Melman on Gold & Silver
July 2011 by Leonard MelmanPerhaps the most important phase of our chart analysis work is to find indicators that have proven reliable in the past in terms of providing indications of future market direction. One of our favorites is the “Bank Index,” better known by its trading symbol, BKX.
Perhaps the heart of our pro-gold thesis is this consideration: governments are inherently inefficient, they attempt to provide services far beyond their genuine fiscal ability and these trends result in deficit financing, growing debt levels and ultimate “watering” down of currency values.
…we cannot ignore the fact that several of the most widely-followed and respected economic voices are now raising questions about the potential near-term development of a full-blown market panic.
...the much more important question is this: does this short-term strong rally necessarily portent a genuine turnaround from the metals share bear market that has been ongoing since mid-2011? For a possible answer, we turn to the long-term, five-year XAU chart.
We’ll conclude by digging a bit more into the regulations and pitfalls, and discuss what they are used for, their relationship to gold, and what the future holds.
...rising inflation has been perhaps the greatest single positive influence during past golden bull markets, and the fires of inflation, particularly those driven by rising food prices, do appear to be glowing ever brighter.
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