Ben Bernanke boosts gold and silver prices

Print This Post | Topic: Other, Silver — September 21st, 2010

Ben Bernanke mentioned the ‘Deflation’ word today and his willingness to make the necessary accommodations to avoid it, causing the US Dollar to fall dramatically, giving both gold and silver prices a boost. The thought had occurred to us that just maybe he is a closet precious metals bug, well, it is the silly season!

In an attempt to regain our senses we will take a quick look at the chart and as we can see the USD was already struggling before todays events gave it a shove south. The technical indicators are in the oversold zone and we suspect could stay there for some time. With the prospect of the printing presses being cranked up again the debasement of the American currency continues rendering the dollar weaker with every new dollar that gets created.

Checking the air waves we have this snippet from The Guardian:

The US central bank made no shift in monetary policy at the end of a one-day meeting, but analysts and traders recognized in Bernanke’s statement greater concern about the sluggish pace of economic growth and uncomfortably low inflation than when the Fed last met in August.

“The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Fed said in a statement.

Over at Bloomberg they had this to say:

The National Bureau of Economic Research yesterday said the worst recession since the 1930s ended in June 2009. Unemployment in the U.S. may stay above pre-recession levels until at least 2013, the Organization for Economic Cooperation and Development said in a report the same day.

Gross domestic product expanded at a 1.6 percent annual rate in the second quarter, and St. Louis forecasting firm Macroeconomic Advisers estimates growth is tracking at a 1.4 percent annual rate for the third quarter.

Bernanke told central bankers gathered in Jackson Hole, Wyoming, on Aug. 27 that “preconditions for a pickup in growth in 2011” appear to be in place. Even so, policy makers are “prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.”

Well its as good as baked into the cake that we are in for another round of ‘Quantitative Easing’ as they like to call it, makes them sound as though they are the really bright ones who ought to be listened to. Ignore em and listen to gold and silver, their movements are telling you everything that you need to know.

Get a position and hold on tight, expect a rough ride but keep hold of your precious metal investments, sell the cat if push comes to shove, sorry cat lovers.

Over in our options trading den they have updated the chart to show all the closed trades as of today, so you can see exactly how it is going, please click this link.