Gold and silver were basically up a little most of the day, primarily on a weaker dollar and not so good home sales report that came in less than expected. The stock market took a hit slightly too. But then gold and silver faltered a bit and gold ended in the red and silver about flat. Meanwhile mining stocks got hammered. In the trading room over at Seeking Alpha we did take some profit from both JNUG and JDST both today. If you haven’t checked it out, please do so here knowing we offer a full money back guarantee now. Current subscribers will be notified when they can transition or if they choose to now we will be making an announcement on what can be done to accommodate you soon. Here is the link to check out the service: http://seekingalpha.com/pages/premium_authors?c=ETFs
When you see the dollar move up as much as it did since last Thursday, a little consolidation is in order. But take note that today gold fell with the dollar falling. I am very confident of the dollar moving higher and very confident of gold moving lower. This day to day stuff doesn’t really concern me.
Interest rates came back down today and for long term readers they know I am calling for lower rates ahead. The stock market is just experiencing normal Fed volatility.
I have written about how I think China is a bubble and am addressing this in my next book. Their banking system has not yet experienced the shadow lurking in the background where there are no counterparties to transactions. It’s a mess and Dr. Doom, Marc Faber, addresses it here in a video from Bloomberg; China Has Credit Bubble of Epic Proportions
Excerpt; And what we have had in China, and this investors should realize, is a credit bubble of epic proportions. I have read economic history. I’ve never seen credit as a percent of the economy growing as fast as in China in the last seven years.
If you listen to Marc Faber, he is a pretty good speaker. He’s written a few books and is overall well liked in the industry.
How does this affect gold? Chinese citizens are a big buyer of gold and they also produce a lot of gold. We know from our own experience here what happened to gold when our own credit bubble burst. Gold got hit hard and if China cracks up, this can take gold down to the levels I have been calling for as there would at the same time be a rush to the perceived safety of the U.S. dollar.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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