Commodity Chart Of The Day: Silver – I see all these articles on selling silver… well, I’m a buyer for clients. Silver futures have declined 10% in the last month, and are lower by 16% from their highs in the end of November. I think silver was a sale at $32.50-$34.50, and is a buy now. My understanding is that we try to buy low and sell high. Look at the chart above. It appears futures are finding solid support around $28.50/ounce in the May contract. For the last 11 sessions, we’ve been in the $1 trading range, and my feeling is that when we get out of this consolidation phase, the direction of the breakout will determine the next leg.
Today legendary trader Jim Sinclair predicted the paper markets would disappear as the gold war intensifies. Sinclair also spoke with King World News about the “end game,” how various countries are positioning themselves, and how this will impact the gold market. Below is what Sinclair, who has been actively trading the markets for over half a century and whose father was business partners with legendary trader Jesse Livermore, had to say about what is now taking place as the gold war continues to rage.
Jim Sinclair: “The market character has now changed for gold and very few recognize that. Gold is a trading market which involves sovereign entities, very serious sovereign entities such as China and Russia. Recently you can even see the minor central banks such as South Korea purchasing gold.
The price fixers can manipulate or play the futures or paper markets, but it’s the physical market, which will determine the price of gold. Physically is monetarily. Paper is casino. Because the monetary nature of gold is what’s going to create a significant increase in price, the futures markets will start moving towards cash markets….
“As gold rises now from the lows that I believe we are already in, towards the $3,500 mark and above, you will have the futures exchanges increasing margins until they get to where they were when they thought the Hunts were going to take delivery. That was 100% margin.
A 100% margin is a cash market. The futures market is not going to explode, it’s simply going to disappear as the futures markets become cash markets. This will take place as the price of gold rises to $3,500 and above for sound reasons.
These powers that are out there working these markets we would both agree must be respected. They can make a market sing and dance any time they want. But there is the offset against the physical demand which has expanded significantly as the market came down, even at the coin level for mints.
Last Monday’s Sell-Off Was Bad… But the Next Market Move May Be Worse! On Monday, February 25 – in just a few hours of selling, more than a month’s worth of market gains were lost. And now – with the Dow being artificially pumped to a new all-time high – the danger exists for another fast-moving sell-off when the bubble inevitably bursts.
In this environment, fast-moving – and dramatic – market moves have become the norm, rather than the exception. And it’s important that you prepare yourself now for that reality.
This brief video explains how you can protect yourself – and profit – from the next major market move.
For example, let look at the GDP over the last four quarters.
After the Fed has spent over a trillion dollars, the U.S. GDP has fallen from 4.1% to essentially zero! The markets have refused to acknowledge this deceleration for now.
That may change should the GDP break hard to the downside. Heads up on the following before you over allocate to the Fed. In the first quarter of 2013, we’ve seen a huge spike in gasoline prices nearing a danger zone. That will impact the GDP in the first quarter results. It is hard to estimate where gasoline prices will be at the end of March given the negotiations with Iran and Israel. If oil prices head sharply higher as tensions worsen, a lot of overextended bulls are going to get caught – but, on the other hand, if peace breaks out in the Middle East, who knows where oil prices will go. Gasoline prices above $3.85 a gallon is a growth killer.
My biggest concern is what kind of an impact the largest tax increase in history will have on future GDP. Since the first of the year, 135 million workers have had a new 2% payroll tax suddenly taken out of their paychecks, which is a considerable amount of discretionary money taken out of the economy. In addition, we have yet to see what kind of an impact Obamacare tax is going to have on the first quarter but my bet is it is going to dent the GDP.
End – Published By Insider Wealth Alert
Tug of War in Gold as Asians Buy Physical and ETF Investors Sell…Outflows from the world’s biggest gold exchange traded fund, the SPDR Gold Trust (ticker: GLD), continued yesterday for the eleventh day running, taking the total volume of gold held to back GLD shares to its lowest level since November 2011. “It is really a tug of war between ETF selling and physical buying right now,” says Yuichi Ikemizu, head of commodity trading, Japan, at Standard Bank. “We have seen quite good physical demand from China and Southeast Asia, but the ETF selling has put a lid on gold prices.”