Melman on Gold & Silver
September 2019 by Leonard Melman
For “hard money” advocates, this has been a remarkable month. Gold has risen by more than $100, silver has begun to surge, and the headlines are full of news items quite capable of raising public concerns to crisis levels.
Perhaps 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.
When we look ahead into 2011, we see continuing troubles such as those listed earlier, which will force the public to question the effectiveness of the entire concept of economic strength and vitality through government interventions. In fact, many of those interventions have been abject failures, and we wonder if or when the public will lose confidence in the entire system.
These moves were the first serious interruption to the bull market, which had not encountered a serious decline since the election of November, 2016. Since general market moves have been one of the most reliable historic indicators of precious metals market moves, we take a close look at these developments.
Our initial thought is simply this: why create these artificial currencies, unbacked by any material wealth, when the two items that worked so well century after century—namely gold and silver—are still fully available?
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