There are five highly positive fundamental developments for gold and silver. The question is why gold and silver do not run in spite of these five positive developments? The answer is shown on the charts and explained later in this article.
Click here to see a big more legible short-term chart.
Click here to see a big more legible long-term chart.
The Government Shutdown And The Debt Ceiling
The U. S. government has been shutdown for over a week. There is no point in regurgitating the details as the media is full of the perspectives of both sides. Irrespective of one’s political ideology, it is clear that there is instability in the largest economy in the world.
More ominous is October 17, 2013 deadline for the debt ceiling. Instead of finding the solution, both Democrats and Republicans are blaming each other. Even the threat of a default should be positive for gold and silver but gold and silver do not run.
For thousands of years, gold and silver have been safe havens at times of instability. There is no denying that the government shutdown, the looming debt ceiling deadline and rancor in Washington has caused instability. But gold and silver do not run.
Further, the debt ceiling highlights $16 trillion worth of debt that the U. S. has incurred. There is no end in sight of the U. S. continuing to increase its debt load. One way to handle this debt burden is to monetize the debt by cheapening the dollar. This alone should be enough for gold and silver to run, but they don’t.
Yellen Nomination
Obama is set to nominate Janet Yellen as the Fed Chair. She will be the first woman Fed Chair and the most powerful woman in the world. The Senate is likely to confirm her…Read more at KITCO.
