Silver/Gold rally while the dollar gets dumped.

[theo]

Gold is up about 1 1/2% (above 1400 for the first time in a while) while silver is up 2% to almost 23. Also I believe this is the dollar's second down day in a row. Is this a short-term correction or the beginning of something big?

http://www.zerohedge.com/news/2013-05-3 ... t-rotation

[Country]

Watch the UST - 10 year. As of right now, it is yielding 2.13%. Much higher than a couple months ago. It appears that (1) the FED is slowing its purchases, or (2) Wall Street is front running the FED and getting out of the UST before the FED slows its purchases. This appears to cause weakness in the USD, and resumed strength in PMs. Maybe it's reallocation time for the boys...

[shinnosuke]

While we know there is no good financial news in the US, Europe, or Japan, the mainstream media continues (despite the govt abuse of AP and others) to be the administration lapdog, repeating all the President's fabrications.

Got food storage to go with those metals?

[InfleXion]

Watch the UST - 10 year. As of right now, it is yielding 2.13%. Much higher than a couple months ago. It appears that (1) the FED is slowing its purchases, or (2) Wall Street is front running the FED and getting out of the UST before the FED slows its purchases. This appears to cause weakness in the USD, and resumed strength in PMs. Maybe it's reallocation time for the boys...

It could also be China, Japan, or other sovereigns selling off US treasuries. Yes the Fed is buying roughly 90% of newly issued debt, but other nations still have existing positions they may be offloading. Considering China is still breaking records for gold imports I wouldn't be surprised at all if they were stepping up the currency war.

[AlleyAlchemy]

Difficult markets to read -- or, maybe they've always been that way -- lots of moving parts, seen & unseen.

U.S. Dollar Weakness Likely Tied To Month-End Rebalancing – Barclays --> http://www.kitco.com/reports/kitcoNewsM ... 30530.html

"With month-end around the corner and global markets having largely underperformed the U.S., it is likely that rebalancing of currency hedges will be (U.S. dollar) negative. We remain U.S. (dollar) bullish over the medium term, however, and would view any dips as buying opportunities" ...

[Jonflyfish]

Also I believe this is the dollar's second down day in a row. Is this a short-term correction or the beginning of something big?

Short-term correction. Something big has already been underway. USD has been strengthening against JPY carry, EUR mess, AUD and CAD commodity currencies. More impulses in that direction likely.

Cheers!

[theo]

What goes up. . .

Both Ag and Au are down pretty significantly. Silver is actually lower than yesterday's open and gold is back down below 1400. We'll see if this continues.

My take is the longer that silver stays below say 23 the more likely it will test Inflexion's $21 level; then if it breaks through that we'll be on to Rodebaughland at $18.

[Thogey]

Can someone explain this:

The demand for PMs as wealth preservation is global. Japan has pretty much announced their plan to reflate the yen.

There are what? 300 million Japanese, Wouldn't you think more than a few of them are interested in buying a little gold for a hedge against inflation.

Why would that demand not trump the dollar rally against the yen as far as gold and silver prices go?

[JJM]

The citizenry of Japan are a small piece of the global FOREX pie, having little impact globally.

Demand for physical gold is INTENSE all over Asia, I've read reports that the price for AGE's in Japan is WAY over spot price currently, and supply is pretty much non-existent.

The average Japanese citizen isn't aware of the B-I-N section here. Even if they are/were, there are language and trust barriers inherent. I'm sure if you were APMEX (or any other large gold seller) operating on eBay, you would be selling a BUNCH of gold to buyers such as "flighttoord", "flighttoTHIS" and "flighttoTHAT" - companies in the U.S. whose sole purpose is to purchase items off the U.S. eBay site & ship them to Japan by the container full.

[InfleXion]

What goes up. . .

Both Ag and Au are down pretty significantly. Silver is actually lower than yesterday's open and gold is back down below 1400. We'll see if this continues.

My take is the longer that silver stays below say 23 the more likely it will test Inflexion's $21 level; then if it breaks through that we'll be on to Rodebaughland at $18.

