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View Full Version : Why gold is still a better barrometer than silver



Katwoman
22nd September 2009, 23:46
If you've been watching gold tonight you will see it leading the charge as the dollar falls while silver lags behind. This is because the moves in gold are now almost entirely monetary while silver is still leading a dual life as an industrial metal and a quasi form of money. But the role of silver could change rapidly as things get worse for the dollar and the price of silver skyrockets making its industrial uses more costly.

JesterJay
22nd September 2009, 23:50
How much worse for the dollar must it get?
Industrial uses are a small percentage of the overall total of the silver using industries.
I don't get how that could make much difference...or what the significance is of this point.
Quasi-money.
Like Kind of Illegal?
JesterJay



If you've been watching gold tonight you will see it leading the charge as the dollar falls while silver lags behind. This is because the moves in gold are now almost entirely monetary while silver is still leading a dual life as an industrial metal and a quasi form of money. But the role of silver could change rapidly as things get worse for the dollar and the price of silver skyrockets making its industrial uses more costly.

Katwoman
22nd September 2009, 23:52
How much worse for the dollar must it get?
Industrial uses are a small percentage of the total industry silver is used for.
I don't get how that could make much difference...or what the significance is of this point.
Quasi-money.
Like Kind of Illegal?
JesterJay

Like entirely illegal if your name is Bernard Von Nothaus!

You will also notice that the IMF is not selling tons of silver these days are they?

No for the time being silver still remains in limbo but that is about the change for better or worse.

Katwoman
22nd September 2009, 23:55
BTW if your wondering when breakout will occur read the news:

#
Commodities bounce back as dollar weakens
A tumbling dollar has renewed demand for commodities.
AP via Yahoo! News - Sep 22 12:59 PM
#
Oil jumps more than 2 percent on dollar, Saudi
Oil prices jumped more than 2 percent to top $71 a barrel on Tuesday as the U.S. dollar fell to a one-year low against the euro and top exporter Saudi Arabia said the economy was rebounding.
Reuters via Yahoo! News - Sep 22 12:36 PM
#
Dollar Declines to One-Year Low Against Euro on Global Recovery
Sept. 23 (Bloomberg) -- The dollar fell to a one-year low against the euro and weakened versus the yen on speculation the global economic recovery is gathering strength, encouraging investors to buy higher-yielding assets.
Bloomberg - 1 minute ago
#
Dollar Touches One-Year Low as Fed May Signal Rates to Stay Low
Sept. 23 (Bloomberg) -- The dollar touched a one-year low against the euro and weakened versus the yen on speculation Federal Reserve policy makers will signal today they will keep interest rates low, diminishing the allure of U.S. assets.
Bloomberg - 5 minutes ago
#
Oil rebounds as dollar weakens
Oil prices bounced back above $71 on Tuesday as the dollar fell to its lowest level against the euro in more than a year.
AP via Yahoo! News - Sep 22 11:00 AM



If all this is correct then inflation is just around the corner............................................ ...............................:eek:

JesterJay
22nd September 2009, 23:58
Or so it would seem.
Sooner rather than later.
Works for me.
Is Spot about to be...
SO!?
JesterJay



BTW if your wondering when breakout will occur read the news:

#
Commodities bounce back as dollar weakens
A tumbling dollar has renewed demand for commodities.
AP via Yahoo! News - Sep 22 12:59 PM
#
Oil jumps more than 2 percent on dollar, Saudi
Oil prices jumped more than 2 percent to top $71 a barrel on Tuesday as the U.S. dollar fell to a one-year low against the euro and top exporter Saudi Arabia said the economy was rebounding.
Reuters via Yahoo! News - Sep 22 12:36 PM
#
Dollar Declines to One-Year Low Against Euro on Global Recovery
Sept. 23 (Bloomberg) -- The dollar fell to a one-year low against the euro and weakened versus the yen on speculation the global economic recovery is gathering strength, encouraging investors to buy higher-yielding assets.
Bloomberg - 1 minute ago
#
Dollar Touches One-Year Low as Fed May Signal Rates to Stay Low
Sept. 23 (Bloomberg) -- The dollar touched a one-year low against the euro and weakened versus the yen on speculation Federal Reserve policy makers will signal today they will keep interest rates low, diminishing the allure of U.S. assets.
Bloomberg - 5 minutes ago
#
Oil rebounds as dollar weakens
Oil prices bounced back above $71 on Tuesday as the dollar fell to its lowest level against the euro in more than a year.
AP via Yahoo! News - Sep 22 11:00 AM

