Gold and Silver ended Friday on a down note with both of the medals shedding about 4% for the week. The FTSE lost 4 weeks of gains on Friday. Gold fell through the $1180 support level to close at about $1167. The catalyst for lower prices was the stronger than expected February US jobs report which added 295,000 new jobs for the month.
The entire precious metals complex was down on Friday, along with sharply lower prices for crude oil and most of the base metals as well. The dollar surged by about 1.6% on Friday sending the euro/dollar exchange rate to 1.0850, which is the lowest level since 2003.
The big problem Gold and Silver have right now is the expectation from traders and investors that the Federal Reserve will be raising interest rates soon. As we have said before most traders are ignoring the fundamentals and trading exclusively off of what they anticipate will be the next move by the Central Banks.
The next key support levels for Gold come in at $1160, then $1130. Should Gold not hold $1130 it could fall to $1050. It is very challenging to predict where Gold and Silver prices will go in the short term. It is possible that heavy buying could come in from Asia in the next couple weeks to create a floor for Gold between $1130-$1160.
Keep in mind that the Dollar strength will likely be short lived. There is much uncertainty in the global economy and traders and investors still view the US Dollar as a safe haven. However, Central Banks do not have the tools to engineer a sustained recovery. Signs are everywhere that the currency markets are broken.
Change in the Monetary System
There was a recent article on Sprott Global that highlighted some comments from geo-political expert Richard Maybury, who has been predicting black swan events for the last 20 years. When talking about global events he said “everybody knows there’s something seriously wrong but they don’t know what is really happening.” This is a profound statement.
He also discusses the monetary system that has been in place since the 1940’s.
“The United Nations, NATO, the Bretton Woods monetary system, the World Bank, and the International Monetary Fund were all created in the 1940’s according to blueprints that were approved in Washington.”
He believes this world order may be coming to an end. We have posted a link to the article for those of you who wish to read it in its entirety. The bottom line is that most currencies carry risk right now. This why the precious metals still represent the best value.
Keep the declines in Gold and Silver prices in perspective. Everyone has to decide what is best for their particular set of circumstances. When given the choice between saving in currency vs. saving in the precious metals, our choice is physical Gold and Silver.