After A Sharp Correction, The Gold & Silver Rally Continues

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	Warren Buffett Sours On Banks And Likes (Gulp!) Gold
	Dumping bank shares and investing in a gold miner? It certainly doesn’t sound like a Warren Buffett move. . . .Tara Lachapelle
	Gold Price Finds New Support As U.S. Dollar Sinks, Stimulus Talks Fail To Move Forward
	Gold found new support above $1,930 an ounce on Thursday as the U.S. dollar weakened. . . .Anna Golubova- Kitco News
	After A Huge Sell-Off, Here's 5 Reasons Gold Might Be Down But Not Out
	Spot gold prices fell below $2,000 on Tuesday in their biggest one-day decline in seven years, ending a multiweek. . . . Shalini Nagarajan
	Bank of America: Silver Could Hit $50 "In the Near Term"
	A little over two months ago, Bank of America became gold's biggest cheerleader on Wall Street. . . .Tyler Durden
	Silver Bullish Sentiment Hitting Extremes
	We had seen yet another strong week for silver (SLV) with the metal up 16% last week, and years of. . . .Taylor Dart
	Gold Heads For Biggest Drop Since 2013 With Risk Appetite Rising
	Gold headed for the largest downturn in seven years as risk appetite gained after a proposed US tax cut and. . . .Bloomberg

Last week was one of the most extraordinary weeks in precious metal trading I have seen in years. Let's recap what happened:

Monday: Gold traded between $2,015 and $2,048 building a firm base on average volume.

Tuesday: In the U.S. market, Gold opened at $2,025 per ounce then saw selling. Gold traded just above $2,000 per ounce when a wave of late selling hit the session. When Gold broke below the $2,000 level, heavy short selling appeared and cause Gold to hit $1,900 per ounce before the close.

Wednesday: In early Asian trading, Gold tried to rally, reaching $1,920 before the selling started again. In late Asian trading and early European trading, the Gold price hit a low of $1,875 per ounce as short-sellers gained control. This was the key make-or-break moment in this year’s Gold rally. The bears and short-sellers had control and if they drove the price down to $1,800, it would break the upward momentum. However, at the $1,875 level, a major buyer stepped in. The estimated purchase volume ranges from 200,000 to 300,000 ounces of Gold, driving the price back to $1,900 per ounce. During this period, I was fortunate to execute some of my client’s discretionary trades between $1,885 and $1,895 per ounce. Seeing the strong demand, the short-sellers ran for cover and the rally quickly continued to $1,920.

Then, trading rolled into U.S. Markets and the bargain buying stayed strong on heavy volume. The Gold price closed Wednesday at $1,940, near the high of the day. Over a million 100-ounce Gold contracts were traded on Tuesday and Wednesday, which is extraordinary. I would call Wednesday’s trading an inter-day reversal when the price makes new lows and closes on the high. This inter-day reversal was a very bullish sign for the future price of Gold.

Thursday: The rally continued in the world’s leading Gold markets as traders knew that the Gold price was looking good. The price of Gold reached a high of $1,963 on aggressive buying.

Friday: Gold settled down and traded between $1,928 and $1,958 on average volume. After the unbelievable volatility I saw on Tuesday and Wednesday, it was nice to see some stability in the Gold markets.

As the Gold price continues to show strong demand in an active market, my year-end prediction of $2,200 may be too low. But, after last week’s inter-day reversal, it would be good for Gold to spend at least a month trading in the $1,900 to $2,100 per ounce level. That would give investors the time to take profits or add to their holdings while giving dealers the opportunity to pick up fresh inventory and fulfill backorders. I end this part of my report by asking Gold investors, ARE YOU ENJOYING THE RIDE?

Today: A weaker U.S. Dollar Index combined with disappointing manufacturing data out of New York state has put Gold back on the road to $2,000 an ounce. Excellent fresh demand for Gold in Asia, Europe, and the U.S. has taken the Gold price up to $1,982 per ounce.

It was disclosed last Friday that Warren Buffett, one of the world’s most respected investors, made a significant move into Gold. Mr. Buffet’s Berkshire Hathaway Inc. Investment company has been a strong critic of investing in Gold for years. I have heard him many times asking why anyone would want to own Gold stocks or bullion. His unexpected investment into a major Gold position will cause the financial community to rethink ownership of Gold and Gold equities.

For years, many financial planners, trust departments, advisors, and analysts carefully watched what Warren Buffet’s Berkshire Hathaway Investment Company did for direction. His Gold investment should be a game-changer in the mainstream financial world, which should cause hundreds of investment firms to make Gold investments.

What did Mr. Buffett do? He invested $563 Million into Barrick Gold Corporation (GOLD), one of the world’s largest miners of Gold. His 13F filing stated he purchased 21 million shares of GOLD during the period ending June 30th at an average price of $26.80 per share. It hasn’t been disclosed yet how much he purchased in July and August.

To provide the funds for his Gold investment, Mr. Buffett sold Wells Fargo, JP Morgan, and his entire stake in Goldman Sachs. Remember, that although he didn’t buy Gold bullion, the price of a major Gold mining stock is 70% based on the price of Gold and 30% based on operations, production, and management. I never thought I would see the day that Warren Buffett would make a Gold investment; this just confirms that my prediction of $2,200 per ounce this year could be low.

If you liked the high volatility in the Gold price, you’re going to love what happened to the Silver price last week. After reaching a high of $29.50 per ounce during Monday’s trading, it reached a low of $23.50 per ounce during Wednesday morning’s trading. A $6 decline (20%) in only 48 hours on record trading volume is unbelievable. Silver started the week at $27.54 and ended it at $26.06 per ounce, down $1.46 for the week, but still up $8.26 since the beginning of the year. The Silver-to-Gold ratio increase to 74-to-1 last week.

Many of the popular Silver investment products continue to be popular with Silver investors. The U.S. 1oz Silver Eagles, Canadian 1oz Silver Maple Leafs, Australian 1oz Silver Kangaroos, and 1oz Silver Trade Units remain in short supply or back-ordered from the respective mints. The higher premiums over spot reflect the shortages and heavy demand.

Today: Silver reached a low of $26.25 per ounce in Asian trading before finding support in European markets. Silver needs to show price support above $27 per ounce before the price will attack the $30 level again.