Disliked{quote} Yep! I'm still shooting for $1,050 or so in the coming months...Ignored
First, central bank money-printing has lost its impact on the markets. Why? Very simply put, there's too much bad debt floating around the globe and there's simply no way central bank money-printing can offset it.
Second, austerity measures in Europe and the United States are also overpowering the inflationary impact of money-printing.
Third, and most importantly in my view, the Cyprus confiscation of uninsured depositor money has completely turned the world upside down. Money is no longer safe in a bank in Europe.
From a cyclical and technical perspective, it's just not time yet for their interim bear markets to come to an end. Nor is it time for the next phase of their long-term bull markets to reemerge.
Deflation has the upper hand right now. Wholesale prices are plunging, as are nearly all measures of inflation. Most importantly, however, is the severe rot that is infecting Europe. France is now back in recession. Spain is still in trouble. So is Italy. Even Germany is starting to wallow now.
On top of it all are the insane politicians in Europe who insist on raising taxes and implementing austerity measures. Even worse, there's now increasing talk that the "bail-in" that occurred in Cyprus — the confiscation of uninsured depositors' money — will be used as a solution when banks in other European countries fail.
All this, and more, is sending European money into hiding. But not much of it is finding its way into gold and silver. Instead, most of that money is going largely into cash, which is boosting the value of the U.S. dollar quite dramatically, putting additional downside pressure on the precious metals.
The wicked and aggressive devaluation of the Japanese yen is setting off a massive stampede OUT of gold and into cash and other assets.
Why are the Japanese dumping gold, especially when their currency is being devalued? It's simple. The fall in the Japanese yen caused the price of gold in yen to spike sharply higher. So Japanese investors are cashing in their profits. In addition, Japanese investors want to either spend their gold proceeds, or move it into other assets. They need liquidity. And holding on to gold is not a liquid situation. It's very easy to understand. This sort of thing is also happening in Europe, where gold demand is also down. Why? Because if you have money in a bank, Cyprus has proven that European leaders will stop at nothing to try to solve Europe's crisis, even if it means confiscating your money from your bank.
On the downside, I repeat the key support levels you should be watching:
$1,298.70
$1,244.90
$1,160.90
$1,028.40
$ 993.90
