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Weak

Sean Rakhimov: Upward Trend a Silver Investor's Friend

The Gold Report: The Washington D.C.-based Silver Institute reports that net silver demand has exceeded net silver supply each year since 2004, with a supply deficit of 113 million ounces (113 Moz) reported in 2013. Why hasn't that trend translated into dramatically higher silver prices?

Sean Rakhimov: First, I don't put much faith in these numbers. For instance, CPM Group has somewhat different numbers. Either way, silver supply and demand have been roughly in equilibrium, in my opinion, over the past decade or so. Second, silver manifests itself as a precious metal in times of crisis or uncertainty. When it's business as usual, silver acts more like a base metal and trades more on supply and demand numbers. Silver prices will respond during a crisis as its perception changes from an industrial to precious metal. That's when you will see more of what we saw in 2011 when in the space of about six months silver went up three times. Another period like that is coming.

"Excellon Resources Inc. has a handle on its deposit's cost structure and grade."

TGR: In early June we started to see stronger precious metals prices and that has carried through. Is this a trend?

SR: It is the beginning of a trend. Precious metals characteristically start going up after a prolonged decline, yet early in the reversal they rarely inspire any confidence because the last dozen or so similar moves fizzled after a 1020% move. This could be one of those. Silver is at $21 per ounce ($21/oz) now, maybe next week it will test $18/oz again. It's anybody's guess but I believe that toward the end of the year we'll probably see higher numbersmaybe substantially higher.

TGR: Is there a telltale sign that shows investors that this upturn is real? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/gl8kpOUWCFs/16141

The Government's Disastrous Reign over U.S. Money

By Elliott Wave International

Very few people know that the United States did not create a monetary unit pegged to "buy" some amount of metal, as if the dollar were some kind of money independent of metal.

In 1792, Congress passed the U.S. Coinage Act, which defined a dollar as a coin containing 371.25 grains of silver and 44.75 grains of alloy. Congress did not say a dollar was worth that amount of metal; it was that amount of metal. A dollar, then, was a unit of weight, like a gram, ounce or pound. Since the alloy portion of the coin was nearly worthless, a dollar was essentially defined as 371.25 grains -- equal to 24.057 grams, or 0.7734 Troy oz. -- of pure silver. (15.43 grains = 1 gram, and 480 grains = 1 Troy ounce.)

In a nutshell, a dollar was equal to a bit more than 3/4 of an ounce of silver; or, in reverse, an ounce of silver was equal to $1.293.

The same act declared that a new coin, called an Eagle, would consist of 247.5 grains of gold and 22.5 grains of alloy. It valued this coin by law at ten dollars, meaning 3712.5 grains of silver. [Read more...]

Gold, Silver & the Macro

Those micro managing the precious metals are fixating on the Symmetrical Triangle (bearish continuation) and a coming 'Death Cross' of the MA 50 below the MA 200.

The Sym-Tri has been apparent for about three weeks and the Death Cross is hype put forth by those who would make grand TA statements.  The Death Cross means next to nothing.  I mean, how much good did the Golden Cross that the "community" was pumping in March end up doing?

gold

Gold is bearish and has been bearish by its technicals (below the 50 and 200 MA’s), and ever since the economic soft patch was was put behind us (cold weather, remember?) by its apparent macro fundamentals as well.  NFTRH has been keeping this situation locked down and in a box for future reference.  The box will be opened when the time is right.

Meanwhile, I'd suggest that people avoid micro managing gold.  It is not an idol or a religion, and while there is a whole industry champing at the bit to begin promoting it again, it is just a tool for retaining the value of money.  Sometimes tools sit in the toolbox.

As for silver… [Read more...]

Don't Keep Your Gold and Silver in the US, Says Marc Faber

Publisher Marc Faber discusses the fragile state of the US and global financial systems… how rising inflation will affect the average American… how soon the bubble will burst… and why gold and silver will triumph.

Here are a few highlights:

"The US is a country that likes to create trouble, but they don’t like to clean up things."

"We've now been five years into the bull market and the US economy bottomed out in June 2009. We already had a crack-up boom—not in the economy of the typical household, but in the economy of the super-well-to-do people, whose asset prices rose dramatically and as a result created a huge wealth inequality." [Read more...]

Which Companies Will Bring in the Green?

