Above is Kitco live 24 hour Silver chart
Gold has broke above 1450 and touched a new all time high of 1457 and change. Silver got above 39.00, the highest it has been in 31 years.
The S&P500 today started strong but ended flat on the day.
The divergence between metals and stock markets I believe will happen within the year. I expect markets to roll over while metals continue showing strength. They have been so closely correlated as QE1 and QE2 worked their magic. However, the increase in metals was I believe from the debasement of the USD. As the stocks market realizes QE3 might not come right away, stocks will likely roll over. However, Inflation expectations are increases and I expect more demand for the inflation hedge that gold and silver provide. Ben also mentioned in his speech that he will tolerate "transitory" inflation. This is a path to 5-10% inflation unchecked. If expectations embed a Volcker style hike may be necessary to halt inflation. We will see what the summer holds for us. I think 100-130 oil will be with us for a while.
No comments:
Post a Comment