We have seen sub-21 already but it was a dip spike. I consider that valid for a test although that doesn't mean it won't test it again. It seems the physical market is catching back up with current prices so I wouldn't be surprised if we went lower from here. The paper pushers have shown they have no qualms in doing so. Ultimately the lower it goes the higher it will eventually go as any drop in prices tightens up the physical market further.

[shinnosuke]

Can someone explain this:

The demand for PMs as wealth preservation is global. Japan has pretty much announced their plan to reflate the yen.

There are what? 300 million Japanese, Wouldn't you think more than a few of them are interested in buying a little gold for a hedge against inflation.

Why would that demand not trump the dollar rally against the yen as far as gold and silver prices go?

There are 128 million Japanese. They are told to, and for the most part do, believe what their leaders tell them. Let's see...I can make a play on words like the English sheeple.

hito = person
hitsuji = sheep
Therefore, hitsujito = sheeple in Japanese. All rights reserved. Copyright 2013.

Case in point, the last time my wife went home to visit her parents, I sent her with a roll of Franklin halves. Her parents received them with amused puzzlement. What is our crazy American son-in-law thinking about now? When I spoke to them on the phone during my wife's visit, they offered the obligatory "thanks" at which the Japanese excel so much. I said, "Hang on to them in case something happens," hoping that they'd say, "Something happens? Like what?" which I could use a springboard to get them to think about converting some of their cash into metals. They didn't bite. So they will suffer when the yen rockets into hyper-inflation and I have told my wife that I am prepared for her parents to come live with us...when the time comes.

Look at this zerohedge page that they copied from the Japanese Ministry of Finance's website. http://www.zerohedge.com/news/2013-05-2 ... discipline

That's some good insight into the mentality.

Gold is very expensive now in Japan because of the recent debasement of the yen. That makes it harder for the average Taro & Akiko to wade into the market.

[Jonflyfish]

Also I believe this is the dollar's second down day in a row. Is this a short-term correction or the beginning of something big?

Short-term correction. Something big has already been underway. USD has been strengthening against JPY carry, EUR mess, AUD and CAD commodity currencies. More impulses in that direction likely.

Cheers!

Confirmed. More strong USD impulse waves higher- not so good for commodity prices...
Cheers!

[shinnosuke]

Also I believe this is the dollar's second down day in a row. Is this a short-term correction or the beginning of something big?

Short-term correction. Something big has already been underway. USD has been strengthening against JPY carry, EUR mess, AUD and CAD commodity currencies. More impulses in that direction likely.

Cheers!

Confirmed. More strong USD impulse waves higher- not so good for commodity prices...
Cheers!

Thanks for the confirmation, and don't be a stranger 'round these parts when you know more.

And what's not so good for commodity prices is good for my deep larder.

[Country]

USD impulse wave LOWER today - SIGNIFICANTLY LOWER!! Computerized allocations are going to shift gears if this continues. It might be nice to see some significant closing of the short PM futures as a result of FEAR and HERD instincts. It might be very interesting soon... Of course, I could be wrong...

[Jonflyfish]

Many speak of the dollar "getting dumped" etc. and have been beating that drum for several weeks now in order to give the impression that it has been devastated. However, the trend is your friend as seen on the daily chart. Where the trend ends, nobody knows. Big money doesn't know, but they stick with what's working until it doesn't. The past few days the USD has corrected but the trend has thus far stayed intact. Will it reverse or continue? Doesn't matter until the structure changes. Keep the winners and sell the losers. Only losers average losers. Interesting that PM's didn't react with any conviction oppositely. They too have their own trends...



Cheers!

[stlouiscoin]

this wasn't a correction, as in returning to "what the price should be", but rather pms being worth the same, and the dollar worth less. if 20x=1, and x=1, then suddenly x<1, now 20 must go up to equal the 1.

[Jonflyfish]

this wasn't a correction, as in returning to "what the price should be", but rather pms being worth the same, and the dollar worth less. if 20x=1, and x=1, then suddenly x<1, now 20 must go up to equal the 1.

Interesting math.
If 22x=1 yesterday but used to be 49x = 1 and today it is < 22x=1 then the USD is "What it should be" because it is what it is.

Cheers!