Bearish on silver and Gold
Hey guys,
Hope everyone New years was great. We are looking at the daily chart of silver which is looking like it is forming a correction pattern. With it lack luster performance last year i dont see it changing that soon with sellers coming in every pop it had. I wanted to also debunk some Myth of the market that people dont seem to pay attention too, and that is Silver/Gold are hedges against inflation and the market going down. This couldn't be more false, gold and silver are hedges to Monetary policy, its the fed reaction to these events that shoot gold and silver up not the event itself.
Lets take the inflation of the 1970s-1980s yes gold was tied down but when it was released from the gold standard in 1972 it went up on anticipation of what the fed chair was going to do then corrected in 1976 right back to the same price it was in 1972 then raised again in anticipation until Paul Volcker did his tightening then rip up as money flooded the stock market. Gold and silver usually tell you the direction the market is about to go but do not go opposite to the market. COVID is the perfect example both gold and the stock market went down together and both rebounded together on the exact same day but gold and silver will out perform in anticipation of the effect of the monetary policy applied in the crisis. So if you believe the market will correct with the tightening then you must look back at silver and see that it will fall too.
timing it near the bottom will be a much more rewarding venture then buying it now.
Hope everyone New years was great. We are looking at the daily chart of silver which is looking like it is forming a correction pattern. With it lack luster performance last year i dont see it changing that soon with sellers coming in every pop it had. I wanted to also debunk some Myth of the market that people dont seem to pay attention too, and that is Silver/Gold are hedges against inflation and the market going down. This couldn't be more false, gold and silver are hedges to Monetary policy, its the fed reaction to these events that shoot gold and silver up not the event itself.
Lets take the inflation of the 1970s-1980s yes gold was tied down but when it was released from the gold standard in 1972 it went up on anticipation of what the fed chair was going to do then corrected in 1976 right back to the same price it was in 1972 then raised again in anticipation until Paul Volcker did his tightening then rip up as money flooded the stock market. Gold and silver usually tell you the direction the market is about to go but do not go opposite to the market. COVID is the perfect example both gold and the stock market went down together and both rebounded together on the exact same day but gold and silver will out perform in anticipation of the effect of the monetary policy applied in the crisis. So if you believe the market will correct with the tightening then you must look back at silver and see that it will fall too.
timing it near the bottom will be a much more rewarding venture then buying it now.
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