First let’s get the sad news out of the way; this will be my last column for a while. It’s been a lot of fun and I’ve enjoyed hearing from many of you over the last two years; it’s been a great run. There’s no particular problem or disagreement prompting this exit, it’s just the way things go sometimes. Now back to business.

Gold was down in early trading, largely on profit-taking, but a late morning surge pushed prices higher by $0.18, then down again by $1.39 to $1,672.50. Silver was down $0.10 to $30.72 for a silver/gold ratio of 54.4. Prices are all over the chart this morning, sometimes switching between positive and negative territory every time the board updates.

Most industrial commodities were trading lower on less volatility today with precious metals being joined lower by platinum, crude oil, palladium and copper.

Most of the panic in commodities today centers around indications that China’s inflation rate is running higher than anticipated, which could lead them to scale back stimulus efforts. Asian currencies continued to rally against the dollar as the global manufacturing recovery starts to gain traction.

While it’s nice to see the global currency boot kicking someone else for a change, I wouldn’t get too smug just yet. After all, we’re the country willing to damage our own economy in pursuit of political ideology, as Congress is once again demonstrating. Instead of positioning ourselves to pounce on the opportunity with infrastructure investments, we’re taking careful aim at our own foot. It’s complete madness; I’ve never seen anything like it my lifetime.

Despite the profit-taking gold is likely to finish the week higher, but still in that clumsy price range that’s too high for buying and too low for selling as the shiny metal struggles to find a direction. I would stick with silver for the short term until some of the volatility in the gold market works itself out. Anything below $1,620 an ounce for gold would put me in a buying mood and anything over $1,690 I’d be in a mood to sell.

Since I may not be around to remind you, don’t be blown around by every wind of panic you read in financial journals or see on TV. If equity and commodity markets are subject to manipulation, how hard do you think it is to get the financial media to add fuel to the fire? It’s not hard at all and that’s why you should have a plan and stick to it.

Also keep in mind the best “up yours” you can extend to big finance is living debt free, paying cash when you can and keeping part of your wealth in hard assets like gold and silver. It may not seem like much, but in the debt economy, where people unthinkingly borrow money for almost everything they possess, the people who opt out of that perverse circle of that financial slavery are truly the rebels.

Good fortune and best wishes to all of you; have a safe and profitable 2013.

Commodities were higher Thursday on expectations of increasing demand from China as the global economy lurches to an uneven recovery.

Gold was up $7.77 in early trading to $1,663.87 and silver was up $0.19 to $30.51 for a silver/gold ratio of 54.5. Industrial commodities are higher almost across the board with crude oil, platinum, palladium and copper all outpacing gains by overseas currencies against the dollar.

Once gold fell out of the media spotlight, it immediately reversed a long price slide and started gaining ground for the week. The rise for silver has been more steady and sustained because silver is not only a precious metal it’s also an industrial metal with ever expanding uses in the medical and pharmaceutical industries. It would be no surprise then that when gold is showing price weakness that the silver/gold ratio would tend to increase over time.

While gold has few industrial uses, it has industrial grade buyers in the form of central banks and financial institutions looking to beef up their balance sheets. That’s one point Wall Street TV analysts dismissing “goldbugs”, a term I despise, consistently fail to address. If gold has no intrinsic value, why do central banks, the people whose business is money, use gold as a hedge? Why aren’t banks using an actual industrial metal like platinum?

The reasons Wall Street doesn’t like gold are pretty obvious. When you buy gold, you’re normally doing so with cash. That principle of exchange goes back a long way in the gold business. Except for options trading and deals between large customers, like central banks and governments, most physical gold trades are settled in cash. When you pay cash for anything Wall Street doesn’t get a cut and that’s real root of the “evil” of goldbugs from their perspective.

The other reason Wall Street doesn’t like you putting precious metals in your safe is that they can’t trade on it. When you keep stock in a 401(k) or investment account the broker can trade on the shares in your account without you knowing anything about it and most brokers usually do. They can “loan” your shares out to short sellers and collect commissions on both sides of the transaction. Isn’t big finance fun?!

