YESTERDAY IN GOLD AND SILVER / CASEY RESEARCH ( VERY HIGHLY RECOMMENDED READING )

Yesterday in Gold and Silver

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Apr 22

 

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The gold price didn't do much of anything yesterday and...looking at the Kitco chart below...it's obvious that the gold price hasn't done very much of anything during the last three trading days, despite the rather precipitous decline in the U.S. dollar during that time period.
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The silver graph below just shows how much silver has become a different animal than gold. The dollar graduations on the Kitco graph below tells all. From silver's low on this chart, to its close on Thursday, silver has risen 8.4%...compared to gold's 1.3% over the same time period. This has nothing to do with the dollar. It's a short-covering rally, pure and simple...with Thursday's price action being more of the same. Volume, once again, was very heavy.
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The dollar continued its decline on Thursday, reaching its nadir of 73.75 around 11:00 a.m. in London...which is 6:00 a.m. Eastern time. From there, the dollar recovered to 74.10 by the close of Thursday trading in New York. It's obvious from the precious metal charts, that the dollar was not a factor in yesterday's price action.


And not that I want to put too fine a point on this, but the gold price has barely reacted at all to the big decline in the U.S. dollar during the entire week just past.
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The gold stocks were rather jumpy in early trading yesterday...but then settled down somewhat, with the HUI finishing up an even 1% on the day. The silver stocks did somewhat better, but it was very uneven...and you'd never guess by looking at the action of either the gold or silver stocks, that we're at record highs in the gold price...along with a silver price that's screaming to the upside by at least a dollar a day.
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As I said, the silver stocks did better, but prices were mixed. The top-callers are still yelling their lungs out...and most of the sheeple are doing their bidding by selling and waiting for the correction...which is the reason the silver stocks are not screaming to new highs. But if it does come...how deep will it be and how long it will last...will be the question of the day.


As Ted Butler has mentioned for weeks now, this silver rally is a short-covering rally. Open interest is actually declining because the bullion banks are covering their short positions...it's not caused by new speculative longs coming into the market and bidding the price up. The dynamics are totally different now.


Here's the 1-year silver chart. If you want to bet against this trend...please be my guest. Now that the silver price is doing what it's doing...volatility, both up and down, is the name of the game from this point onwards. As Richard Russell says, any dips should be bought.
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