Gold And Silver – Around The FX World In Charts

by Michael Noonan, Edge Trader Plus There has been some discussion about how the Swiss National Bank breakaway from the 1.20 peg to the Euro was a shot to the upside for gold. It appeared to us that the rally may have been sparked a few days ahead of the announcement, and last week’s mostly sideways aftermath was the froth on the rally. It may continue, but the narrower range could just as well lead to a pullback, discussed in last article, Timing Is The Most Important Element, [paragraph above each weekly chart of silver and gold]. It made sense to compare the leading currency charts on the Foreign Exchange markets [FX], to see a) does a correlation exist, and b) take an overview of a market we rarely visit. As the SNB decision to make an apparent[?] independent break from the rest of the central banks, the risk exposure in trading in the bank-[rigged]-dominated FX markets is far greater than any occasional rewards. Here are the weekly gold and silver charts as a comparative reference to the FX charts reviewed: Two bars ago was when the Swiss National Bank [SNB], made its announcement, on the last day of the week, Friday, to cut loose from the 1.20 euro peg. Price had already rallied prior to Friday, and that may be reflective of the “insiders” positioning for the news event. Whether that is true or not does not really matter. More interesting is how last week was a much smaller bar range, after the news was out. It tells us sellers were active keeping buyers from extending the rally any higher. One implication is short-term profit taking into the public buyers who want to get in before they “miss the move.” You will see the difference of last week’s small range for gold v the same week for each fiat currency reviewed. Keep in mind, an ounce of gold is an ounce of gold. It never changes. What does change is the number of fiat units it takes to purchase the same ounce. For example, gold does not go up in value relative to the declining euro, rather it takes more and more euros to purchase one ounce, the ounce of gold being a constant, as is true for silver. On the other hand, the fiat dollar has been rising in imaginary “value,” which means it requires less fiat units to purchase the same ounce of gold. The irony should escape no one that the country with trillion-dollar annual deficits, with a question as to whether any physical gold exists, and no industry from which to grow, aka the United States, is the one country recently stronger than gold. There are few who do not know this has been due to active manipulation of gold for decades. That is soon to change. [Soon is relative.] Continue Reading>>>

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