But the gold in your safe is out of reach from your broker; they can’t loan it out, borrow against it, or find new ways to add fees. It’s a deal that sucks for them but it’s pretty good for you and now you know why the talking heads on financial TV treat gold and silver investors with the same wrinkled nose attitude that they usually reserve for their teenage daughter bringing home a member of a grunge band.

So, when you’re making investment decisions, make sure you always take into account whose interests on the line when you get advice.

Gold and silver will be out of the spotlight for a few days as Alcoa kicks off earnings season and AIG stole the headlines by threatening to sue the taxpayers who bailed them out.

Gold was up $1.99 to $1,663.19 and silver was down $0.06 to $30.38 for a silver/gold ratio of 54.7. If gold and silver prices hadn’t gone different ways this morning, the silver/gold ratio could have easily breached 55 today; that’s more good news for silver stackers. Crude oil joined silver lower while platinum, palladium and copper were all higher in early trading.

Being out of the headlines is actually good news for gold and silver. For decades the gold and silver trade was limited to big players, like central banks, and the retail gold and silver trade was a relatively small group of collectors and traders. The precious metals market was well-managed, predictable and you could count on gold and silver prices to track fairly consistently to fundamentals. Then Wall Street got involved.

Commodities futures, derivatives and high speed trading all combined to bring the volatility and price inflation of the equities markets to commodities. It wasn’t long before the debt economy was making inroads into what had formerly been like a giant version of eBay for hard commodities and raw materials.

I would still argue that gold and silver are your best bets for hedging against wild currency fluctuations and long-term currency values, but precious metals are also a way to opt out of the whole debt as money scheme.

Robert Kiyosaki maintains that savers are losers and, in some ways, he’s exactly right. Cash savings get whittled away by inflation and zero interest rate policies. The cash you convert to hard assets, like precious metals and real estate, will hold some relative value, even if currency values fall over time due to inflation.

On a bigger scale, when you don’t borrow money and keep part of your wealth in hard assets, it undermines the whole Wall Street debt cycle. When you borrow money the underlying paper is frequently sliced up and traded like a commodity. By holding a hard asset, like gold, you’re denying Wall Street the ability to sell that debt over and over.

There is a tendency for some investors to romanticize the “good old days” but sometimes the old way really is better. Living an old fashioned pay-as-you-go lifestyle supported by hard assets as a value hedge may seem boring but it’s definitely low stress.

Gold futures stabilized along with the dollar in choppy early trading on Tuesday.

In early trading gold was up $5.96 to $1,655.76 and silver was up $0.10 to $30.33 for a silver/gold ratio of 54.6.

Commodities in general were higher in early trading with platinum, palladium, crude oil and copper all posting gains.

One possibility that’s just starting to dawn on institutional precious metals traders is that the decline in gold prices may be related to a recovering U.S. economy and stronger dollar. It’s not that hard to understand really; we’ve been used to hearing bad news about the economy for so long that we all may be slow to recognize the signs of a turnaround.

After shedding nearly half their workers, state and local government balance sheets are in the best shape they’ve been in for years and in 2013 most experts are expecting government hiring to pick up along with private sector hiring. Consumer confidence is up, the construction industry is hiring again and just generally good news seems to be breaking out all over.

While it might seem contrary that gold prices would decline as the economy improves, the biggest changes in gold prices are related to currency and right now the U.S. is still the best deal the planet has going. None of the gloom and doom predictions about the ballooning cost of borrowing has materialized even as the Fed continued cheap money policies for the better part of a decade. A stronger economy and stronger dollar have prompted a shift in some investments away from precious metals and into equities.

All that could change in a blink if Congress keeps up this insane idea of using the debt ceiling as a budget hostage. That kind of negotiating tactic is bad for business and it makes us look like a clown circus on the global stage. If you walked into a business and heard one of the owners threatening to shut the place down if he or she didn’t get their way, how likely would you be to award that business a large contract?

For gold then I’m still on the sidelines at this clumsy price point. The price of gold is too high to spur buying and too low to recommend selling. If you want to make your small, usual buy at these levels I’d stick with silver at least until we get some stability in the markets.

