Category: Silver

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Gold/Silver: Long Term Value vs Dollar

A description of what would occur over the long term with gold and silver was provided on January 15, 2023. The following charts were developed to provide nominal values with some perspective on that discussion. There are times, such as October-November 2008 and September 2022, when metal values diverge away from the U.S. Dollar’s relative value resulting in an undervalued situation for metals. As noted on January 15, 2023, the next peak in gold and silver is expected to occur between November 2024 and May 2025. During that time, an overvalued situation for the metals should occur.

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Economy/Gold/Silver: Cause and Effect

Inflation: The Biggest Scam In The History Of Mankind – Hidden Secrets of Money Ep 4

Three economic rescue packages were signed between 1970 and 1971. What followed was a run up in silver prices until the first quarter of 1974. Three economic rescue packages were signed between 2020 and 2022. Based on history, the result will be another run up in gold and silver prices.

Cause:
Economy/Gold/Silver: Impact of Congressional Spending

Effect:
Silver prices could touch a 9-year high in 2023 — with a bigger upside than gold

Gold price backs off on rising dollar, but set for fifth weekly rise

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Economy/Gold/Silver: Impact of Congressional Spending

The $2 trillion Cares Act was signed on March 27, 2020. The $1.9 trillion American Rescue Plan was signed on March 11, 2021. The Inflation Reduction Act of 2022 was signed on August 16, 2022. Signing three economic rescue bills within three years to provide $4.7 trillion in funding is extreme.

The last time two economic rescue bills were passed was when the $152 billion Economic Stimulus Act of 2008 was signed on February 13, 2008, followed by the $831 billion American Recovery and Reinvestment Act of 2009 that went into effect on February 17, 2009. On February 17, 2009 gold futures closed at $967.50 and moved up to a high in the futures market of $1923.70 on August 5, 2011. Silver futures closed at $14.03 on February 17, 2009 and moved up to a high in the futures market of $49.56 on April 28, 2011.

A similar series of events took place between 1975 and 1977. In 1975 the $23 billion Tax Reduction Act was signed on March 29, 1975. This was followed by the Economic Stimulus Appropriations Act of 1977 that was signed on May 13, 1977. Following the approval of these two bills, gold futures hit a closing high of $909.9 on January 22, 1980 and silver futures closed at $41.50 on January 21, 1980.

The source of funding many of these bills goes back to August 15, 1971 when Nixon closed the gold window and stopped the international convertibility of U.S. Dollars to gold. On August 15, 1970 the Economic Stabilization Act of 1970 was passed to stabilize prices, rents, wages, salaries, interest rates, dividends, etc. as part of a price control program. On July 12, 1971 Nixon signed the $2.25 billion Emergency Employment Act of 1971. After closing the gold window on August 15, 1971, Nixon expanded the size of the next stimulus bill by signing the $15 billion Revenue Act of 1971 on December 10, 1971. Gold futures then went from $44 on December 10, 1971 to $179.80 on April 3, 1974. Silver futures went from $1.43 on December 10, 1971 to $6.29 on February 26, 1974.

The impact of approving very large rescue plans through consecutive stimulus bills has historically been followed by significantly higher gold and silver prices within 9 to 11 calendar quarters of the last bill being approved. In this case it would be the $739 billion Inflation Reduction Act signed on August 16, 2022. Based on this timeline the next peak in gold and silver is expected to occur between November 2024 and May 2025.

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US Dollar/Gold/Silver: Declining Dollar

Daily engrbytrade™ calculations indicate the US Dollar is expected to continue moving lower. Similar daily calculation results noting a decline occurred on November 15, 2022. Weekly futures trading data calculations also indicate the Dollar will continue to move lower in 2023. In addition to this the effect of a declining Dollar will cause gold and silver to continue moving higher. Current intermarket futures trading data structural calculation results for gold and silver are similar to that of January 27, 2009.

Stock chart courtesy of StockCharts.com.

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Dollar/Gold/Silver: Predetermined Course

On October 9, 2022, it was noted that the US Dollar had an upper trend line angle of 26.26 degrees above the x-axis and was similar to what was developed between 1991 and 2001. The chart below shows the US Dollar hit a high of 114.75 on September 28, 2022 with an upper trend line angle of 24.19°. This indicates a predetermined course was developed after 2008 using an upper trend line angle of 25.225° (+/-1.035°). Current intermarket futures trading data calculations show the US Dollar is expected to move higher, repeating a move upward similar to what occurred during the first half of 2001. As the US Dollar moves toward the upper trend line, a decline in value is expected for the Australian Dollar, British Pound, Copper, Euro, Natural Gas, Heating Oil, and Platinum.