Katwoman
23rd September 2009, 00:11
With the Fed "remaining in stimulus mode" (it seems to me they have been in stimulus mode since 2001 but I digress) Bernanke faces the difficult task of stopping a slide into a deflationary spiral akin to the Great Depression or igniting a devaluation of the FRN far greater than the inflation seen in the 1970s. The way I see it he will most likely err on the side of inflation since he is already in "stimulus mode" and if he does he will most likely lose control of it as well.

BTW does any one know if the Fed has an anti stimulus mode??

Katwoman
23rd September 2009, 09:35
If you look at gold this morning you see it is still above $1000 while silver is already dipping below $17 even though the USD is weaker than it was when silver was higher last week. This is your overt evidence that the title of this thread is accurate. During the next several days silver will exhibit more volatility and be a less accurate predictor of the PM markets as they pertain to the dollar than gold which is behaving as reserve currency now. Failure to recognize this might lead you to think another correction is coming based on silver prices but that it not true......its just natural volatility due to industrial demand.

MasterQ
23rd September 2009, 10:43
If you look at gold this morning you see it is still above $1000 while silver is already dipping below $17 even though the USD is weaker than it was when silver was higher last week. This is your overt evidence that the title of this thread is accurate. During the next several days silver will exhibit more volatility and be a less accurate predictor of the PM markets as they pertain to the dollar than gold which is behaving as reserve currency now. Failure to recognize this might lead you to think another correction is coming based on silver prices but that it not true......its just natural volatility due to industrial demand.

Gold and Silver have both unembedded in the stochastics.

Expect lower prices on both.

Looking to the 18 day after more play between the 9 and 18.

Anything below this will be dependant on sideways action closing in the Bollinger Band gap.

I told you this move up was too fast and too soon.

Now we are looking for entry point.

15 - 16 = Buy
14 - 15 = Strong Buy
<14 = REMORTGAGE YOUR HOUSE!!!!

-Q

DaBrownsRPhat
23rd September 2009, 10:53
Gold and Silver have both unembedded in the stochastics.

Expect lower prices on both.

Looking to the 18 day after more play between the 9 and 18.

Anything below this will be dependant on sideways action closing in the Bollinger Band gap.

I told you this move up was too fast and too soon.

Now we are looking for entry point.

15 - 16 = Buy
14 - 15 = Strong Buy
<14 = REMORTGAGE YOUR HOUSE!!!!

-Q

That's what I am waiting/hoping for sometime between now and the end of Nov. 15-16, then POUNCE!!

DaBrownsRPhat
23rd September 2009, 10:57
With the Fed "remaining in stimulus mode" (it seems to me they have been in stimulus mode since 2001 but I digress) Bernanke faces the difficult task of stopping a slide into a deflationary spiral akin to the Great Depression or igniting a devaluation of the FRN far greater than the inflation seen in the 1970s. The way I see it he will most likely err on the side of inflation since he is already in "stimulus mode" and if he does he will most likely lose control of it as well.

BTW does any one know if the Fed has an anti stimulus mode??

They do not understand what the word balance means. They only know the concept of growth and increasing. They do not understand the importance of cleaning out the garbage every once in a while to continue future growth.

DaBrownsRPhat
23rd September 2009, 11:28
EDIT: OOOOOOPS, IDK how but this was a reply to another thread. Wonder how it got in here :(

Katwoman
23rd September 2009, 15:10
As I have said earlier and as the market pattern today now shows clearly you might see some buying ops in silver in the near term but don't count on it for gold.