Chris Poindexter, Senior Writer, National Gold Group, Inc

Gold briefly held in positive territory Monday morning before succumbing to a strengthening dollar and joining most commodities trading lower.

Gold was down $9.18 to $1,647.56 and silver was off $0.12 to $30.05, leaving the silver/gold ratio at 54.8.

It was a sea of red ink for industrial commodities across the board with gold and silver being joined lower by crude oil, platinum, palladium and copper. The bright spot for precious metals investors was that the drop in gold prices was lower on a percentage basis, lending further credence to my assertion that gold was oversold on Fed comments last week. Today’s drop is almost exactly in line with changes in the exchange rate for the dollar.

The other bit of good news for precious metals investors is silver’s tenacious grip on the $30 price point, refusing to stay anywhere in the upper $20 range. We’ve watched the silver/gold ratio continue to improve even as selling gold was in fashion. These are good days for silver stackers.

More good news for precious metals investors is that gold and silver will be moving out of the news cycle in favor of corporate earnings announcements. I’m always uncomfortable trading in the spotlight as media attention is inevitably associated with volatility. It’s a chicken and egg discussion trying to figure out if the media attention causes prices volatility or, like vultures to fresh roadkill, if the media shows up in time for the grisly aftermath. Regardless of the reason it will be nice to retreat to the shadows where precious metals trading really thrives.

We won’t be able to figure out where we are on gold prices until the market equalizes to something resembling fundamental trading. It would be great if there was a formula we could plug in to the money supply numbers and give us true value for gold, but that’s never going to happen. Precious metals prices are subject to the same kind of manipulation as any other commodity and the equities markets.

Not all that manipulation is bad, particularly in precious metals. Some of the price manipulation and contract sales are by big players in the gold and silver market and are intended to put some predictability in pricing for mining companies, smelters and mints. When it comes to gold and silver, predictability is good and volatility is bad for business.

So, for now, I’m on the sidelines with gold until the market settles down. If I’m going to make any trades right now, it’ll be in silver.

There were plenty of indicators of continued bearish pressure on the gold market but the depth of Friday’s gold crash is extreme even by those standards.

Gold was down $24.70 in early trading to $1,636.30 and silver was down $0.59 to $29.51 raising the silver/gold ratio to 55.4.

The silver/gold ratio going up nearly a full point overnight means this is a genuine softness in gold prices and not a general softness in commodities. To be fair industrial commodities were lower on a stronger dollar with crude oil, copper, platinum and palladium all trading lower but gold was down by far steeper margins.

So why was gold getting it on Friday? The most likely explanation is an announcement that the Fed is talking about an end to bond buying. The first whiff of a rumor that the loose money policies that have been with us, more or less since the late 90s, may be nearing an end sent gold futures tumbling.

February gold futures dropped 2.3 percent, to the lowest prices since August. Silver prices also dropped but overall held up better than gold by nearly a full percentage point.

What that changes for people like you and I is absolutely nothing, although if the downtrend continues, I’ll switch back to splitting my regular buys with gold instead of putting it all in silver.

For one thing you shouldn’t be buying gold and silver as a growth investment; that’s why you buy stocks that pay dividends. You’re buying precious metals to hedge against the value of currency and when gold prices are falling faster than currency on a percentage basis, that’s a good time to add to your holdings.

I also don’t believe for a minute that the Fed is going remove the easy money punch bowl from Wall Street’s banquet table. Like a junky addicted to heroine, Wall Street has come to depend on cheap money to finance their derivatives habit. And while the dealer of all that cash may be threatening to raise prices, I’m not at all certain the Fed will be able to stand firm when the convulsions of withdrawal start to wrack their buddies in the financial sector.

In the meantime, take advantage of buying opportunities when they appear. If gold dips below $1,600, that’s a very attractive price. Silver under $30 is always happy territory for buyers, a price silver reached only during the summer last year.

The irrational exuberance wore off in the markets and gold, along with most industrial commodities, floated back down to earth today.

Gold was down $11.09 in early trading to $1,676.11 and silver was off $0.24 to $30.79 for a silver/gold ratio of 54.4.