The Gold Report: In a call with Sprott clients last week, you said that the junior resource market is at an intermediate-term top right now and there will be good summer entry points. Why is the market at a top now instead of May, which is more typical? Should investors wait until the summer entry points to get into good juniors?

Rick Rule: The top could continue through mid-May. If investors have positions in their portfolios that they aren't thrilled with, they should use this market to sell. One of the things I've noticed is that if an investor paid $1 for a stock and the stock is at $0.35even if the stock was valuelessthey are unwilling to sell it for $0.35. In many cases, the stocks that fell from $1 to $0.25 or $0.35 are now selling at $0.50 or $0.60. My suggestion is that this is a great time to take advantage of it.

"Tahoe Resources Inc. has one of the finest silver deposits in the world."

I want to draw people's attention to the fact that the market is up 40% in some cases from its bottom. Amazingly, people are more attracted to that than a market that exhibited bargain basement prices.

Although I believe that the market has bottomed, we're going to be in an upward channel with higher highs and higher lows, but we are certainly going to exhibit the volatility that the market is famous for. It's my suspicion that the summer doldrums will see lows that, while higher than last summer, are substantially lower than the prices that we're enjoying today.

TGR: Gold has been above $1,300/ounce ($1,300/oz) for several weeks. Is that influencing the market? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/q1TvAozm7V4/15899

Gold's Grinding Message

Precious metals boosters will see gold's nominal price break upward and probably get excited.  They will marshal the troops for what could one day turn out to be a full fledged tout, as if the 40% decline of the last 2.5 years had never happened.

gold

But it is gold’s ratios to positively correlated assets that tells the interesting story.  Vs. Crude Oil, the story could be shaping up to be a positive one for the gold mining industry, which is counter cyclical and obviously energy and fuel intensive. [Read more...]

Chart of The Week - Silver

Each Week Longleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

In the May 2014 Silver (or Mini Silver) futures, a recent up-trend has consolidated just above the $21.500 level over the past seven trading sessions. Equity markets have been weighed down by a round of profit-taking in the initial morning hours, giving way to strong upside potential in the precious metals markets.

Yesterday's trading session, February 25, 2014, provided an outside reversal on the daily chart. The market failed on a downside move, reversed, and closed above the high at $22.030. This price action is a bullish near-term indicator. [Read more...]

Precious Metals Grind Out a New Trend

Gold is Monetary Value

We preface the post with a statement that has not changed since I began public writing nearly 10 years ago:  Gold is not about price; gold is about value.  This point was hammered home to me 11 years ago by a person who had much influence upon my viewpoint toward the financial system and its various diseased components at a time when I was ready to listen and understand.

So whether we are talking about 2013′s epic price crash or a new bull trend in 2014, the simple fact is that physical gold itself is a store of monetary value.  That applied last year as the value was marked down by greed and confidence and it will apply this year as it is marked up in the face of a likely unwinding of those things.  Humans, what funny and hyper kinetic animals. [Read more...]

David Morgan: 'The Silver Bottom Is In: Time to Hold, Add and Ride It Out'

The Gold Report: When we interviewed you last, you mentioned the possibility of "resource wars" in 2014 as referenced in Michael Klare's book of the same title. What will that look like to the average investor?

David Morgan: The resource wars have already started. Look at Mexico. It has a resource that it covets very much, and that's energy. That is why the government levied a new tax designed primarily at energy but subsequently adds a 7.5% royalty on mining profits. Is it a war? Not per se, but it is detrimental to companies that operate in Mexico today and in the future. I think we will see even more of this kind of thing in 2014.

TGR: Last year was a volatile year for precious metals prices with silver going below $20/ounce ($20/oz) and gold bobbing around $1,200/oz at the end of the year. Are we still three or four years from $100/oz silver as you said in your last interview? What's going to push it to that level? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/l1jX0Fdi3to/15819

Precious Metals: Risk Management to Opportunity

What Has Been

A solid 2.5 years of risk management (to varying degrees) has been required of precious metals investors.  It was most intensely required after the announcement of QE3, when the net commercial short position in silver began a relentless march toward a very bearish alignment in late 2012 and then the HUI Gold Bugs index lost an important support level at around 460.  Here is the chart of silver with a heavy commercial net short position from NFTRH 215, dated 12.2.12:

si.cot

As for the HUI, NFTRH 215 also noted this on 12.2.12: [Read more...]

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