Increased Volatility In Gold and Silver

Posted: December 8, 2010 in Current Events, Gold, Precious Metals, Silver

There are a couple of rumors floating around which are putting pressure on gold and silver.

1. Recurring rumors of a large commodity fund taking profits ahead of the year-end

2. China may raise interest rates over the weekend

As gold and silver continue this bull run there will be rumors and some will come true putting pressure on gold and silver short-term.  China just announced they have increased their gold imports five fold to protect themselves against inflation.  I think there is more to this story.  If I were China I would start rumors or raise rates in hopes gold and silver drop all the while converting my dollar liabilities to gold and other commodities.  I believe this is happening now.  Drops in these metals will be met with demand.  The physical market will disconnect from the paper market at some point.

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