Gold is money now!!!

of one mine
23rd September 2009, 18:54
2-10x Your Money as New Demon Derivative Delivers Final Blow
Not only are we facing a financial crisis, we are also facing a banking, credit, food, energy and a commodity crisis. In the last year we’ve seen $10 trillion wiped off global stock exchanges. And now the next demon derivative is about to whip down Wall Street and wipe a further $20 trillion off global exchanges, spinning the world into what might end up being a global deflationary collapse.
you asked
of one mine

DaBrownsRPhat
23rd September 2009, 19:38
As I have said earlier and as the market pattern today now shows clearly you might see some buying ops in silver in the near term but don't count on it for gold.


Gold is money now!!!

China is bringing back silver in a big way, and I'd argue it is money now also.

Relayer
23rd September 2009, 20:50
IF IF IF the dollar continues to trade between 76 and 77, your best hope for catching the low point in silver is to get it on a dip down to $16.50.

Why not a bigger correction? It is as Katwoman said....The current dynamics in gold is all about people moving fiat currency into real money. IMO the flight out of the dollar/creating demand for gold is making a typical correction from an overbought condition less relevant. Forget the COT report. $15 and $14 are history. Silver is going to be dragged around by gold. Daily volatility is to be expected.

Hello.....The dollar took another big hit today; in 3 minutes -.34 just after noon. I expect another test of 76 tonight/tomorrow morning. The only thing holding up the dollar is the plunge protection team!! YET THE DOLLAR CONTINUES TO FALL. THEY JUST WANT IT TO FALL MORE SLOWLY! THEY KNOW THEY CANT STOP IT.

DaBrownsRPhat
23rd September 2009, 21:11
IF IF IF the dollar continues to trade between 76 and 77, your best hope for catching the low point in silver is to get it on a dip down to $16.50.

Why not a bigger correction? It is as Katwoman said....The current dynamics in gold is all about people moving fiat currency into real money. IMO the flight out of the dollar/creating demand for gold is making a typical correction from an overbought condition less relevant. Forget the COT report. $15 and $14 are history. Silver is going to be dragged around by gold. Daily volatility is to be expected.

Hello.....The dollar took another big hit today; in 3 minutes -.34 just after noon. I expect another test of 76 tonight/tomorrow morning. The only thing holding up the dollar is the plunge protection team!! YET THE DOLLAR CONTINUES TO FALL. THEY JUST WANT IT TO FALL MORE SLOWLY! THEY KNOW THEY CANT STOP IT.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s

That looks like a drop in 30 minutes after 2pm. Then alarms went off and fix-a-flat was used. I don't know the reasons behind that action though.

Relayer
23rd September 2009, 21:21
Yes. It was 2pm Eastern. I'm in the Pacific Mountain Time Zone.

You need to be looking at a 1 or 5 minute chart broken down into minutes.

Dynomite charts Free and simple setup here
http://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/ChartStation.aspx

DaBrownsRPhat
23rd September 2009, 21:38
Yes. It was 2pm Eastern. I'm in the Pacific Mountain Time Zone.

You need to be looking at a 1 or 5 minute chart.

Dynomite charts Free and simple setup here
http://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/ChartStation.aspx

Nice!

Thanks for the link. I'm bookmarking that one. :grin:

MasterQ
23rd September 2009, 22:49
Forget the COT report. $15 and $14 are history. Silver is going to be dragged around by gold. Daily volatility is to be expected.


You may be more right than you know...or you do know.

Upper 14's and definitely something in the 15's are likely though my friend.

I guess you will be using Kat's infamous "margin of error" to cover your neck being out there :P

Bollinger band lower is sitting just above 14.81. These bands will continue to contract as we are un-embedded now in the stochastics.

What really screws this whole thing up is the dollar is embedded on the oversold side and is making new lows. This isn't helping much confidence in the dollar but there could be some mild pumping, giving just enough room to get in before the whole car falls down.

This is tricky and as you can see from my comments, quite the see-saw.

