Silver Soars; Investors flee from Negative Interest Rates

April 19^th, 2016 will indeed be remembered as a historic day. 

The Chinese have announced their involvement in precious metals markets.  This has caused dramatic spikes in silver and gold in USD terms.  Silver has reached new highs for 2016, touching $17/oz., while gold appears to be holding above the important $1250 mark (4/20/16 Update – gold has since fallen just below that mark).   

Here’s what Zerohedge had to say about today’s moves:

As we reported earlier, the buying accelerated this morning, when ongoing demand for the precious metal pushed it to fresh 10 month highs above $17/ounce. One reason suggested for the buying came from Reuters, which said "that there is heavy buying in silver in Shanghai, and that has triggered buying in gold as well," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

This may just be the beginning as technicians are finally starting to pay attention.

The timing of these moves was not made at random by the Chinese.    Once again the East has proven to be three steps ahead of the West in the game of geo-political chess.

Note that no matter what the motivations behind this move, or whether or not the rally sustains itself, technical levels have been breached in both SLV and GLD.  Therefore, one can expect this to be the beginning of a bigger move, as Zerohedge states.

Indeed, when looking at the 5-year chart for Silver, it seems obvious the downward trend has been broken.  And if you zoom-in and look at the 1-year or the 3-month…WOW.

Just today, CNBC covered “Silver’s Sterling Rally”, and even they pointed out the brilliance of the charts.  This has been one of the most long-awaited moves in history.  And it has only just begun.

For years, silver was so undervalued that demand kept building and building.  As I’ve noted before, in the first quarter of 2016 alone, more American Silver Eagle coins for investment purposes were sold than during the entire year of 1996.

As central bankers take us deeper into the black-hole oblivion of negative interest rates, more and more people will rush into silver and gold to avoid such insanity.

 

The system has begun to come unhinged at the seams.  A global avalanche of epic proportions has been initiated, and nothing will stop it.  One can either stick one’s head in the snow and say it’s not happening, or prepare to jiu-jitsu that monstrous momentum into something beneficial.    

What choice will you make?  Feel free to leave your thoughts in a comment below, and share this post on social media.