Wednesday, May 2, 2012


Hate to beat a dead horse, but...

Morning Snapshot

by Peter A. Grant
May 01, AM
(from --

Gold has been somewhat choppy again this morning; coming in higher initially on a weaker dollar and then selling off on the April ISM beat, only to recover into stable territory. The yellow metal remains firmly entrenched within the broad range defined by the 1920.50 high from September 2011 and the 1522.40 low from December. Yet as my colleagues and I discussed in the latest USAGOLD VideoRoundtable, there may be reason to believe that the protracted period of consolidation may not last through the summer.

Persistent expectations that the Fed will launch additional quantitative measures may ultimately prove to be the catalyst for such a breakout. These expectations have served to put a floor under the market, protecting the low end the range. With the number of double-dipping economies in Europe on the rise, it may be just a matter of time before the entire EU is back in recession. This risks pulling the US back into recession as well, and last week's US Q1 GDP miss may be a harbinger of just such a reality.

Japan remains a mess with their economy continuing to contract. The BoJ announced additional asset purchases late last week, because the past 20-years of ZIRP and QE have proven so successful (not!) that they may as well keep going to the same well. On top of that, concerns about a hard-landing in China linger, despite some indications to the contrary.

Even commodity based economies are starting to feel the pinch. Canadian GDP for February came in at a weaker than expected -0.2%, dashing hopes for an imminent BoC rate hike. The Reserve Bank of Australia cut interest rates a larger than expected 50 bps today on rising risks to growth.

More debt. More ZIRP. More QE. More currency printing. And I'm not just talking about here in the US. I'm talking a global reality check. Everything that has taken gold from just over $300 a decade ago to more than $1900 last September is still very much going on, and may be on the verge of accelerating dramatically in the coming months. There is every reason to believe that the present consolidation is simply a pause withing the long-term trend.



  1. And all this is NOT good. Not good at all.

  2. What gets me, my friend, is not many 'get it.' I've read many scary reports today. Times, are a changing....

  3. The next nose dive is almost upon us. I've been catching many of those same reports. Wish I'd had the where withal to buy previous medals ten years ago.

    1. sorry meant "precious" metals. Thats what I get for posting from my smart phone in the middle of the night.

    2. I understand, Matt. I've been a buyer of precious metals (small amounts) for the last thirty years. A few years ago I decided I had enough silver and began to make monthly gold buys. Again, usually one coin per month as I saved the cash. I buy online from Gainesville coins. Florida company, good prices. Fractional bullion pieces are what I like the best, but it doesn't hurt to grab an ounce coin or two. Just play the dips.

  4. I'm not into this to make a profit, only as a hedge against inflation. But I don't won't to lose money either.

    Here's my question, and I figure there may be several others who may be wondering this, so I'll ask here

    On the off chance that the economy recovers and the price of, let's say, silver starts dropping, and I decide to sell before the price drops below what I purchased it for (remember I bought at an almost 10 year high), will I be able to sell it for what it's worth, or is it going to be like what you have to do when buying from someone that just walks in off the street, offer them less than current value in order that you can turn a profit?

    I'm thinking you're going to tell me the second choice here, but wanted to be sure.

  5. No, you'll sell, always, at 'spot price.' The current bid price for silver at market value. You might lose on the commission. Remember, as I'm sure you know, there is a bid and ask price. We always pay a commission on purchases, most of the time, about 9 percent, or less. I buy for long term. I don't play the markets. I do buy on dips. If silver or gold begins a long decline tomorrow I standby to buy. There is always a resistance point on the downswing, find it and plan your purchases around it. Lately for gold its been $1,300 or so. If silver drops below thirty bucks I'll buy a little at a time. If nothing else, Matt, my wife and grandchildren will be happy campers when I die. Then again I bought my first pieces of silver at below three dollars an ounce, but 'junk' or 90 percent silver coins and bars. Thanks, Bubba.