Commodity Trade Mantra

Silver Breakout Confirms that Gold and Silver Prepared to Move a Lot Higher

Silver Breakout Confirms that Gold and Silver Prepared to Move a Lot Higher

Silver Breakout Confirms that Gold and Silver Prepared to Move a Lot Higher

If you’ve been waiting to buy gold and silver the wait is over.

In his most recent Gold Videocast, Peter Schiff looks at how the price of silver has just surged to a high it hasn’t seen since January of last year. In the aftermath of Brexit, Peter takes this as a good sign that the prices of both gold and silver are about to really break out and begin moving up in significant bursts. Now that gold is holding steady above $1,300 an ounce, investors who have been waiting on the sidelines to buy should consider acting soon – before sellers start hoarding their metals as the prices move up.

Peter’s forecast is based less on the United Kingdom leaving the European Union, and more on what is going to happen in America. Peter reiterated what he said in his recent appearance on CNBC’s Trading Nations: the Brexit basically gave Janet Yellen a get out of jail free card:

I believe the Federal Reserve is going to use the turmoil in the markets that followed that vote as the excuse it’s been waiting for not only not to raise rates, but to cut rates and to launch QE4. In fact, that is the main reason, I believe, that the markets have recovered somewhat from their Brexit related losses. Because if you look at the financial markets, they are now pricing in for the first time a higher probability that the next move by the Federal Reserve will be to cut rates, not to raise them.”

It’s not just about Fed policy. The underlying economic conditions are weak. Peter pointed out that the so-called recovery is worse than most recessions. That puts us in a very precarious position when the next recession hits. This bodes well for gold and silver, but Peter said you shouldn’t wait:

There isn’t a lot of time left for people to buy gold and silver while there are still people foolish enough to sell it.”

Highlights from the videocast:

“We now have confirmation from both metals that the markets are prepared to move a lot higher, the most recent catalyst being the market turmoil that followed the British vote to leave the European Union.”

“But what I believe is really behind the metals’ rise is not what’s happening in Europe, but what I believe is going to be happening here in the United States. I believe the Federal Reserve is going to use the turmoil in the markets that followed that vote as the excuse it’s been waiting for not only not to raise rates, but to cut rates and to launch QE4. In fact, that is the main reason, I believe, that the markets have recovered somewhat from their Brexit related losses. Because if you look at the financial markets, they are now pricing in for the first time a higher probability that the next move by the Federal Reserve will be to cut rates, not to raise them.”

“My position was they never planned on following through with the rate hikes. That was just talk. They had to pretend that the economy was strong enough to withstand higher rates, but then not actually raise sates and prove the reverse. I said what they needed was a face-saving excuse to be able to turn on the spigots again without having to acknowledge the real reason for doing so. Now they can pretend that the economy was sound, but now we just have these external events we have to deal with.”

“In the meantime, the price of gold and silver has risen even against a backdrop of a strong dollar, or at least a dollar that is less weak than other fiat currencies.”

“This rally of the dollar is not sustainable, because what happened in Britain, and more importantly, the reaction that we’re going to get from Washington, is very dollar bearish.”

“As we continue to get more weak economic data that continues to surprise all the bulls, who are expecting strong data, it’s not going to be long before the talk of rate hikes is really replaced, first by the talk of rate cuts, and then by actual cuts. And of course, since there’s not a lot of room for the Fed to cut rates because they never really raised them, the real monetary stimulus is going to come in an enormous round of quantitative easing.”

“In fact, this is the first recovery ever to be worse than the recession. We are at a very precarious position now as we enter the next recession, which I believe will be far worse than the Great Recession that everybody credits the Fed for getting us out of. Well, they’ve gotten us into something much worse than that.”

“Now that you have the breakout in the price of gold and silver…I think more and more people are going to connect these rather obvious dots and they’re going to start buying.”

“I think that we’re going to regain all that lost ground in a relatively short period of time, and then gold and silver are both going to go on to make new highs.”

“The reason there was such a violent reaction in the financial markets to Brexit wasn’t because Brexit was so terrible. It just shows you how precarious the world financial system is. It’s all based upon these props of cheap money and central banking. It all based on hype, and hope, and confidence. And when something shakes the confidence, you see the immediate result.”

“The central bankers are going to do everything they can to keep this bubble from deflating, and that means more money-printing, not only here but around the world.”

“There isn’t a lot of time left for people to buy gold and silver while there are still people foolish enough to sell it.”

“If you’ve been waiting, the wait is over. And I wouldn’t be waiting for lower prices, because I doubt we’re going to see them. The prices are low enough. Just buy them.”

 

 

 

Courtesy: Samuel Bryan 

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