Either we are still bullish on the trend up for silver and down on the dollar as they are both somewhat connected for the moment or the October seasonal dips will take over and we could push through lower 16, upper 15 for just a spell.

Very tricky situation outside of the fundamentals. TA is crazy right now.

-Q

of one mine
23rd September 2009, 23:11
You said it! very volitile for silver and the dollar fight like boxers going toe to toe. Pass the chips & soda I wanna watch.

Of one mine

LETMYSILVERGO
23rd September 2009, 23:17
Don't Forget The Pop Corn

Katwoman
24th September 2009, 09:55
[QUOTE=MasterQ;71224
I guess you will be using Kat's infamous "margin of error" to cover your neck being out there :P
-Q[/QUOTE]


I always give a 10&#37; margin of error which would allow us to go as low as 15.30 before I would start calling for a new down leg in silver in which case I would call for a return to as low as $14. If silver were to drop that low it would shake out a lot of short term people. Judging from the activity of gold I do not expect that happen. Gold is staying above support, tracing the USD like a hunter stalking prey, and while there is greater volatility in silver, which at times runs contrary to gold, this is due primarily to changes in industrial demand. Despite China telling people to buy silver I do not see it behaving like money "yet". Again that could change at any moment and when it does I expect to see a huge increase in the spot price.

MasterQ
24th September 2009, 10:23
I always give a 10&#37; margin of error which would allow us to go as low as 15.30 before I would start calling for a new down leg in silver in which case I would call for a return to as low as $14. If silver were to drop that low it would shake out a lot of short term people. Judging from the activity of gold I do not expect that happen. Gold is staying above support, tracing the USD like a hunter stalking prey, and while there is greater volatility in silver, which at times runs contrary to gold, this is due primarily to changes in industrial demand. Despite China telling people to buy silver I do not see it behaving like money "yet". Again that could change at any moment and when it does I expect to see a huge increase in the spot price.

hehe...I thought that would rustle you out of the bushes...

Be that as it may your mostly correct. Well I can't argue it too much. Often you are specific with small margins of contrary.

Moving from fiat to Gold moreover than Silver does make sense but it is too much of an expensive sense.

Instead I would argue them both to be of a reliable trade in commerce at almost the same time.

Gold coins etc. would just fetch ya more.

As for this action this morning. We are heading down to the 18 day at 16.41 or so. Should we break through that then yes upper 15's are reachable and a great entry point.

Just remember my savvy buccaneers....

The last 2 years had us at 17/18 and 20/21.

With these recent prices, those are not too short of a mark for major profits with those who wish to bet 16 in the short term.

I would definitely be happier somewhere in the 14's or less!

We have also made higher lows and higher highs all this year which sets up the stage to take out the prior 2 years highs, making 25-30 more reachable next year.

It can be a gamble but that is depending on SOOO many factors right now.

This year has proven so much of what we are going to see for the next 2-3 years easy. Isn't a bitch though when these stars line up though that there is someone seeing it too and ready to manipulate the crap out of the market!!

I hate playing devil's advocate so much when the fundamentals are so strong but that is the life I chose with trading bullion instead of stacking first.

Stackers, get ready, to buy low, and to buy HARD!

I think when you see:

MasterQ = GO
Katwoman = GO
Relayer = GO

and others (sorry if I didn't list more but I have complemented you on your threads) then buy the crap out of this thing!

Good luck to us all!

-Q

MasterQ
24th September 2009, 10:36
By the way Gold just shot under $1000 since monday and made a new lower low.

Silver hit 16.38, completely under the 18 day.

Expect more downward pressure on both these metals for maybe the next 2 weeks, then it is up up and away!

-Q

DaBrownsRPhat
24th September 2009, 10:38
By the way Gold just shot under $1000 since monday and made a new lower low.

Silver hit 16.38, completely under the 18 day.

Expect more downward pressure on both these metals for maybe the next 2 weeks, then it is up up and away!

-Q

You forgot a step between "downward pressure" and "up, up, and away." BUY BUY BUY BUY BUY MORE MORE MORE MORE!!!!