Poised for a breakthrough...but

I proved short-selling on the ICBC portal this week which lifted my spirits. I need never fear a decline again. Making money with a negative balance sheet is an added bonus for sure. It was right under my nose all the time but I failed to really test it before.
Gold came out of the barriers again and was gaining on the silver bullet just once. When it hit 1660 levels it all but trotted the race from there. On the other side of the track, 'hi ho' silver finally took out 31 and advanced to 31.50 in a flash. Platinum took ages to join the flurry at the party and this is all took place on a rising dollar. Remember my comment earlier this week; when 'gold' comes alongside the dollar and increases we will see a return to a relative 'safe-haven' and a spike up. Well, it did!

I am declaring 'Safe-Haven' has been realized tonight and we could see strong sentiment returning in PMs. That does not mean perpetual strength but we have it for now. In fact, in my opinion, gold and silver have been displaying that quality of strength since just before Christmas when the 'doomsayers' had written both gold and silver down.

It will be interesting to see what transpires from the possible predicaments following the round of important meetings (FOMC) this coming week. I am personally expecting nothing good from the 'chopper' meeting. I can't imagine 'Ben the Bank' would sprout off 'QE3' announcements of any description, but...then...who knows? They want growth it seems but at whose expense this time! The most likely outcome could be an announcement to issue some debt swap deal or bond issue to support the IMF.

Which ever way you look at it they will have to provide some excess liquidity to pump up the volume if they really want to support job stimulus and construction related industries. The only domestic spending I am interested in is physical bullion.

Back to the PMs, can the rally be maintained until closing? If it can we could see gold nudging 1680 and silver 32 levels. [As I am editing this post 32 has been swallowed and silver has raced past the post now.] I traded 0.125% of my volume back into cash tonight with a profit [3 times.] I also traded 50% of silver in USD and at times 75% to take profits but closed at 50% retained /50% sold. I am still primed with volume when the break-over comes in the not too distant future and will add to the volume when the dust settles from the FOMC 'bush-bash.'

Next week I shall expect profit taking to hit Monday, with a clear 1.50 jumping the pony on the back straight silver is loaded with more than 2.50 on-board. I will be watching carefully for the outcome of the FOMC. Watch for at least two weeks as the decisions may or may not kick in immediately. The outcome can sometimes be like a stubborn 'kick from a mule.' As I stated before, the fire they light sometimes is stealth-like and hits the target sometime later.

I doubt very much that they won't have manipulation of PMs in their sights. Strong bullion detracts from the dollar unless they rally forward on the same side of the track for a period. The dollar however is ready to be debased again as the pressure of the liquidity they have already pumped in takes a foothold.

At the end of the 'dash for cash' - last Friday night for me - saw the 'fire-dragon' draw near for the Chinese New Year. The refiner's fire is heating up. Silver certainly got purged of a few months of paper hanging around it's neck calling it an 'old grey.'

The silver to gold ratio has corrected to 51.915:1 which is almost 'Stirling' (925) but still sweet. Sooner or later the buzz will get back around that silver rallied so we might see some more 'flurries' at the station before too long. I called March before we 'broke the back' and could have a chance at 36 levels but that is pure speculation. If we are lucky there could be some sweet trades between now and then. This could be a good year for hard assets but not so good for the paper pundits which has been my call since late 2011. It is time to rattle the chains and shake the tins on physical accumulation because this rally tonight has not finished yet as the 'flying silver bullet' asserted itself at taking another shot at the lead.

'Hi ho Silver away' - Happy Nude Year - may you never have to shower with your socks on again!