UPDATED: Things may get worse. Much worse. Silver just ran into a major problem, and if gold is to follow suit, there’s no way to say it nicely: Gold may start puking all the way down to…
Silver just tapped it’s 200-day moving average:
They may even rub it in our faces by tapping the 200-day again, then busting through it right down to the 50-day. That’s how cocky they feel and how confident they are in their control of these markets, which for now, seems to be the case. Will they smash it down to the 50-day? That would put silver at or below $16.92. But hey, the lower the blows, the more ounces we can get for our fiat.
Gold is not faring well right now either:
Silver has been under-performing gold. Perhaps we all became too complacent ourselves after heeding the merits of being on guard, because said differently, gold has been outperforming silver. But look on that daily. The BIG moves have come from silver, either in one day or over just a few days, and they have also all been to the downside too.
Therefore, if we are going to be under constant attack for the next 48+ hours, which I expect we will, if the metals will finally converge on the charts, it’s more likely not that silver has risen but because gold has fallen, and we would be looking at a price in the mid-$1250s at that point.
At risk of taking some heat – it wouldn’t be that bad to see gold catch-down to silver. Yes, we have all been waiting for silver to catch-up to gold in performance, but we’re not the ones who paint the charts.
We know that silver is gold on steroids. Silver is gold on steroids because it is a smaller market, and as such moves in or out of the metal are exaggerated compared to gold. That is to say, generally, as the gold price goes up, the silver price goes up faster, and as the gold price goes down, the silver price goes down further.
So if gold is going to catch down to silver, when this current round of smashings is over, silver can launch first and appropriately so. THAT alone could get people really excited if silver takes off and out-performs gold, as is most common. It looks like that will play out, but only as gold comes down some first. Maybe gold won’t have to fall all the way down to silver, because silver could turn first and then take the lead on gold. That would be the best thing to root for right now, but we are not the ones who choose the time and place of our smashings.
Until they have taken it too far, and until that paradigm shift, we just have to sit back and take it.
Here’s the outlook for the entire week below. We didn’t talk about Dow or S&P because, well, we already have enough indigestion as it is:
Last night did not go that well as we saw constant pressure on the precious metals throughout the night:
Constant, steady pressure to the downside. This is in light of “Rocket Man” comments, many Floridians still without power as 3 new threats are swarming in the Atlantic, Venezuela pricing oil in yuan, bitcoin erratically, Syria heating up again, and any number of “pick your poison” doubleplusbad fundamental news.
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