Wednesday, January 30, 2013


This morning's release of GDP data suggested that government spending reductions in military have caused a fall in the growth USA's GDP.  The third quarter had a growth rate of 3.1%, the fourth quarter showed a -0.1% GDP.  Inventories are building, and it looks as though alot of "income" was pulled forward to avoid the fiscal cliff and increasing tax rates.

Despite the stock markets being down just a tad, gold and silver are higher, why?  The reduction reaffirms what we should all know, that the Fed will never exit and cannot remove their stimulative QE which is shuffling $85 Billion monthly of Federal Reserve Notes between different assets like treasuries and MBS.

Intra-day Gold looks to really like the report of GDP contraction as it's ETF proxy GLD is bouncing.

Silver also bounced.  The key for silver will be to clear through the $32.50 area.  Stock charts won't do an intra-day chart for commodities in my set up, so I'll have to post a chart later.

In addition, here is a view of silver that is a 1 year look.

$36.88 seems a long way away from here, but continued real action by the Fed cannot hurt.  If anything, this continues to provide a very solid "fundamental" base from where silver will mount an attack higher.


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