As Inventories At The Comex Fall, Expect Silver to Rise

Silver inventories are running low (a reverse in the buildup) at the Comex warehouse. Reduced inventories are a good overall gauge to measure market price changes within the silver market. It is looking like silver and gold are poised for large upwards moves in price within the near term. Inventories are currently under the 6 month average which is leaning towards the downside.

As silver’s supply dwindles silver becomes that much more theoretically positive. Another important note is that the silver bears have now failed to break through the downside twice. Should there be a move over $29.00 an ounce from a technical perspective (soon to be expected) that would be very bullish. That would be something exciting to look at. From this point a break above $ 37.50 (the next level of resistance) would be the next target for the next major move to the upside. Then silver would be primed to breakout even further.

Here are the reasons; each time that the price of gold has fallen below $1575.00 long tail reversals would show up on candlestick charts. This simply means that the $50.00 spread between $1525.00 and $1575.00 shows a very large demand. In particular, these large demands for gold were noticed during the months of May and June.

With gold’s demand so high, central banks have recorded the largest purchases in a single quarter according to the World Gold Council.

Gold has been more energetic as of late, staying above $1600.00. This is clearly appearing to be a new market bottom for gold. There’s more upside potential or room for upward expansion. Once gold breaks $1800.00 a single move of $150.00 to the upside could occur. However to bring the price over the $1950.00 mark the central bank printing presses will likely need to start run away generating excess market liquidity.

What is clearly of concern to markets and investors alike is; will central banks be willing to turn on the presses full tilt now or in the near future to expand balance sheets as they have in the past? There is a possibility that central banks will not perform as boldly as markets have been anticipating at the start. However as time rolls on, so will the money presses capacity.

For sake of consistency, the Federal Reserve would need an additional $1.2 trillion dollars printed on the next round of QE to match the money supply previously. On the ECB’s side they are looking at an additional $600 billion, which of course are some high expatiations. Will they do it? As these new stimulus packages move forward; expect both gold and silver to reach new highs.

The American Dream – Or is it?

Last week one of our avid CoinBullion readers submitted this video. I took a look at and instantly decided this one needed front row exposure to all my readers. This professionally made and narrated video is part animation part actual footage that simply tells it as it is. Where did money and the banking system come from? Where are we now? Where are we headed? and more. (30 minutes)
The American Dream

Tom Genot –