Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold & Silver Wait Their Turn to Ride the Inflationary Wave

Commodities / Gold and Silver 2021 May 04, 2021 - 01:21 PM GMT

By: MoneyMetals

Commodities

As President Joe Biden pushed massive new spending initiatives in his address before Congress, investors shrugged off rising inflation risk. They pushed the S&P 500 up to a new record close on Thursday.

Gold, meanwhile, continues to be capped under the $1,800 level – at least for the time being.  Silver shows a slight weekly gain and trades a little over $26 per ounce.

As trading closes out for the month of April, precious metals bulls will be hoping for a more fruitful May. Although May is typically a quiet month in markets – not known for producing major crashes or price spikes – it can represent a seasonal turning point.

The old adage, “sell in May and go away” is premised on the stock market entering a seasonally weak period that typically lasts through October. 


Last year was a very abnormal year, of course. And this one looks to be atypical as well.  With all the fiscal and monetary stimulus still making its way through the economy, seasonal trends in markets could be moot.

A major breakout in gold and silver prices could occur at any time. A short squeeze in the futures markets remains a viable scenario given the still ongoing disconnect between tremendously strong demand for physical bullion and paper selling of futures contracts.

Some online silver investing communities are eyeing May 1st for a massive new buying campaign.

How much buying actually materializes remains to be seen. But with mints struggling to keep up with demand and dealer inventories for popular products including Silver Eagles, silver bars, and silver rounds already stretched thin, another buying surge could have an effect on premiums and availability.

Silver and gold markets are waiting their turn to ride the inflationary wave that has hit so many other markets this year.

Palladium and copper prices are soaring to new heights. The housing market is rising at one of its fastest clips on record as lumber prices go through the roof.  Technology companies are grappling with a computer chip shortage. Retailers are struggling with a labor shortage as millions of working-age Americans stay home and collect government benefits.

Just about everywhere you look in the economy, supply chains are strained. The precious metals bullion marketplace is a case in point.

The fact that spot prices haven’t responded in kind over the past several months is a source of frustration for many gold and silver bugs. But it’s also a value opportunity.

Those who can see what’s coming know that the value of the Federal Reserve Note will continue to decline. They know that at some point the richly valued stock market will correct, pushing mainstream investors to seek alternatives. And they won’t be able to keep up with inflation by sitting in cash.
 
The tsunami of deficit spending and currency creation coming out of Washington will only increase going forward. President Biden just proposed trillions in new spending for what he euphemistically calls jobs and infrastructure. In reality, this spending represents and entire re-making of the U.S. economy.

Biden’s far-reaching agenda is leading some to compare him to Franklin Delano Roosevelt. FDR is commonly believed to have pulled the country out of an economic crisis through a range of government programs that fell under the banner of the New Deal.

What’s less commonly understood about FDR is that he radically expanded the power of government to control and destroy wealth. He threatened to pack the Supreme Court until it finally capitulated and stopped striking down his power grabs as unconstitutional.

Now Joe Biden is forming a commission to look into packing the Supreme Court with additional justices that would be more favorable to his agenda.

Back on May 1st, 1933, FDR issued Executive Order 6102 -- making it illegal for members of the general public to own more than five ounces of gold bullion. Back then, the dollar’s value was pegged to gold. The government’s way of creating inflation was to raise the price of gold in terms of dollars and make sure as few people as possible were protected from the devaluation.

Under our current fiat monetary regime, the Biden administration need not bother with gold prohibition. It can spend and borrow at the will of Congress and get the Federal Reserve to produce all the monetary stimulus it desires.

Just like during the days of the classical gold standard, a currency devaluation will ultimately be reflected in the dollar price of gold and silver as well.

The devaluation won’t be formally announced. But when the precious metals are trading at record highs again, it will be obvious to anyone who is paying attention that sound money serves as protection against the government’s steady confiscation of purchasing power.

By Mike Gleason

MoneyMetals.com

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2021 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in