In line with all financial markets from Wednesday on silver and gold fell as disappointment that no Quantitative Easing was going to come from the Fed. But more than that, as Mr. B. Bernanke warned, the Eurozone crisis could spill over into the U.S.
With warning that time is running out to save the euro, the 'black beast' of deflation is rearing its ugly head again. We are seeing shades of the 'credit crunch' but far larger and markets are starting to behave the same way. But this time we all know what is likely to happen. Silver fell then too, but after a while rebounded when other markets didn't. We expect the same to happen now but far faster. The rebound, you will remember preceded gold climbing to new heights and silver recovering back to the mid $30 levels.
But patience and a steady determination is needed now as the 'herd' stampedes.
We are seeing macro funds buying the gold market and the Silver Trust shares, while other investors are selling to cover their losses in other markets.
But silver is moving as a monetary metal alongside gold, even though at institutional level it is not considered a monetary metal. We expect this to continue.
The biggest threat to global markets at the moment is that 'Black Hole' of deflation, which as new money is printed, will suck in more and more. This will be 'silver positive!
- Julian Phillips, SilverForecaster.com