The first week of September was a very good week for precious metals investors, and all indications are that we are looking at more of the same in the weeks ahead.
The pattern in metals prices this week was very similar to last week. We saw caution in the early part of the week, as prudent Bulls took a wait-and-see attitude toward major propaganda events at the end of each week. Last week it was yet more musings from Chairman Ben, and this week it was another totally fraudulent U.S. jobs report.
The hope of the banking cabal in both of these weeks was that they would be able to “spin” the bad news they were trying to hide in a successful enough manner to discourage, or at least confuse the Bulls. The Corporate Media failed. Previously, when B.S. Bernanke indicated he wasn’t planning on more (official) money-printing yet the media was able to spin that message as simply “no more money-printing.”
However with the economic data rapidly deteriorating at the same time that the credibility of the propagandists is rapidly eroding; the media talking-heads are now unable to get the Sheep to swallow the same tripe. Now, when B.S. Bernanke says “no more money-printing yet,” the Bulls and the overall market are intepreting that message as meaning soon.
Similarly, when the crippled U.S. economy wasn’t plummeting lower quite so fast; the Bureau of Labor Statistics was able to fabricate monthly jobs-reports which the Corporate Media could then claim represented “good news”. No longer.
Today, the propaganda machine has two choices. It can present absurd fiction (as with today’s and last month’s U.S. reports), and have the Bulls ignore the propaganda and push prices higher; or, they can produce credible reports (i.e. reports showing job losses in the U.S.) – and then have the Bulls bid-up bullion prices even faster, knowing that much more money-printing is imminent.
We see this New Reality in the precious metals sector reflected with the price action in the weekly chart. The price of gold is set to end the week at approximately $1740/oz; tacking on $50 dollars to last week’s gains – for a very respectable 3% move on the week. However, silver continues to lead the way.
The price of silver is up approximately $2/oz off of last week’s level just above $31.50; more than doubling the weekly move in the gold market. Indeed, with the price of silver up about 3% on the day (and closing in on $34/oz), silver has matched gold’s entire weekly move just on Friday.
Those readers interested in hearing about more speculative views on the market may want to tune-in to an interview of my friend, Bill Murphy of GATA (on RT). Bill is especially bullish on market conditions at the moment, as “his sources” have indicated to him that the physical market (especially for silver) is rapidly tightening up.
As experienced investors know, diminishing (non-existent?) inventories are the Achilles Heel of the banking cabal. It doesn’t matter how much paper the bankers have (or are willing to print). You can’t “leverage” zero in their phony paper markets. So any/every time that the Big Buyers start to suck back most of the visible bullion around the marketplace, prices have nowhere to go but up.
At the same time, we can never forget some basic realities. The entire reason we became precious metals investors in the first place was (for most of us) a fear of some major-and-imminent economic cataclysm (even beyond the financial carnage we’ve already seen). Thus the “bullish conditions” in the sector at the moment directly imply troubled waters ahead for our economies.
Remember that we are always “playing defense.” Buy steadily, but cautiously. Never use margin/leverage. Have a good weekend!