The last 48 hours have seen spectacular and sudden moves in the precious metals realm following news of Russia's incursion into Ukraine and proves just how volatile moves in gold and silver markets can be. On February 23, gold started out the gate just below $1,900 USD per ounce. Just after 8 am, gold crossed above $1,900 and near midnight, was up about $50 to $1,945.
Then came the real fireworks. Yesterday, around 6 am gold peak at $1,975 and from there, in dramatic fashion, suffered a 'controlled' demolition down to $1,880 before reversing course later in the afternoon to settle back above $1,900. Below is a chart from yesterday, courtesy of kitco.com.
An article published at zerohedge explained there were a record amount of puts and short coverings, to the tune of a record trillion dollars a day. Markets opened 2.5% lower (Feb. 24) but in remarkable fashion, the S&P 500 went from a low of 4114 to a high of 4294, staging a 4% intraday rally. The article also makes points as to why the rally may be short lived. Click here to read the article.
As of writing, gold is just under the $1,900 mark but for how long? First, we had the breakdown of Kazakhstan at the very start of the new year, followed by the Freedom Convoy in Canada, which led to Trudeau invoking the Emergencies Act, only to revoke it a few days ago. Now, we have Russia and Ukraine, soon to be overshadowed by the USA's own Freedom Convoy which 'as we speak' is heading to D.C., just in time for Biden's first State of The Union address.
I do expect gold to go back up very soon. I see $2,200 on the horizon. It might come down some more but with all the truckers not delivering as they normally would and with all the ships backed up along the coasts, a deep recession is brewing. The question now is, will the FED raise interest rates or not, next month? The 'rumor' is they are planning for four quick, successive rate hikes. I even caught wind of at least seven planned rate hikes by year end.
Silver too, has similar moves in the last 2 days. More than $1.50 move in one day for silver is highly unusual. I've seen $1 moves but this is something else. The precious metals experts I have been following for years have been saying all along to expect extreme daily volatile moves in gold and silver as the $%&T hits the fan and we're starting to witness this now.
As ALL commodities have shot up in dollar price in the last 12 months and inflation is at 40 year (actually 75 year) highs, silver remains severely depressed and undervalued. I certainly don't mind. It just gives us silver bugs yet another opportunity to buy the dip. Mind you, you're going to start hearing the new words, 'unaffordium' and 'unobtainium' become common words to explain the scarcity and difficulty of obtaining silver as we move forward. As of writing, silver is back at the $24 mark (see below).
Is $30 silver on the horizon? Well, we'll see how Biden handles his own Freedom Convoy protest. Will he try and invoke an 'emergency' like Trudeau did? If he does, expect a bank run in the USA. One thing for sure, Trudeau isn't smiling anymore in his press conferences. Biden isn't going to be smiling anymore either, I suspect. While D.C. is tied down, it may encourage China to invade Taiwan. Next week will be hot, indeed!
Russia, on the other hand, despite so-called severe sanctions, is downplaying its incursion into Ukraine following Ukrainian leader (and comedian) Zelensky's willingness for talks with Russia. Russia has confirmed a high-level delegation to discuss the 'neutral status' of Ukraine. Things might cool off over there, after all. I won't mention the several bio-labs run by the US DOD over in Ukraine. That's up to CNN to report on that!
Consider diversifying your portfolio by adding precious metals!
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