Gold and silver have been on the move as we head into the final week of trading in May.
KWN has now released an audio interview!
Silver Catching Up To Gold
May 22 (King World News) – Alasdair Macleod: Gold consolidated recent gains this week, losing $3 from last Friday’s close to trade at $1738 in early European trade this morning. On the same timescale silver was up 50 cents at $17.09, 50 cents below its peak on Wednesday.
As our headline chart shows, silver has almost recovered its loss on the year, having rallied 44% from the March low. Its recent outperformance against gold has reduced the gold/silver ratio to 102, after topping 124. This is our next chart.
So far, the headlines this year have all been about gold, but now attention is embracing silver. The spike up in the gold-silver ratio in the chart above was a clear signal that a major turning point in favour of silver had taken place. That accepted, silver has become short-term overbought.
This is an excuse for the shorts in the bullion banks to knock the price and trigger some stop-losses. But as our next chart, of Comex open interest and the silver price shows, the bulls still have room to run prices much higher.
With open interest currently at only 155,000 contracts, an additional 70,000 contracts would be required to take silver into truly overbought levels. And notice how volatile the price has become on the upside for a relatively small increase in open interest. This is indicative of an illiquid market which in the right conditions can drive the price considerably higher.
The last monetary standard in Europe backed by silver instead of gold was abandoned in 1873, since when the gold/silver ratio has inexorably risen to today’s levels. There is simply no monetary role reflected in the price today. If, for a moment, we can assume the death of fiat and a reintroduction of a gold standard, then it would be sensible to reintroduce the circulation of high-grade silver coins. This was the role fulfilled by Maria Theresa thalers which was everyone’s money in the Middle East until very recently.
If silver is readopted in coinage, then the gold/silver ratio will reflect its monetary status again. So far, almost no one is looking that far ahead, only thinking of fiat inflation and perhaps hedging into gold ETFs. But we can begin to think in terms of developments that will drive the gold price from here, and therefore reconsider silver’s future monetary role.
1. No one seems to be thinking of systemic risk, but every economic downturn puts strains on the banks. The virus shutdown and the liquidity strains which were evident before it indicates a worse position than that of the Lehman crisis is in the making. Mounting systemic risk is bound to be a new factor driving the gold price.
2. Estimates of money-printing are bound to rise, undermining fiat moneys’ purchasing power.
3. The growing possibility that gold will return as money to replace fiat currencies raises the question over silver. Its role in coinage as a subsidiary role to gold will become obvious, by which time the gold/silver ratio should be moving back towards former monetary relationships.
Also…
“The coup of the decade!”
Bryan Slusarchuck: The Fosterville South Exploration (FSXLF:OTC, FSX:TSXV) news that just was just released is very big deal but won’t be understood by the market for a few days in my opinion.
This came together extremely quickly. While some might call it an incredible stroke of luck as to how this transpired, we are calling it an instance of “preparation meeting opportunity”.
Walhalla is a famous goldfield in Australia. The production numbers speak for themselves and in the late 1800s and in the first 10 years or so in the 1900s, total recorded hard gold production from the project was 1,510,309 ounces of gold at a recovered grade of 33.59 g/t gold according to Geovic, the government agency. This significant production of high-grade gold was accomplished despite very limited exploration and very little drilling.
Cohens Reef (where the majority of production on our property came from) is open at depth according to mine records. There are also dozens of completely undrilled high priority exploration targets which we believe are prospective for repeating structures.
The story as to how we acquired this famous project is quite amazing.
Rex Motton, our Chief Operating Officer and co-founder, has spent decades in this mining region. As a teenager, he roamed around the gold belt prospecting and even today, his home is just a short drive to Kirkland Lake Gold’s Fosterville Mine. He developed a very unique database on production and exploration in Victoria, Australia during the 1980s and maintains it to this day.
Rex has been working on staking pieces of ground that are potential strategic fits to our current holdings, which are in the same state. As such, he and our Chairman James Hutton are conversing every evening and going through available land on the government sites as to evaluate fit with our already large land holdings. Recently, they were online and to Rex’s amazement – Walhalla was showing as open. This startled the guys as this is such a premier package and hours prior there was no mention of it on the government site. Rex being online at that time was a spectacular case of being in the right place at the right time and most importantly being one of the few people that when the tenement numbers and descriptions popped up online – HE KNEW EXACTLY WHAT HE WAS LOOKING AT…..IT WAS WALHALLA!
The right place at the right time and knowing exactly what he was looking at because of decades of experience in the district, knowing every tenement number and what it meant in relation to ground.
After a bunch of verification work and making sure this wasn’t ‘too good to be true”, ie….. that we actually got the Wahalla Gold Belt tied up, we just put out the news.
The News Release today has a lot of technical information (which should be read) and background but I wanted you to get you some of the backstory. One of our very key technical team members called this “the coup of the decade”. My job is to make sure, over the coming week, that people understand how important this is. The word is starting to get out and the amount of incoming calls from Australian investors, who know Walhalla, has been exceptional.
Fosterville South has a very strong cash position, we have some of the world’s top mining entrepreneurs as investors and have assembled an amazing land package and have a great team. It’s an exciting time to be a Fosterville South shareholder. Fosterville South, symbol FSX in Canada and FSXLF in the US.
KWN has now released an audio interview!
***To listen to Bill Fleckenstein’s timely KWN audio interview on the gold market and much more click here or on the image below.
This Flashes RED Right Before Stock Market Crashes
***Also Released: This Major Indicator Flashes RED Right Before Stock Market Crashes! CLICK HERE.
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