The topic of the week in the precious metals market: "What's driving gold and silver prices higher and higher? Should I sell and take profits?"
Today's chart is the driving force behind the hot topic. It's the past 12 months of trading in the U.S. dollar.
Last week, Ben Bernanke told America he's ready to do anything in his power to keep the U.S. economy inching along. This means he'll do anything to support asset prices like stocks and housing… even print up fresh money.
The market is reacting to Ben's idea by flushing the dollar. As you can see from today's chart, the dollar has been clobbered to its lowest low in more than seven months. Real "hard money" assets like gold and silver are soaring to their highest levels in decades as a result.
That covers the first part of our topic. And the second? Sure… gold and silver are overbought in the short term. They're due for a "relief" correction. But our view is, take a page from China's playbook and use any weakness in the precious metals to buy more.
No comments:
Post a Comment