Gold and Silver: When Fundamentals Fail And Charts Prevail

gold and silverMichael Noonan: There is a decline in the number of reads in our articles that do not provide a fully developed "fundamental" story about why gold and silver should be much higher in price, [but are not]. Relying upon charts to more accurately capture the developing "story" does not capture the imagination of as many readers, for whatever reason. We attribute this to Confirmation Bias where a reader wants to read an article that confirms his/her beliefs. The accuracy/validity/truth may or may not be true, but is satisfies an emotional need for affirmation.

The true story of gold and silver is a simple one. There is a recognized and acknowledged shortage of supply in opposition to the greatest demand for both precious metals, for at least in recent memory, if not all time. Current prices are in total disregard to the fixed law of Supply v Demand, or perhaps more accurately stated, in total defiance of that law. It is the most reliable of truths that when demand is in far excess of supply, price goes higher.

This has not been the case for precious metals for the past two years, as central banks have been actively suppressing prices in order to preserve their fiat currencies, particularly the Federal Reserve's "dollar." In our last article, Cognitive Disconnect Between Physical and Paper, we covered several aspects that addressed political/central banker motives that account for why gold and silver are not rising in value.

Read more on http://etfdailynews.com/2013/11/18/gold-and-silver-when-fundamentals-fail-and-charts-prevail/