Industrial commodities took a beating pretty much across the board, with crude oil, palladium and copper joining gold and silver lower. Platinum was the one bright spot in industrial metals, trading higher by $7.50 an ounce.

This could all flip around tomorrow again when the jobs report comes out, which is expected to show better than expected employment growth. That good news may also be short-lived unless the numbers are seasonally adjusted to account for retail employment, which tends to make December look really good and January not so great.

In the meantime if you want to make your small, regular precious metals buy then I’d stay with silver. While silver prices have rallied, the silver/gold ratio is still under 55. Silver remains attractive with prices still holding around $30 an ounce and silver stacking is fun.

For gold the current price is a little more comfortable but there are some bearish trends in outside markets that are a concern. We have to get past the current volatility induced by Congressional budget follies before we’ll see a return pricing even remotely connected to fundamentals.

The way budget negotiations are going now that uncertainty could hang over markets for quite some time. While we avoided the fiscal curb we’re right into the next debt ceiling negotiations and it sounds like the president is prepared to challenge the constitutional legality of the debt ceiling. Setting the legal issues aside expect continued volatility in the precious metal markets until it’s all sorted out.

In the meantime, adopt a volatile market strategy by keeping some reserve cash to make small buys when prices nosedive. Unless there’s a huge move to the upside, the spread usually isn’t enough to day trade your gold and silver, but the dips will provide some attractive buying opportunities.

If you need the cash from gold and silver conversions, never fear. I believe 2013 will provide at least one prime selling opportunity, maybe more than one. We’re overdue for a big rally.

Gold surged on the news of a deal on the fiscal curb and European equity markets traded sharply higher.

In early trading Wednesday gold was up $14.92 to $1,685.82 and silver was up $0.93 to $31.13 for a silver/gold ratio of 54.

Commodities were sharply higher across the board with crude oil up over 1.5 percent in early trading and was joined higher by platinum, palladium and copper.

It’s funny how gold prices and the markets were looking so grim just before the holidays and now here we are on our way back to $1,700 an ounce for gold. It’s hard not to get caught up in the enthusiasm but do keep in mind the budget circus will be back in town in February and we’ll get to start the crazy all over again.

I guess February will take care of itself and for right now we can sit back, relax and enjoy a nice run up. Hopefully you put some of your holiday cash into silver when prices dipped under $30 an ounce, before silver reversed its month-long downtrend.

The irrational market exuberance in the U.S. is being matched by equally delusional optimism in Europe with the euro gaining solidly against the dollar and Euro-zone equity markets flying high. It’s as if an occult hand had swept in on ghostly wings to lift the markets out of their pre-holiday slump. Expect domestic equity markets to kick off the new year with a bout of optimism as well.

Sometimes it seems like traders just get tired of being depressed, but in fairness the economic news has been getting better for some time. Corporate profits are still healthy and unemployment numbers continue to improve, though that could change this month as retailers trim staff after the holidays.

For gold and silver the time to buy was before the holidays and we’re at a bit of a clumsy price point now. If gold continues its run past $1,700 and you need the cash to pay back a little youthful exuberance with the credit cards in December, consider making some small sales. I’m not sure it’s a good strategy to buy into this rally until we see a return to fundamentals.

Perhaps I shouldn’t be such a skeptical humbug and just enjoy a nice rally to kick off the new year. No matter what else happens it’s always good to start off on a positive note. Happy new year, everyone.

It looks like it’s going to be a slack end to another dismal trading week for precious metals as the world stumps on past the end of the Mayan calendar.

In early trading gold is up a meager $0.02 to $1,648.32 and silver is down $0.16 to $29.79 for a silver/gold ratio of 55.3.

Gold and copper are the bright spot in industrial commodities today as platinum, palladium and crude all trade sharply lower. Even though silver is trading lower, it’s doing slightly better than gold as evidenced by the rising silver/gold ratio.

Many traders will head out for holiday vacations today, myself included, leaving the precious metals market at a 4-month low and no happy news to report on the horizon. So, while I’m spending the next week at the beach demonstrating why men my age should not be attempting the boogie board, I’ll leave you with some holiday homework reading. For those of you who haven’t already read it, start with Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future and if you’re really convinced the economy is going to collapse, then I’d also suggest The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy.

