It is time to review the situation re gold and silver. Are we in fact at the beginning of a steep rise (as experts on KWN predict), or are we at the beginning of a steep drop as Larry predicts? Fresh from missing the Summer rally in gold, Larry now predicts a sharp pullback in the DOW to 9,000 and a pullback in gold to maybe as low as 1,100. So, it is time to look at the charts again.
The top chart shows the weekly price of gold. In line with previous predictions of a faster rise, weekly gold rose at the steepest rate since 2008. The MACD hit a low and has entered into an up phase and it, too, predicts a fast rise ahead.
Along with gold, silver began to rise as well. Since, silver rises faster than gold, this shows up in the gold to silver ration falling again (second graph down). This is again an indication that both gold and silver are rising again.
The next graph is the actual silver price. Note that it has kissed the 50 DMA, so further confirmation on the upside is required.
The final graph is the weekly silver price. It, too, shows a breakout on the upside. One of my gurus has issued a BUY rec on silver.
The DOW has also skyrocketed, so Larry's prediction of DOW 9,000 does not look so good. You may say that the big day Thursday was on the false premise that the European crisis has been fixed, but classical use of charting data ignores economic data, it only treats technical data.
Coupled with the sudden drop in the US Dollar, we can confidently say that the financial world has entered a time of inflationary expectations. Precious metals have risen and oil also. The Dollar has dropped and the DOW stays elevated. The latest round of meetings in Europe confirmed a printing of at least 1T Euros and the rollover of Italy's bonds next year may require the printing of possibly as much as 2.5 T Euros. The Markets are again in sync.
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