Time the dip, be right, sit tight, don't let the bugs bite:
alt-market.com
This article, originally title "Sit Tight, Be Right: Time the Dip Too Perfectly, And You Might Go Home Empty Handed" was first published at LibertyCPM.com
”Sit tight and be right,” as Jesse Livermore says.. That’s the best advice one could heed when it comes to precious metals investing. As so many have seen, the markets are terribly volatile. Their corrections, while oftentimes resembling those dips experienced in a traditional bull market, sometimes take on the look of an all-out market collapse. Why?
Because money itself is at stake. Money has been the foundation of our society, and particularly in our case, “The American Century.” Without US Dollar world reserve status, the second half of “The American Century” would have unfolded much differently. There’s no way the U.S. taxpayer alone could have rebuilt Europe after World War II, there’s no way the country could have financed wars after the turn of the century. The built-in demand for dollars has sustained the American Empire. From oil to gold, other nations have been forced to buy dollars before staple commodities priced in dollars.
That’s why we see policies to keep the dollar strong against commodities. It’s to maintain the way things have been as long as possible. The precious metals bull market has unfolded steadily, for that reason, as currencies have devalued at a pre-determined pace along a decade-long timeline.
But, in the meantime, the daily noise continues.
The precious metals remain quiet this morning as investors wait for an end of the week EU summit. Right now, gold and silver prices are being weighed upon by a soft Indian economy and soft Rupee price. For example, whereas 46 rupees bought one US Dollar a year ago, today it takes 57. This raises gold and silver prices, which is priced in US dollars on world markets, much higher for Indians.
Demand in India has also fallen off, down about 30%-40% compared to a year ago. Presumably, similar has happened as gold and silver have appeared extremely volatile in the past six months to a year.
During the last year, the amount of silver it takes to buy just one ounce of gold has fallen from 30 ounces for every 1 ounce, to 57 ounces for 1 ounce. Some say this signifies an excellent opportunity to trade one’s gold for silver. Such a trick can be taken as a way of teasing dividends out of one’s physical holdings.
Recently, market dynamics have changed, however, as not only did gold and silver diverge from stocks, but so too did their a change in the behavior of gold in terms of Rupee’s and Dollars; that is, while usually when gold goes down in dollars, it goes up in rupees, yesterday it went down in both, perhaps precipating increased global demand.
Still, the dollar is being kept artificially high. What this does is inspire confidence in the US dollar and depress commodity prices. This is the theme for now for the precious metals market. But, on the side of these metals, particularly silver, is that they are rare. And, for that reason, to accumulate the metals while they are still “readily” available on the market, should be the first goal of a precious metals investor before timing dips perfectly.
After all, time the dip too perfectly, and physical might be out months for delivery – if it can be procured at all.
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