The Phaserl


Gold & Silver Price Under Pressure, US Dollar Perceived Safe Haven

from Gold Silver Worlds:

As a consequence of the 5-year monetary stimulus from the US central bank, the US dollar recently came out as the safe haven currency. Undoubtedly, that was one of the key objectives of the central bank. Add to it the fact that gold has lost its “safe haven” appeal, and you have an outcome that probably is the best of all worlds, at least from a central banking perspective. The message that this trends carries – at least for now – is that the US dollar deserves to be the world reserve currency; it is the strongest of all currencies.

Whether this trend is based on strength of the US dollar, based on a strengthening economy, or whether it is the result of the weaking of all other currencies, does not matter for now. Lately, the disconnect between economic conditions, stock market and value of the US dollar has become too blatant. From the latest GEAB report:

There is no shortage of indices that point to a worsening of the economy. Europe is already in recession. Exports from China, often considered “the workshop of the world”, are falling heavily (see chart below) and the benchmark signals are contracting or slowing down dangerously with, additionally, a major credit bubble.

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1 comment to Gold & Silver Price Under Pressure, US Dollar Perceived Safe Haven

  • Frank Zak

    $20.00 is an incredibly important
    support level for silver. Most all knowledgeable
    traders would have covered shorts as silver approached it.
    I mentioned this when silver was $35.

    The problem is silver follows gold.

    Gold support is $1,000

    Most all knowledgeable traders know there is a 75%
    chance gold will hit $1,000.

    So, silver would have to take a very large move up
    from here before the next leg down, to maintain $20.00,
    when gold hits $1,000.

    Its not impossible, just highly unlikely.

    If gold and silver would put in an outside week
    to the upside, it would help here.

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