While I don’t necessarily agree with every investment point they make, it’s good to look at other points of view when charting the course that’s right for you. Everyone’s financial situation and appetite for risk are different and there is no one-size-fits-all investment strategy that works in all cases.

When it comes to precious metals over the holidays, I’ll be watching the silver sales. I’m genuinely surprised to see silver under $30 an ounce this soon but I’m not about to let the opportunity slip by. Gold is attractively priced as well, though somewhat higher than the heady buying days of August when gold prices hovered near $1,550 an ounce.

Also keep in mind that gold and silver are not the only commodities currently hitting the skids; the downward trend is nearly across the board in industrial commodities. What’s happening is big traders are shaving some of their derivative bets in commodities but the why of it is harder to determine.

Sometimes it’s just not worth trying to divine the dark heart of Wall Street and a better strategy is to take advantage when its trading whimsy puts gold and silver on sale. That’s what I’m doing. A safe and happy holiday season to all.

The euro gained against the dollar as overseas investors worried about the U.S. going over the fiscal curb sending gold prices higher.

Gold was trading higher Thursday, up $2.97 to $1,670.49, and silver was up $0.14 to $31.17 bringing the silver/gold ratio to 53.5.

Gold and silver were joined on the upside by platinum while palladium, crude oil and copper all traded lower.

It’s an interesting dance in commodities right now as most are trading artificially higher due to nearly $4 trillion in excess cash that the Fed has injected into the U.S. currency supply. That money was supposed to find its way into the economy in the form of small business loans to boost hiring. Instead the relative handful of big players at the top shunted off the bulk of that money to speculate in commodities via the derivatives market and the rest of us be damned.

This excess of cash not finding its way into the broader economy is a bigger problem than simply enriching an already wealthy group of people at the top of the economic food chain; it’s also starving the poor savers at the opposite end of the economy by robbing cash savings of any real value and making small business loans more expensive and difficult to obtain than the Fed intended. Big banks don’t care about making loans to small business when they need the cash to cover their bets in the giant casino of derivatives trading.

Putting aside the fact that what’s going on in our nation’s financial system just seems wrong to most Americans, it’s also really messing up the commodity markets, including precious metals. I believe the Derivatives Follies going on over at Wall Street are the reason that gold and silver are no longer predictably reacting to fundamental market forces.

It all probably means that we’re paying a Wall Street premium on gold and silver right now, but also keep in mind that you have to balance gold and silver prices against the value of currency, which is also wildly out of whack due to all the excess cash.

Despite the manipulation, gold will hold some relative value to currency and the Federal Reserve has been printing a lot of money the last few years. How close we are to the actual market value and how much of current gold prices are the Wall Street premium, I can’t tell you. All I know is I trust gold and silver more than the weightless computer blips in my bank account.

Gold dropped sharply midday on Tuesday and never looked back with the price softness carrying over to trading early Wednesday.

In early trading gold is down another $2.20 to $1,673.98 and silver is off an additional $0.14 to $31.60 for a silver/gold ratio rising to 52.9. It was a mixed bag for commodities Wednesday morning with crude oil and platinum slightly higher while palladium and copper moved lower.

Some gold traders and analysts are crying manipulation at the current price moves, but that’s not unusual when a sudden drop catches them by surprise. Anyone who wasn’t aware the equity and commodity markets were being manipulated to the advantage of a handful of big players really hasn’t been paying attention. While the current price drop may be manipulation, it isn’t wildly different manipulation than we see every day.

We’re also seeing the predictable doomsday predictions of gold going to $1,200 an ounce. I don’t believe that anymore than the articles a couple months ago claiming gold could reach $10,000 an ounce. Notice you never read about an analyst losing his or her job for making such a wildly speculative call that was also dead wrong.

That’s because most of those articles come from places with an interest in panicking the herd. My philosophy is when the market gives you sprouted barley, make beer. Gold in the mid-$1,600s and silver at $31 means it’s time to move up some of your small, regular buys.

