Silver futures gained 46 cents today to close at $14.09 an ounce. This was a strong move for silver as it broke above solid resistance around $14. Both gold and silver are overbought at this point, but they look strong. I would not short either of these markets – follow the trend.
The door is now wide open for the government to continue spending. When you’re this deep in debt, what’s another trillion? Obama certainly likes playing the role of rock star, but he doesn’t know much about economics – and the markets know it. How do you get people to love you? Spend a lot of money on them! Gold buyers have to love this.
The equity markets are very close to breaking below the November lows. We could have a meltdown this week if they break the lows. Or, stocks are very oversold and we could get a bounce. A meltdown in stocks will likely push gold above $1,000 and the rally could accelerate. A bounce of the lows for stocks could lead to profit taking in gold and silver, but I would treat it as a buying opportunity.