"Trader Dan" Norcini is one of the most respected commodities players around. Here's a snippet from today's post:
Keep in mind that I am speaking as a trader looking at a short term price chart. Longer term I believe many investors are looking for a dip in the gold price to secure more of the metal. The entire problem in the markets right now is that investors world wide, but particularly investors putting money into the Western economies, have LOST CONFIDENCE in the monetary authorities of those nations and in their political leaders. In effect, the markets have voted and that vote says, "WE DO NOT TRUST THEM TO BE ABLE TO PROPERLY DEAL WITH THE ROOT CAUSES OF THE PROBLEMS THAT ARE AFFLICTING THE NATION". Gold in that sense is the "ANTI-GOVERNMENT" vote as there is no government behind the metal. That will keep buyers interested in gold even in the midst of a money flow issue.
Silver was mauled without mercy as it met with the fate of copper. This is to be expected during times of risk aversion. For all the silver bulls out there, please understand this basic principle - Silver will not outperform gold during a period of risk aversion. Period - Comex silver stocks do not matter. All that matters is that risk trades get yanked off and silver gets hit harder than gold because even though it has an historic role as a safe haven metal, it cannot shed its industrial metal role completely during such times. The Gold/Silver ratio will therefore move in the favor of gold during periods of risk aversion when fear trades are the rule. When the risk trades go back on and traders feel very comfortable taking risk, then silver will outperform gold to the upside.
Definitely worth reading the rest:
http://traderdannorcini.blogspot.com/2011/08/extreme-volatility-in-gold-as-market.html
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