Gold & Silver moving higher on Inflation News

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Last week we heard two significant announcements that have long-term effects on the U.S. economy. The first was on Thursday when the U.S. Labor Department said that weekly jobless claims fell by 43,000 to 184,000, down from the previous week's revised estimate of 227,000 claims. Economists expected to see 218,000. This is the lowest number in 51 years and a sign of a recovering economy. The second was on Friday, when it was reported that the U.S. November Consumer Price Index (CPI) rose at the fastest rate in 39 years, 0.8% for the month of November (Annualized it would be 9.6%). Gold closed Friday at $1,783, up $6 on good volume.

In spite of the current status of our Covid-19 Pandemic, the U.S. economy is clearly coming back and both wage and price inflation is moving sharply higher. JP Morgan’s Chief Global Market Strategist, Mr. Kolanovic stated “Our view is that 2022 will be the year of full global recovery, and end of the pandemic, and a return to normal economic and market conditions we had prior to the COVID-19 outbreak”.

So, why hasn’t Gold set a new all-time high price, above $2,100 per ounce? I looked at the primary factors that affect the Gold price, supply and demand, and they are both bullish for Gold. I have talked with professional commodity traders and they believe it’s price manipulation by central banks and large banks. Many of the world’s largest Central Banks are major owners and buyers of Gold, but they have been known to manipulate the price when it allows them to acquire tons of Gold at a weak market price.

As we approach the end of 2021, I expect to see the Gold price to finish strong. December has been a good month for the Gold price during the past four years and last year showed an increase of over $100 in the month of December.

Today: Gold traded this morning in the $1,780 to $1,790 per ounce area, as it moves towards the $1,800 per ounce resistance level. Many of the world’s leading countries are seeing the same thing we saw last week, wage and price inflation.

Silver reached a low of $21.83 early last Friday, before the CPI news was released. The sharp increase in the CPI caused bargain buying and Silver rallied $0.40 per ounce. Silver closed the week at $22.18 per ounce, down $0.30 for the week. Based on Friday’s inflation news and the price of Silver. I continue to believe that the current price of Silver is an over-reaction to the recent Covid-19 news and the sell-off in most of the financial markets. Silver under $23.00 is an extraordinary bargain, especially with a Silver-to-Gold ratio at 80.41-to-1.

Today: Silver stayed above the $22.20 level this morning, as demand for new 2022 popular Silver investment items picked up. A move above the $22.50 per ounce would signal an end to the recent bearish sentiment.