the positives, but here are some of my concerns. Oil looks very bearish, we are going to have a negative 50 over 200 dma cross. Possibly factoring in a world wide recession. Support is at 80, I do see atleast a retest of 90.

Second, interest rates are actually rising. The U.S. is now a bad loan risk. Its possible that at first it could support the dollar. The dollar held support at 76, it could retest 80.

Now these are my 2 biggest concerns, in the short term we could see a pullback in metals, I dont think it will be full blown crash, I believe we've hit the bottom. However, there could be a secondary shakeout. Gold could get shaken down to 820 and Silver to 11.5 or so.

Anything can happen in the short term, I'm still positioned for the long term.

Don't get your logic. If the US is a bad loan risk, then that is very bearish for the dollar and bullish for gold, especially with the huge dollar holders wanting to dump.

Also, fundamentally speaking, oil and gasoline inventories are very low right now. Gasoline particularly so (lowest since 1967).

Thirdly, even if oil price collapsed tomorrow, which I don't believe it will, gold has been decoupling from crude, and would continue with the extreme pressure of large quantities of people seeking a flight to safety from the dollars questionable future, given the events of the past two weeks.

Nevertheless, why don't you post the charts you referenced?

main1event
25th September 2008, 08:30
Don't get your logic. If the US is a bad loan risk, then that is very bearish for the dollar and bullish for gold, especially with the huge dollar holders wanting to dump.

Also, fundamentally speaking, oil and gasoline inventories are very low right now. Gasoline particularly so (lowest since 1967).

Thirdly, even if oil price collapsed tomorrow, which I don't believe it will, gold has been decoupling from crude, and would continue with the extreme pressure of large quantities of people seeking a flight to safety from the dollars questionable future, given the events of the past two weeks.

Nevertheless, why don't you post the charts you referenced?

I use stockcharts. Just pull up the $WTIC and see for yourself. Fundamentals win in the long term, as you said oil and gas have tight supplies right now. I believe oil did get ahead of itself and needs to consolidate, it may remain in a bear market for the next 6 to 18 months. We could consolidate between 80 and 100.

When interest rates go up the dollar actually becomes attractive to other countries. So they'll buy dollars if they are getting a better rate than their own. The U.S. isnt going out of business just yet. Americans pay dearly with with higher interest rates, and a higher dollar. A higher dealer will lead to less exports.

If you cant see my logic you are too bullish.

JaySpizzy
25th September 2008, 10:07
oil did get ahead of itself and needs to consolidate, it may remain in a bear market for the next 6 to 18 months.

Fairly impossible to time, if you ask me. Crude stockpiles are down 1.5 million barrels, gasoline down 5.9 million barrels. What we are seeing in the markets reflects a drop in demand, that, in my opinion, reflects the country holding its breath in advance of Congress' decision. Without this info, there is no way right now to call 6 or 18 months of anything. It's a wait and see game.


When interest rates go up the dollar actually becomes attractive to other countries. So they'll buy dollars if they are getting a better rate than their own. The U.S. isnt going out of business just yet.

Will they buy dollars, when we are experiencing a debilitating credit meltdown? I have my doubts. For example, see this story http://www.gata.org/node/6670
China stops its banks from lending to U.S. banks
We are talking an over 10 trillion plus a year market. This is no small thing for US banks, and our dollar. This is why your point confused me. World finances run on trust. Interest rates are just a number, but inconsequential if the basic trust is not there.

I may be too bullish, but this is my opinion.

main1event
25th September 2008, 10:14
Fairly impossible to time, if you ask me. Crude stockpiles are down 1.5 million barrels, gasoline down 5.9 million barrels. What we are seeing in the markets reflects a drop in demand, that, in my opinion, reflects the country holding its breath in advance of Congress' decision. Without this info, there is no way right now to call 6 or 18 months of anything. It's a wait and see game.



Will they buy dollars, when we are experiencing a debilitating credit meltdown? I have my doubts. For example, see this story http://www.gata.org/node/6670
China stops its banks from lending to U.S. banks
We are talking an over 10 trillion plus a year market. This is no small thing for US banks, and our dollar. This is why your point confused me. World finances run on trust. Interest rates are just a number, but inconsequential if the basic trust is not there.

I may be too bullish, but this is my opinion.

Lets say people start pulling their money out of the bank, isnt that cash? Isnt that demand for US dollars? Of course it is, cash becomes king. So we may have a strengthening dollar before that money goes into something tangible.

Nothing but nothing is straight forward. The obvious is that Silver and Gold goes up? So whats keeping it down right now? Obviously other people have some negative views. If you believe its all manipulation then its impossible for it to go up, because these are the perfect conditions for both assets.

JaySpizzy
25th September 2008, 11:01
Lets say people start pulling their money out of the bank, isnt that cash? Isnt that demand for US dollars? Of course it is, cash becomes king. So we may have a strengthening dollar before that money goes into something tangible.

Nothing but nothing is straight forward. The obvious is that Silver and Gold goes up? So whats keeping it down right now? Obviously other people have some negative views. If you believe its all manipulation then its impossible for it to go up, because these are the perfect conditions for both assets.

If people pull money out of banks, it is in an environment where they want safety and wealth preservation. They do not trust banks to keep their money safe, and that means there is systemic weakness. This weakness is recognized and feared by foreign investors who sell the dollar.

IMO, gold and silver are down because of manipulation, and deer in the headlights fear. The main thing that would reverse this is an all out flight to quality because of uncertainty and inflation. We are not there yet, but we may not be far. Who knows?

main1event
25th September 2008, 12:10
If people pull money out of banks, it is in an environment where they want safety and wealth preservation. They do not trust banks to keep their money safe, and that means there is systemic weakness. This weakness is recognized and feared by foreign investors who sell the dollar.

IMO, gold and silver are down because of manipulation, and deer in the headlights fear. The main thing that would reverse this is an all out flight to quality because of uncertainty and inflation. We are not there yet, but we may not be far. Who knows?

I love Ted Butler and I agree with many of the things he says. But day to day activity whether silver is up or down is not manipulation. If it is manipulation then just watch the COTs and you'll know which way silver is going to go. Wah Lah the perfect investment.

Now on to your second thought about safety. Which would you rather have Silver or a Loaf of Bread? The last I checked many people will not take Silver for a loaf of bread. The dollar hasnt collapsed yet, when it does then Silver and Gold will be the place to be. Dont you believe the market has discounted that possibility right now. Do you think you are somehow smarter than the market?

In the long term silver and gold I honestly believe will be great assets to own as I believe there could be a run on the dollar. However, people are liquidating right now, and they are getting dollars which put food on the table. Thus dollars are in demand in the short term.

That being said I dont believe silver will stay down that much longer. We are just seeing a shakeout and consolidation of the latest 30% rally. It may retrace 50% of that rally before heading higher. All stocks do but that doesnt mean they are manipulated.

BTW, the last I checked Ted Butler said there was a net long position. Even swedish banks were covering there put contracts.