Friday in the US (Saturday NZT) saw a large fall in both metals. Gold fell about 2% in US dollars and silver over 4%. However the levels we’ve mentioned in the past couple of weeks for both gold and silver seem to be holding at the moment.
In NZ dollars with the Kiwi dollar remaining strong this amounted to a fall for gold of $38.59 per ounce down to $2038.89. And silver was lower by almost $50 per kilo to $1208.16. Since Monday prices have bounced back up though.
Looking at the charts we can see both the yellow and the white metal dipped down below their 200 day moving averages, but only briefly so far anyway. They both also touched oversold levels on the daily RSI indicator of 30. If we had to guess (and a guess is all it would be!), we’d say that we may well have seen the bottom in this correction in the past few days.
So given that we are now back down around where gold and silver broke out in August from the descending triangle patterns they were in, this likely does present another bite at the cherry for those that missed out on the earlier lows in July.
You probably haven’t been able to help noticing that today is the big day in the US, where the punters decide who will win President Idol 2012. There have been many questions floating around about how who wins may affect precious metals prices.
We’ve even seen veteran fund manager and gold bull John Hathaway of Tocqueville Asset Management say a Republican victory in the race for the White House is the biggest threat to gold prices.
“What would be a real surprise is if Romney wins the election with more of a mandate than the close polls suggest. This could then signal that people really want to get something decisively done and then we could see gold fall further.” However even he says it won’t make much difference in the long run. Source.
We’d have to agree and so are paying no real heed to the US elections. We are so far down the track now that little can be done to change course without great hardship and of course neither candidate is discussing any hard calls.
Of more significance we reckon is something that we’ve seen little mention of lately, which is that the US government is about to hit its debt limit… yet again.
As of Monday week ago “the U.S. Treasury was $235 billion below the $16.4 trillion statutory ceiling on the amount it can borrow”.Source.
With the usual bit of accounting jiggery pokery they are meant to be able to stay afloat until February so not long after the election to convince Congress to raise the limit for the 75th time since 1962.
Just over a year ago when the ceiling was last raised we published a chart from Tyler Durden on Zero Hedge. He extrapolated out that gold could rise to $1950 by the end of 2011 based on the rise in the ceiling then of another $2.5 trillion using to past increases.
You may recall that gold actually reached $1900 just a month later before the big correction ensured. So you could argue gold still has some catching up to do on the previous debt increase and there is now another one only months away!
Of course his premise makes good sense when you think about it. The gold price merely represents the amount of fiat currency in existence. And as we’ve discussed many times, and in our free ecourse money today is in fact debt that is never extinguished just passed from one person or entity to the next. So more debt equals more money equals a higher gold price.
On the topic of debt but back here in NZ, all the talk of housing un-affordability in the past week got us to thinking that most all discussions of this fail to even to consider the true cause of the vast increase in un-affordability of housing. Debt of course. So we jotted down our thoughts on the subject earlier in the week..
The other article we’ve posted this week is from our favourite Billionaire Hugo Salinas Price. We make a habit of following what he has to say and think it’s worth sharing with you too.
So as already mentioned we’re sticking our necks out by saying that we think we are very close to a bottom in gold and silver here. Of course our opinion is only worth what you pay for it and given that it’s free… well…. But if your own analysis leads you to think now is a good buying zone then get in touch:
1. Email: firstname.lastname@example.org
2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
3. or Online order form with indicative pricing
Have a golden week!
This Weeks Articles:
|Jim Rickards: Buy Gold While it’s on Sale|
|2012-10-30 10:47:05-04This week: Gold and Silver Very Near 200 Day MA’s Report From the Gold Symposium: What is the End Game? Gold is Now Australia’s 2nd Most Valuable Export to China New RBNZ Head First Interest Rate Manipulation Announcement Jim Rickards: Buy Gold While it’s on Sale We had a busy week last week with 2 […]
|Housing Un-affordability: It’s Not Supply, It’s the Debt Stupid!|
|2012-11-04 22:27:41-05The topic du jour in the media this week has been housing affordability or rather unaffordability in New Zealand and especially Auckland. So we couldn’t resist but throw our 2 cents worth into the mix. In case you’d missed it the government has announced they will work to make more land available in Auckland and […]
|On the Use of Gold Coins as Money|
|2012-11-05 18:38:14-05Hugo Salinas Price is undoubtedly one of the good guys. Unlike other billionaires such as Warren Buffett, Charlie Munger and Bill Gates who in recent months have publicly denigrated gold, Salinas Price devotes his time to educating not just the public but mexican congress members on the role of silver in particular. Below is his […]
We are not financial advisors, accountants or lawyers. Any information we provide is not intended as investment or financial advice. It is merely information based upon our own experiences. The information we discuss is of a general nature and should merely be used as a place to start your own research and you definitely should conduct your own due diligence. You should seek professional investment or financial advice before making any decisions.