A look at the Gold and Silver (2023.12.14)
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The indications that the FED will start cutting rates next year excited the markets yesterday afternoon, with the Dow Jones index rising more than 400 points, Gold bouncing from $1975.00 early in the morning to $2022.00 in the late afternoon and silver bouncing from a low near $22.50 in the early morning to $23.80 later in the afternoon.
How realistic is the desire to cut interest rates and what would be the potential outcomes of doing so?
Inflation is by no means under control with numbers around 22% being a realistic estimation and also closer to real life experience. 2% is a FED pipe dream that they hope the gullible public will swallow.
I see real hurt in the future, as they cut rates. Inflation will soar, and stagflation will strangle both suppliers and consumers as the currency loses value.
The situation now is that consumers are in an extremely fragile situation. Jobs are disappearing, smaller companies are going out of business. The average person is having difficulty paying his mortgage or rent on time. Car loans and credit card debt are being paid late or not at all.?
No government wants prices falling. This removes their stealth tax – inflation. So what happens when there is supply, a plethora of cash, and few consumers? Deflation, which works to the advantage of the consumer. Worse is stagflation, a bad deal for everyone except the government. By this measure, I have a suspicion that we will get stagflation.
The movement of the gold and silver prices Wednesday afternoon, gives us an indication as to the potential movement of the precious metals once runaway inflation becomes patent.
BITCOIN AND GOLD
Bitcoin was up 3.1% on the news of the potential rate cuts. This prompts me to hold for a day on the imminent sell signal.
BTC compared to the Nasdaq does not disappoint and continues its correlation.
The bitcoin to gold chart indicated an advantage to bitcoin over gold with an increase of 3.7%.
GOLD AND SILVER STOCKS
The gold to HUI ratio dropped quite substantially Wednesday at 5.79%. This means that the stocks are appreciating at a faster rate than the metal. This is to be expected in a bull market.
GOLD AND SILVER
Gold and silver recovered substantially on Wednesday afternoon after the FOMC meeting as noted above. It appears that the increases are holding. Is this a recovery, have they allowed the price to rise or did the strength of the market overwhelm the riggers? Time will tell. I see a slight pullback to compensate for the quick rise then a continuation of the rise.
On the longer-term charts the jump in prices yesterday seems almost insignificant however the volatility is significant and portends interesting times ahead.
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GOLD TO USD
The past few days we have had gold and the dollar falling together. The interest rate news yesterday pushed the gold price up marginally (in overall terms).
I worry about the ability of the dollar to hold its value, particularly when there is no outside interest in the treasury auctions.
Gold and silver are what they are, so they are the base standard. Prices are relative to the metal’s intrinsic value, manipulation aside.
A LOOK AT THE GOLD AND SILVER CHARTS
Gold’s low of the week was $1,973.00 and the high was $2,040.00, now trading at around $2.037.00.
The low for Silver this week was $22.51 and the high $24.18, trading around $24.07 at present.
Our partner has a stock of gold, silver, and Goldbacks in our vaults available in Panama. Please contact us for more information.
A video by Mike Adams on the Goldbacks.
Well worth a look!
On the Stockcharts.com charts, the blue vertical lines are our proprietary system buy signals and the red vertical lines are system sell signals – for information purposes only
Please contact us to arrange the purchase and storage of your gold and silver requirements in a safe, insured location outside of your jurisdiction.
If you are interested in an overview of Fort Kobbe, you may want to have a look at this video:
This is my interpretation of the market and is not to be taken as financial advice. Before making any buy or sell decisions, I recommend consulting with your professional financial advisor.