Gold and Silver Truth, Consequences, and Confiscations
I think it’s normal to have doubts – especially in rigged markets like this. Stockholm Syndrome creeps in and we begin questioning everything.
Commenting on these markets over the last decade, I often wonder how long they can keep it all together. The entire house of cards has stood up much longer than anyone has expected. The next wave of investors will likely go through the almost reflexive reach for derivatives first.
New investors, or would be long term holders, simply have an aversion and are well versed in the worlds of ETFs. Overall, I think we have to keep in mind that each and every move for the time being occurs by the will of those who control it.
Some Traders See Potential For ‘Severely Oversold’ Silver To Now Outperform Gold
Some traders and analysts are wondering if the gold/silver ratio got out of whack after silver was beat up worse than gold during a recent downdraft in the two precious metals.
If so, there might be potential for silver to now outperform or at least hold up better than the yellow metal going forward. Traders who share this view could try to exploit this in a ratio trade, they say.
Others, however, look for silver to keep underperforming as long as the precious metals complex remains in a downtrend.
The gold/silver ratio measures how many ounces of silver it takes to buy an ounce of gold. As the ratio falls, it means silver is outperforming gold, and vice-versa
Silver a more favorable investment than gold
International gold prices are presently at 69 times the price of silver. The gold: silver ratio is significantly higher when compared with the 10-year average of 57.75:1. Moreover, silver has witnessed a sharper fall than gold during recent times. All these factors, coupled with an anticipated surge in industrial demand, make silver a better investment bet than gold, according to analysts.
Global gold prices have fallen nearly 35% off its peaks. On the other hand, silver is trading almost 60% down from its all-time highs.
The Price of Gold and the Art of War, Part II
The 1999 gold crisis was the turning point in the bankers’ war on gold. Intended to disguise the falling value of fiat paper money, a lower gold price signaled that monetary distress caused by the removal of gold from the international monetary system did not exist, that capital markets would continue to expand despite the ever-increasing amounts of constantly compounding debt; and that the already indebted could safely borrow even more, certain that future economic growth would create sufficient opportunities to pay whatever sums already owed ad infinitum.
During the 1980s and 1990s, central banks forced the price of gold lower by loaning gold to investments banks at 1 % interest. The banks then sold the gold pushing down the market price and invested the proceeds in notes paying 5% – 6%, pocketing the difference and later repaying the loans with gold later purchased at a lower price.
Gold Falls to Lowest Since January, Set for Monthly Drop
Gold fell to the lowest level since January, set for the biggest monthly decline in 15, on the outlook for higher U.S. interest rates that strengthened the dollar. Silver dropped to the lowest in four years.
Gold retreated 6.3 percent in September, the most since June 2013. It’s within 0.4 percent of erasing this year’s gains, which were fueled partly by tensions in Ukraine and the Middle East. The dollar has climbed amid improving U.S. economic data and as the Federal Reserve raised interest-rate forecasts, while central banks in Europe and Asia maintained or expanded stimulus to spur economic growth.