Just for the sake of argument, what if the predictions about gold at $1,200 are correct? In that case I’m going to have a lot of gold and silver in the safe by the time prices go that low because I’m buying all the way down, just like I did with equities in 2008. If the market wants to sell gold at 2010 prices, I’m buying up to the limit of the fixed percentage of wealth I keep in hard assets. If prices go even lower after that I will, with a Herculean display of self-control, confine myself to cherry picking the best deals.

The truth is there may be good reasons for what the market is doing right now. The economy is looking better, at least for those at the very top. Wall Street has seen its best returns since 2003 and corporate profits are popping. That kind of good news could be prompting a shift from safe harbor investments to the equity markets. Yields on long-term Treasuries have gone up lately and that could be prompting some investors to switch out of metals.

At times like these it’s important to stick to your plan and not panic at every rumor.

Commodities were largely flat to slightly higher Tuesday as the market continues to drift sideways in the face of economic numbers that are overall positive.

Gold was up $1.39 to $1,698.49 and silver was up $0.15 to $32.40, for a silver/gold ratio of 52.4.

Industrial commodities are mostly higher by small margins including platinum and crude oil, while palladium and copper are trading lower.

While flat markets tend to annoy big traders, it shouldn’t be causing retail traders any grief. This is a great opportunity to add to your collection at last year’s prices. When silver slips to the $32 range I start paying attention to sales and start swinging by my local precious metals dealer to just say hello and look over the stock.

The reason wild gyrations in price should not bother retail traders is because you’re not buying gold and silver as growth investments. Gold will never pay a dividend and you’ll never open your safe and find your silver had a two-for-one split. What you will find is the troy ounce of gold you put in the safe five years ago is still a troy ounce of gold and still maintains some relative value in relation to currency.

That’s why you don’t put all of your wealth in precious metals. Think of it like ballast in the hold of a ship, a weight of stability that smooths out the ups and downs of your cash savings. Gold and silver are hard assets, just like real estate is a hard asset. The difference is you can’t put real estate in your safe.

Property, even vacant land, has costs associated with maintenance and taxes. Developed land with a structure has a higher tax rate, requires more maintenance, plus insurance. Collectively those are called ancillary costs and they reduce the overall margin. In most cases real estate, unless it’s commercial property, loses value when measured against inflation when you count the ancillary costs. People think they’re making money if they get more back from a house than they paid for it, but when you figure in the transaction and ancillary costs, most of the time real estate is a loser.

The value in precious metals is that once you pay the dealer margin, there are no ancillary costs unless you pay someone to store it for you. When it’s in your safe it’s not being taxed and your broker can’t make money trading it or loaning it out for short sales. The gold and silver in your safe are out of reach of government and Wall Street shenanigans, free to find their own level relative to currency. That value relative to cash is where gold and silver truly shine.

Markets were off to another lackluster start on Monday as investors dumped contracts on industrial commodities and overseas equity trading was mostly down.

Gold was trading weakly higher Monday morning, up $2.70 to $1,697.90 and silver is up $0.03 to $32.32 for a silver/gold ratio of 52.5.

The dollar is up against the euro but with commodity prices so disconnected from market fundamentals even that is no longer a reliable indicator of market direction. While gold, silver and crude oil are higher, platinum, palladium and copper are trading lower. Mainly markets are flat to slightly down, with prices shifting between small gains and small losses every few minutes.

I get nervous when I start reading predictions of gold reaching new highs so it comes as somewhat of a relief to read that mainstream analysts are heralding a looming gold bust and the impending sale of gold by central banks. The best time to buy gold and silver is when the voices sounding the alarm of gold’s pending demise are the loudest.

Popular financial media analysts are pointing to gold’s flat performance over the last year as evidence that the gold market is disconnected from fundamentals and the end is nigh. But if you look at a graph of gold prices since 2002, you’ll see this isn’t the first time gold has traded flat for a sustained period of time.

Notice the similar flat spot in 2008 where we heard the very same type of gloom and doom pronouncements about gold that we’re hearing today. I didn’t buy it then and I’m not buying it now.

Gold closed down for the third week in a row and that after news which should have sent the shiny metal on a rocket ride.

The week ended for gold at $1,696.00, down $0.59 and silver stopped at $32.25, down $0.29 for a silver/gold ratio of 52.5.

