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On to the business of protecting your wealth…
There are so many fundamental reasons for gold and silver to start running up. We’ve all heard that due to the decline in the price of silver and gold that it is now running at or below the average cash cost to mine. Some say it’s $1,100, some say $1,700, regardless of the true discovery price, it’s safe to say that with inflation in energy costs we are right around that figure.
Another issue is that back in 2008 & 2009 we have seen all these “We Buy Gold” stores popping up all over the place which has helped inventories increase, but with the recent price drops, nobody is in a rush to sell their unwanted scrap gold jewelry which is tightening supplies even more. According to Bloomberg Gold Scrap Supply to Drop Up to 25% as Lower Prices Deter Sales.
The other two important facts that may help gold & silver climb is that last week, the FED suggested that Easy Money Policy is here for the foreseeable future and the US economy would tank without it.
Flipping the coin for a minute… Lets discuss corporate earnings – I wouldn’t go popping the cork just yet. It appears that some earnings are actually beating Wall Street estimates.
That’s great news! The problem is that over the past 3 years specifically, the corporate earnings estimates were adjusted significantly lower due to the global economic downturn, so to beat the estimates that were adjusted so much lower is no cause for celebration.
A more important question would be…why is it that so far all the positive earnings have been coming from big banks and not the “main street” business who need it most?
Lastly, Watching the inventories leaving the COMEX lately is wildly bullish for the metals investor and should be of significance going forward if the inventories are not replaced – But where will the gold & silver come from?
Allow me to assist you in understanding these ever changing and challenging financial markets and more importantly, how you can profit on the upside potential and protect yourself from the downside risks….
Now, onto the breaking news that matters…
Sunken Treasure Reminds Silver Investors about Long-Term Value – It’s been a brutal year for precious metals. Despite logging twelve consecutive annual gains, gold and silver are among the worst performing assets this year. Many analysts have lowered price targets, and proclaimed once again that the great bull market is dead. However, precious metals are still highly sought after, even at three miles below the ocean’s surface.
Silver is not only known for its historic monetary value, but also for its industrial usage. Almost all electronics are configured with silver. The precious metal is used in everything from automobiles to alternative energy needs. According to The Silver Institute, over 36 million ounces of silver are used annually in automobiles.
In addition, silver paste is used in 90 percent of all crystalline silicon photovoltaic cells, which are the most common type of solar cell. Over 100 million ounces of silver are projected to be used on these solar cells by 2015. The white metal has also been used in medicinal and preservative purposes around the world for generations.
Gold To Surge $180 & Silver Set For Massive 35% Advance – With trading in the $1,350 area, and silver rebounding near $20.50, today top Citi analyst Tom Fitzpatrick sent KWN three fantastic charts covering both the gold and silver markets, and told KWN that both markets are set to have massive price surges from current levels. We are increasingly of the view that both gold and silver have bottomed.
We have always viewed the down-move in both gold and silver as a correction, albeit a severe one, but a correction nonetheless. This will now provide the platform for the metals to push higher in their secular bull markets.
Gold’s Rally Is No Head Fake – Gold prices are rallying at just the right time, as the precious metal is entering a seasonally-strong period that technicians say could lift the metal more than 10% over the next few months.
Even those chart-watchers who remain bearish on gold over the much longer term see potential for further short-term gains. Mark Newton, chief technical analyst at Greywolf Execution Partners, said the rally “is the beginning of a [longer-term] bottoming process.” While there could be some choppiness over the short term, “I don’t see [the strength] ending anytime soon,” he said.
As the chart below shows, gold has broken above a minor downtrend line starting at the late-March highs, that currently extends to just below $1300, technicians say, which suggests a new short-term uptrend has begun. In addition, prices have cleared the top of a month-long consolidation range, also about $1,300, which indicates to chart watchers that a short-term bottom has been seen.
Jim Sinclair: Comex Must Change Its Delivery Mechanism Soon – The cause of Monday’s spectacular rise in the gold price is the reality that with Friday continues large drops in the Comex warehouse gold inventory. No cogent argument can be formed against the reality that because of the continued fall in gold inventory that within in 90 days or sooner the Comex must change its delivery mechanism.
Gold rose today because those knowledgeable know the inevitability of the changing of the Comex contract, as it is today which calls for settlement in gold between contracting parties. There is no question this is the emancipation of physical gold from the fraud of no gold, paper gold. The emancipation will cause physical gold exchanges to take birth and to be the discovery mechanism for the price of gold. This is the end of the ability to use paper gold future contracts as a mechanism to make
the gold price sing and dance at the will of the manipulators. There is no reason why gold cannot move up hundreds of dollars a day when the Comex changes their spot contract settlement, as they must, as they will, very soon.
BIG WITHDRAWALS OF GOLD & SILVER FROM THE COMEX – No Demand For Physical Metal? The depletion of Comex Gold Warehouse stocks continues with another big withdrawal today. Furthermore, this was met with a huge draw-down of silver stocks as well. In less than one month, a staggering 640,000 ounces of gold have been removed from the Comex. It’s not often we have large withdrawals of both Gold and Silver from the Comex on the same day. However, if we look at the Silver Comex excel table below, we see that 2.2 million were withdrawn today:
Dennis Gartman: Gold is going ‘several hundred dollars higher’ – I continue to be bullish of gold and i think gold’s going higher. I’m not a gold bug. Anybody that hears me knows I’m not a gold bug. Gold nothing more than another currency but I think in the circumstances that prevail, gold wants to go higher and broke up to the upside yesterday and I’m extremely bullish of gold in yen terms and especially bullish of gold in euro terms. We are quite bullish in gold.
I think gold wants to go higher and has been moving higher for the past several weeks and yesterday was a very impressive day when gold broke above 1307 and broke above 1315 and broke above 1315 and gap to the upside and given none of that back. I find that impressive.