Gold and Silver Rally on Weakness in the U.S. Dollar

CLICK HERE FOR NEW Morgan Silver Dollars

CLICK HERE FOR NEW Peace Silver Dollars

CLICK HERE FOR NEW $20 Gold Saint Gaudens

CAC Grading Service Planned for Start in 2023

According to Albanese, CAC Grading Service is composed of over 125 strategic partners who are professionals in . . . . Larry Jewett

Silver Set to Shine Next Year, Says Citi

A second sign that silver could rise next year is the move above 80 by the gold-silver ratio (GSR) . . . . Tim Treagold

Gold Pressured on Hotter Than Expected US CPI

US short-term interest-rate traders see about a one-in-ten chance of a 100-basis point . . . . Ross J Burland

U.S. Congressman Introduces Gold Standard Bill as Inflation Spirals Out of Control

Economists have observed that the elimination of gold redeemability from the monetary system freed central bankers . . . . Accesswire

Physical Gold Demand Soars

How do you know when gold demand is strong? One solid indication is when . . . .Patrick A. Heller"

Last week was truly bad for precious metal investors with Gold down $60 and Silver declining over $2 per ounce. What is causing this turbulence and volatility in the precious metal markets?

1) The Strength of the U.S. Dollar.

Why is the U.S. Dollar so strong with high inflation and our economy on the fringe of a recession? Well, many European and Asian countries’ inflation rate are much higher and they are already in a recession. The U.S. financial markets are the prettiest house on an ugly street, and Europeans and Asian investors are switching into Dollars. Remember, we value the precious metal price in terms of Dollars, while other worldwide investors look at it in Euros, Pounds, Yen and Yuan, and these investors think the price is too high.

2) The Current Federal Reserve Policy

The U.S. Federal Reserve continues to raise the Fed Fund rate in an effort to slow inflation. Higher interest rates strengthen the Dollar, cause a slowdown in the economy and drive many financial markets lower. Last week, a few more positive inflationary indicators were released, which resulted in liquidity problems and drove many markets lower. Although the demand for physical investment quality Gold and Silver products is strong, I’m seeing a lot more sellers recently. Why, the money is needed for margin calls from the equity and commodity markets?

3) Russian Gold

I have mentioned numerous times the problem that the ban on Russian Gold sales has caused.
While the Gold supply line to the world’s largest mints has been disrupted, many mints have cut production. Our coin allocations have been dramatically cut for this year and early next year. That is what is causing the increase in premiums on newly minted Gold, Silver, Platinum and Palladium coinage.

The speculation is that the Russians will strike a deal for their $10 Billion annual Gold production with the Chinese or Indian governments. I believe that could be part of the cause for the recent downturn in the Gold price. Once a deal is reported, I think it will change the direction of the Gold price higher.

Gold closed at $1,642 last Friday, down $60 for the week and $25 higher than the low of the year. Trading volume in western markets is at the highest level I’ve seen in months. Physical demand from Turkey, India and China are up dramatically. In September, Turkey imports showed an increase of 1,700%, and I expect to see sharply higher September numbers from China and India.

Today: This morning we saw a strong rally in European equity markets, which drove up the value of the British pound and Euro caused the U.S. Dollar to sell-off. Gold hit a high of $1,669 before seeing light selling.

If last week Gold investors had a bad week, Silver investors had a terrible week. Silver dropped over $2 last week and led the precious metal markets lower. The anti-inflation campaign that the Federal Reserve has taken on seems to affect the Silver price more than Gold. Silver closed last Friday at $18.02, down $2.16 (10.78%) for the week. The Silver-to-Gold ratio soared higher to 91.25-to-1.

Today: Silver rallied with the price of Gold, moving from $18.35 to $19.04 per ounce. After last week’s sizeable decline, the Silver price remains under-valued and should move up at a higher percentage as Gold leads precious metal prices higher.