"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, November 9, 2011

Silver whacked along with Copper as Risk trades are taken back off (AGAIN)

Rollercoaster is too tame of a word to describe the kind of insanity being created in our financial markets by the computer algorithms. Yesterday it was "everyone in; the water's fine". Today is, "Get the hell out; a great white is coming at you".

Tomorrow, it will probably be time for a nice yacht cruise again. Who knows and at this point, why even bother attempting to figure it out.

First the focus was all on Greece. Now it has shifted to Italy. Next it will probably be Spain and if we get to that, it will be the survival of the entire European Monetary Union that will be called into doubt. At some point, if things keep heading in the same direction, with one fire after another popping up, nationalistic tendencies will doom the Euro as nations begin opting out. Either way, history is being made.

The impact of this mess (at least for today) is that Copper and Silver were both spanked as traders are looking for a contagion effect that would slow overall global economic growth. Copper is currently down 3.5% with silver being 2.9% lower.

Gold is getting caught in a tug of war between the commodity index related selling due to risk trade reversals and its role as a safe haven. It is currently trading down but not by all that much considering the carnage occuring in the US equity markets. It is hovering between $1780 and $1790 as I write this.

Interestingly enough, gold IN EURO TERMS, is actually higher today which underscores the fact that the yellow metal is indeed serving as a safe haven. It is currently trading near 1320, a mere 50 euros or so off of its recent all time high.


  1. nice post Dan. I was thinking to myself yesterday that, in reaction to euro worries over summer silver couldn't seem to decide whether it was an industrial or a precious metal, whereas gold acted as a safe haven.

    Now it seems silver has currently decided it is an industrial and gold is caught in 2 minds.

    I smeel uncertainty in the air... I think.

  2. Hi Dan, do you have any insight/opinion on the technical death cross that developed in the silver charts last week? Caution ahead?? At least more than normal? Thank you so much!


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