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« Greece where tax-dodging is a national pastime | Main | Silver Wheaton Corporation Call Options Update »
Friday
Feb192010

Silver Hit by a Fed Rate Rise

USD Chart 19 Feb 2010.JPG


The Fed discount rate increase to 0.75% boosted the US Dollar and sent gold and silver heading south for the latter part of the days trading session. Jim Sinclair had the following comments about this move by the Federal Board:

The final Pillar in the gold bull market is a bear market in US Treasuries.
 
The increase in the discount rate to 0.75% is driven by market realities and a desire to be able to sell US Treasuries as foreign demand falls off.
 
The bull market in gold moved from $400 to $887.50 in the 1970s as interest rates rose from 3% to 14 7.8% on Ten Year money.
 
Once again the knee jerk reaction is to sell gold and buy the dollar. Be assured this must happen.
 
Because the final Pillar is falling while Gold is over $1000, you can look at Armstrong's $5000 prediction as a realistic possibility.
 
Stay the course.


Sums it up really, we expect silver and gold to bounce right back and this rate increase is by no means a show stopper.


All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

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Reader Comments (4)

according to my count, bonds will do a new high in price. i don't know how this going to match with FED attempting to rise, but the high is still pending. the logic behind is simple, falling commodity prices will bust bond prices up again they move against each other always. when gold hits 320 i will short the bonds and buy gold.

February 19, 2010 | Unregistered CommenterDi

Thanks for posting the Sinclair comments.

By the way, if anyone wants to hear more from Mr. Gold, Eric King at kingworldnews.com interviews him regularly. Their latest discussion was last week.

One of Sinclair's most salient points in the interview is that the Powerz are painting the tape. Yeah, no kidding. The implication is that you might wanna just ride the trend with your core positions and not rely too much on the charts when making the big decisions.

The Jim Rickards interview from about 3 weeks ago is a must listen. All you really need to know. The view from an insider's insider.

He has Jim Dines on this week.

If you're not taking advantage of this free resource, you're really missing something.

Thanks again guys for all you do. Knowledge is power.

February 19, 2010 | Unregistered Commenterfallingman

Di,

"when gold hits 320"...... you are in for a rather long wait then.

February 20, 2010 | Unregistered CommenterSilver Prices

fallingman,

Max Keiser has been been banging on about painting the tape for a whlie now, the PPT doing its job, maybe.

February 20, 2010 | Unregistered CommenterSilver Prices

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