The USD index (DXY) closed @ 86.65 on Friday. The last time we saw the index this high was back around JUN-2010 when it hit 86.50 area. So let's compare PM prices use the gold-silver index XAU as a proxy. Values & dates are approximate as I'm just eyeballing them off a chart.
On Friday, the XAU closed at 78.42 but back in JUNE-2010 it was in the 170 area at nearly the same value on the DXY! In other words, PM prices today are roughly 46% lower today compared to the same dollar index value back in mid-2010! Now consider these three cases:
1) In JUNE-2012, the DXY touched 84 before pulling back,the corresponding XAU reading was around 155.
2) In MAY-2013, DXY touched 84 again, XAU was just over 100.
3) The DXY spiked to 84 again around JULY-2013, this time XAU pulled back to the 90 area.
In all three of these cases, the DXY rally stalled around the 84 area before sharply pulling back. I'm beginning to question this notion that PM prices are tightly-linked to the USD when, in fact, XAU has been dropping steadily relative to the currency since 2010.
I think this story goes beyond just PMs, look at prices of key industrial metals & ores. Gold peaked to the $1900 area in late 2010 after a six year climb starting $450 in late 2004. From 2004 up until the crash of 2008-2009, the economy was booming, you'd think PM prices would've remained flat as everyone was putting their money into stocks.
I believe China along with other so-called emerging economies are the culprits. Copper prices remained steady ( averaged around $2,000 USD / metric ton) from the early 80's until 2004, by 2007 it was $8,000 and peaked at nearly $10,000 in 2011. Today it stands at $6,725, roughly a 33% drop from the 2011 high. We see pretty much the same story with the other metals, some fared better than others.
Gold went from $1,900 to $1,200 over the same period for a 37% drop. That's no coincidence. This isn't just about the "strength" of the USD, IMO.
SLW's Board of Director, Eduardo Luna has been CEO of Rochester Resources since 2008. Read about the progress he has made with this tiny gold/silver mining company by checking out the interesting post "As Promised" located on the Stockhouse Bulletin Board for Rochester Resources, (V.RCT). This post documents RCT's mill-expansion effort since 2006. It includes production numbers from RCT's most recent SEDAR report filled on September 25, 2014.
The media will never report the labor participation rate because it hurts obama - especially before an election. You can rest assure in a republican if office the headlines today would have all been about the labor participation rate. More people are quiting work and becoming part of the obama welfare nation.
Look at breakdown of today's "great" job numbers.
Manufacturing, Transportation & Warehousing show "little change"
Workers forced into part-time work but trying to find full-time positions = 7.1M, "little changed"
Unemployed people still actively looking for work over past 12 mo. = "unchanged" since last year.
Avg. workweek for production worker = DOWN 0.1 hrs. to 33.7 hrs.
Of the 284,000 new jobs created in Sept., vast majority were in various service sectors. Some sectors such a professional and business services or mgmt. & tech. consulting may pay well but most do not. For example: employment services, retail, food & bev, are typically very low paying; combined they account for 89,000 of the new jobs added (31.3%). Most of the new higher-paying jobs added (28.5%) are attributed to the professional & business services sector.
Then we have the problem of the lowest labor participation rate since 1978 -- 62.7%. A lot of "experts" like to attribute this to the growing number of Baby Boomer retirees, but a closer look at the data shows that's really not the case. Bottom line: more people are struggling to enter the workforce than there are people leaving due to retirement. True, the participation rate peeked in 2000 and started a slow decline until 2008; after that, however, it fell off the cliff and continues to plummet -- there aren't THAT many Boomers who suddenly decided to retire. Remember: the WWII generation started retiring en masse in the 70's yet the labor participation rate continued its steady rise until 2000.
The USD may have had a nice up-tick today, but the jobs numbers had little to do with it, IMO.
WOW!!!! $4 silver and $50 gold.... Call me when it gets there... In the mean time BUY some Physical silver..... Big Sale Going On!!!!!! And if it gets to $4 ....... Well like the Man said... HOW Sweet It Is....... BUY PHYSICAL TODAY!!! BUY SOME TOMORROW ... BUY SOME NEXT WEEK KEEP BUYING!!!!!!........ PHYSICAL PHYSICAL.... PHYSICAL GLTA...
... so appropriate action is taken to penalize them? Court judgments should include the death
It is becoming abundantly clear that these individuals have become the eternal keepers of the alchemy of turning paper into gold. They will not be satisfied until they have destroyed any meaningful relationship between commerce and mediums of exchange with intrinsic value. This cannot continue unless people are satisfied with being subjected to a process of gradual plunder, also known as “inflation” by the alchemists.
The continued progress of stock market indices is nothing but a chart painting process instigated by the Federal Reserve System. While volume has been decreasing the averages continue higher defying all logic and economic realities. Incidentally the McClellan Oscillator Summation Index has gone negative, which indicates the major averages are not being driven by free market action.
What’s next? Are the central banks going to take over all precious metals mining companies? It sure appears that way and is a logical assumption. After all who owns the central banks? They will soon have it all and the average Joe will not have a pot to #$%$ in.
don't do that. Trade precious metals until there is a reason to go long. right now with the strong US dollar there isn;t one. The only exception would be if the stocks have been beaten to a pulp and are trading near historic lows, which isnt the case yet either.
That's not really advice from kitco...SLW and silver are both trading below 20 RSI which may represent a good time to buy, but it's never that simple. That being said, I am a first-time owner of SLW as of today. I can hold as long as it takes. GLTA
For now, the bears are in control of the trend. But, all trends must take a break, pause, rest and correct. Watch silver momentum. A rise above 30% on the RSI would be a positive near term signal and watch the 10-day moving average. A close above that zone would suggest the bulls are gaining a toehold and a counter-trend correction could be starting.
Until that occurs, don't stand in the way of the trend.
I never realized that until now. Adjusting for the devalued dollar I'd say SLW should be at least 10 times that price right now. Silver prices are disconnected from reality. Spare me the posts that tell me I am. ;-)
what did I tell you guys weeks ago, now it has happened..SLW is at a yearly low and heading lower...this is something that you pumpers would not believe but now I have made you believe by the actual fact of reality...get off the couch and head for the exit...what a disaster for the longs.