I’d like to be able to tell you that I’m optimistic about gold prices next week but, if there’s no good reason for the selling that’s been going on the last three weeks, how can I honestly try to tell you next week will be better? The fact is even analysts at the big trading houses are stumped and grasping at straws to try and explain the softness in gold prices.

I’ve finally reached the conclusion that we are wandering into uncharted market territory where the things we “know” about how markets work may no longer apply. We’ve reached a place in market history where the traditional metrics are not reliable indicators of what the market is going to do.

The recent Federal Reserve decision to boost its current program of quantitative easing, which the rest of us call “printing money”, to a combined total of $85 billion a month should have sent the stock market soaring and boosted gold prices to a higher new level. That’s what I would have predicted a few years ago and the scary part is that back then I might have been right.

When central banks start making money out of thin air that should put upward pressure on commodities hard assets in general. We should be seeing gold prices continue higher, along with industrial metals like platinum, palladium and copper. Instead the stock market closed lower, gold prices have sagged and industrial metals are sideways to down and that is definitely not good.

Markets are no longer behaving predictably, leading people like Chris Martenson at Peak Prosperity to suggest the markets are broken. Most of you know I take that one step farther to suggest that the markets are not merely broken, they are rigged in favor of a few big players at the top.

Rigged or not, the markets cannot defy gravity indefinitely; there will be a day of accounting. Sooner or later the currency bubble will pop and inflation will slap us upside our economic head. That’s why I’m maintaining my strategy of small purchases of gold and silver on the price dips.

When the day of inflation reckoning finally arrives, I want at least part of my assets in something solid.

Unless something very startling happened late in the trading day, gold is on track to post another down week.

In early market action gold was bouncing off its lows, up $0.22 to $1,696.81, and silver was down $0.05 to $32.49, raising the silver/gold ratio to 52.2.

Commodities other than gold and silver were enjoying weakly positive trading with crude oil, platinum, palladium and copper all trading higher as the euro gained on the dollar in currency markets.

Most analysts are attributing the movement in gold prices to a lack of progress in the talks centered around the fiscal curb, the latest fabricated financial media crisis. Certainly there will be real market effects if sequestration kicks in, but the greater effect will be psychological. When the market has convinced itself something bad is going to happen on a certain day it almost inevitably becomes a self-fulling prophecy.

Overall the economic news remains positive with manufacturing picking up in China and demand for industrial commodities showing some improvement. Equity markets in the U.S. and Europe remain near their highs for the year, with both the Dow and S&P higher on the month, while corporate balance sheets remain largely healthy.

I had a very different attitude toward the housing market in 2005. Everything I saw said valuations were unsustainable and I put most of the real estate we owned up for sale. At the time people told me I was out of touch with the market reality. Instead of gloom and doom the mood was one of unbridled optimism.

During the subsequent market crash, when layoffs were happening by the hundreds of thousands a month and the financial media was in a doomsday panic, I was buying equities all the way to the bottom.

It’s good to keep in mind that what may be big news in financial and political circles likely isn’t going to change a well-structured, long-term investment strategy. The financial and political media have an interest in keeping readers stirred up but panic and fear are your biggest enemies in investing and that’s particularly true in precious metals.

When the market gives you lower prices on gold and silver, disregard the media panic and stick to your plan.

To say the precious metals market was unimpressed with the Fed’s new round of stimulus would be an understatement. After an initial boost, gold prices turned south and never looked back.

Gold was down $15.06 in early trading to $1,693.90 and silver was off $0.64 to $32.69, for a silver/gold ratio of 51.8.

To be fair it wasn’t just gold and silver taking a hit, it was industrial commodities across the board. Crude oil, palladium and copper were all trading lower and the biggest hit was reserved for platinum, trading lower by nearly $24 an ounce.

As we discussed previously the short-term fundamentals favor lower gold prices going forward, but I expected the post-announcement QE bump to last longer than a few hours. The weakness we’re seeing across the board in industrial commodities smacks of deflation with the economy showing steady signs of improvement while prices for industrial commodities continue to weaken. One would expect, when industrial demand increases, that prices for commodities would go up; obviously that’s not what’s happening.

