Understanding the Rising Prices of Gold and Silver
Notable Rise of Silver and the FOMC Minutes
In this discussion, Peter discusses the significant increase of silver above $30 per ounce and the recent Federal Open Market Committee (FOMC) minutes. The minutes suggest that rate cuts may be postponed further. He also mentions the SchiffGold Silver Breakout Sale, celebrating the metal's much-anticipated breakout.
Establishing a New Support Level
Silver's rise to $32.50 on Monday has set a new support level at $30 per ounce. Despite a substantial pullback from the Monday price, Peter believes that $30 is to silver what $2,000 was to gold. Even though the price occasionally dips below $2,000, it never stays there for long and quickly rebounds.
Market Misinterpretation of Fed's Signals
Despite the Fed's uncertainty about rate cuts, the market mistakenly sold off gold and silver in response. Peter explains that traders who are selling these metals do not understand the reason for their price increase. Even if the Fed doesn't cut rates, gold and silver prices should skyrocket because the rates are too low.
Fed's Misjudgment on Rate Hikes
The Fed claims to be ready to increase rates if needed, but Peter argues that they are failing to recognize that rate hikes are long overdue. He believes that the current data already supports a rate hike, and the fact that the Fed is ignoring this data proves that they will never increase rates.
Misunderstanding of Economic Growth
Fed officials believe that economic growth leads to inflation, which Peter argues is a fundamental misunderstanding of how growth works. He explains that economic growth should lower prices as the economy produces more goods and services. Hence, an increase in the supply of goods and services should make them less expensive, not more.
History of the U.S. Government and Silver
Peter concludes by recounting the history of the U.S. government removing silver from coins in the 1960s. He argues that the government went to great lengths to hide this fact, misleading citizens into believing that dimes and quarters were still made out of silver. He calls this act a fraud and a counterfeit.
Recent Surge in Copper Price
In other news, the price of copper has recently skyrocketed. Peter's blog offers an analysis of copper's all-time high price.
Final Thoughts
The dynamics of gold and silver prices are complex and influenced by various factors, including the actions of the Federal Reserve and economic growth. It's crucial for traders and investors to understand these dynamics to make informed decisions. What are your thoughts on this matter? Do you agree with Peter's analysis? Feel free to share this article with your friends and discuss it further. You can also sign up for the Daily Briefing, which is delivered every day at 6 pm.