During the Dollar’s initial rise in 2001, the Dow moved up into mid-February 2001 and then had a sharp decline going into the end of March 2001. Preliminary data indicates the Dow is expected to conduct a move similar to this during the first quarter of 2023.

Long term intermarket futures trading data calculations also indicate gold and silver are expected to develop a predetermined inverse chart structure of the US Dollar that is similar to the time frame between January 2001 and March 2008, as shown in the charts below.

Stock chart courtesy of StockCharts.com.

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Silver: Decline Continues

As of September 1, 2022, calculations show silver will continue moving lower to 10.65 (+/- 1.5%). This decline is expected to be similar to what occurred between September and October 2008. Before March 2023, the Silver Two Year Timeline will take effect and a move to significantly higher levels is expected due to trillions of Dollars that have been injected into the economy.

Stock chart courtesy of StockCharts.com

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Silver: Tracking 2008

Engrbytrade daily and weekly calculations show the August 2022 decline in silver is still tracking with August 2008. As noted on July 20, 2022, a decline to 10.65 (+/- 1.5%) between November 1, 2022 and December 19, 2022, is still planned. Futures trading data shows that when this decline is complete, a long term move upward will start.

Stock chart courtesy of StockCharts.com.

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Silver: Decline Continues

Futures trading data and engrbytrade structural calculations indicate silver will continue to move lower based on the original thesis noted on July 6, 2022. At this point silver is expected to ultimately reach 10.65 (+/- 1.5%) between November 1, 2022 and December 19, 2022. This is the same range that silver moved into during  mid-September 2008.

Stock chart courtesy of StockCharts.com.

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Silver: 2008 Decline

The upcoming July 2022 to October 2022 silver futures chart structure is expected to be similar to the July 2008 to October 2008 structure with a move below $13 as stock markets collapse during the last half of 2022. Upon completing this decline, a long term move upward should occur based on $3.9 trillion of combined stimulus from the 2020 CARES Act and 2021 American Rescue Plan that will eventually make its way through the financial system and move into gold and silver as a hedge against a declining Dollar. The upcoming move after 2022 should be similar to what occurred after $999 billion from the Economic Stimulus Act of 2008 and American Recovery and Reinvestment Act of 2008 made its way through the financial system during 2009 and 2010.

Chart courtesy of StockCharts.com.

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Silver: Two Year Timeline

Regardless of political affiliation, each response to an economic slowdown results in the development and passage of a bill that will provide funds needed to assist the economy. As the size and scope of each bill continues to grow over time one side effect after two years from the passage of this type of bill is a price increase in silver. The following list is an example of what happens approximately two years after a major economic stimulus, recovery, growth, or rescue plan is passed and signed into law.

  1. On December 10, 1971 Richard Nixon signed the $15 billion Revenue Act of 1971. Two years later silver started a move upward from $3.05 on December 13, 1973 to $6.49 on February 27, 1974.
  2. On May 13, 1977 Jimmy Carter signed the $20.1 billion Economic Stimulus Appropriations Act of 1977. Two years later, silver started a move on May 11, 1979 from $8.35 to a high of $42.29 on January 24, 1980.
  3. On June 7, 2001 George W. Bush signed the $1.3 trillion Economic Growth and Tax Relief Reconciliation Act of 2001. Two years later, silver started a move on June 11, 2003 from $4.48 to a high of $8.45 on April 2, 2004.
  4. On February 13, 2008 George W. Bush signed the $152 billion Economic Stimulus Act of 2008. Two years later, silver started a move on February 8, 2010 from $15 to $30.68 on January 3, 2011.
  5. On February 17, 2009 Barack Obama signed the $831 billion American Recovery and Reinvestment Act of 2009. Two years later silver started a move on January 25, 2011 from $26.86 to a high of $49.80 on April 25, 2011.
  6. On March 11, 2021 Joe Biden signed the $1.9 trillion American Rescue Plan Act of 2021. It is expected that starting two years later (March 2023) silver will initiate another significant move to higher levels.

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