Some of the contrary market action is due to the recovery of the dollar against the euro. While the Fed’s QE4 plan seems ambitious you have to consider the numbers in light of what’s going on in other countries. From that perspective the U.S. Federal Reserve’s QE is a lightweight. Once again the U.S. finds itself as the cleanest shirt in the economic hamper.

That doesn’t completely account for commodity price moves as the decrease in industrial commodities is beating the currency spread by a wide margin.

At times like this is where I remind you that you’re not buying gold and silver as a speculative investment; you’re buying it as a hard asset anchor for a fixed percentage of your wealth. So, when these topsy-turvy market days come along, you can relax.

As long as the market is pushing gold prices lower, then maintain your schedule of small, regular buys of bullion-priced gold and silver. It remains a certainty that you’ll never make money chasing the market.

Gold was higher Wednesday morning on expectations that the Fed will continue pumping money into the economy with a new round of stimulus the media is calling QE4.

In early trading gold was up $6.30 to $1,715.40 and silver was up $0.20 to $33.15, letting the silver/gold ratio creep up to 51.7.

Do keep in mind the market has already priced additional stimulus into gold prices, so if the Federal Reserve doesn’t come through expect a sharp correction. Also remember the Fed has disappointed investors expecting stimulus in the past, though that seems unlikely this time.

The global race to the bottom on currency valuations is one of the factors that will likely force the Fed’s hand. The same currency dilution on a global scale also bodes well for the future of gold and silver prices.

Many investors are waiting for more signs of inflation before they invest in gold, which is like waiting until the levee breaks to try and buy flood insurance. But inflation has remained relatively tame, a side effect of the debt economy. If anything the economy has gotten a whiff of deflation as hard asset prices have gone sideways at a time the government is printing record amounts of currency.

During the runup to the great crash Wall Street created massive quantities of money by making real estate loans to people who couldn’t afford the payments. In a debt economy debt is a form of money and consumer debt expanded at light speed. After the crash banks stopped lending to try and shore up their balance sheets. Had the Fed not stepped in with massive infusions of cash, we would have almost certainly gone through a brutal and sustained period of hard asset deflation.

Right now the inflation we would expect from currency dilution and the deflation from banks and individuals retiring debt balance out fairly well, but it’s a narrow path for the Fed to walk.

For gold and silver investors there’s no reason I see to change strategy unless deflation becomes a big problem. The Fed is going to keep the dollar competitive on global markets and that means more dilution ahead. Once banks and individuals get farther along in retiring debt, inflation will happen.

So enjoy these calm trading days and the chance to buy gold in the low $1,700 an ounce price range as the calm may not last.

Gold was trading flat as the Federal Reserve starts a two-day meeting where most analysts expect the Fed to further expand stimulus programs.

In early trading gold was down $0.17 to $1,711.23 and silver was off $0.07 to $33.14, for a silver/gold ratio of 51.6.

Despite a surge in the euro that sent crude oil prices higher, most industrial commodities were trading flat to lower on Tuesday. Platinum was trading weakly higher, but palladium and copper were modestly lower. This is what a holding pattern in the commodities markets looks like.

What happens tomorrow depends on what comes out of the Federal Reserve meeting over the next two days. Some analysts are saying the market already priced in additional stimulus but I’m not buying that line. Industrial commodities have been depressed for weeks; if anything gold is pricing less stimulus.

Given all the good economic news lately, if the Fed announces a reduction in bond purchases, then gold prices will certainly correct lower. It’s just as likely we’ll see a brief run up tomorrow if the Fed announces additional stimulus. I don’t think either trend will last much past the end of the week.

The short-term fundamentals and improving confidence numbers still favor weaker gold prices ahead. Balancing out the negative forces is the continued strong demand from central banks, the people printing the fiat script we’re all pretending is really money. Obviously they don’t have a lot of faith in computer blips in your bank account or they wouldn’t feel the need to bulk up their balance sheets with gold bullion.

For smaller investors the calculation is less complicated. All you have to do is figure out where the sustainable growth is going to come from to boost the equities markets and I still am not seeing it. