The Rules Are Changing In Gold And Silver

Possibly title rewrite to the headline below could be "Silver surges to All-Time high on Inflation Hedge, Industry Use, Then Gets Bombed Ahead of Two Day Fed Meeting." The disruption of (paper) control has turned silver into a highly-charged and explosive market. Expect investors to be slow to recognize this subtle change in control. As a result, many will be fleeced by adherence to old trading paradigms (rules and understanding) and general lack of discipline in an increasingly explosive and volatile market.

Headline: Silver Surges to All-Time High on Inflation Hedge, Industry Use

Precious metals have rallied on investor concern that central-bank programs to revive economic growth with record-low interest rates and increased supply of money will reignite inflation and hurt currencies including the dollar. Silver has more than doubled over the past year.

“It’s driven mainly by speculative buying, with investors eyeing the record for a while now,” Yang Shandan, a trader at Cinda Futures Co., said from Zhejiang, China. “We might get a bout of profit-taking now that we’ve pushed passed the high.”

Source: finance.yahoo.com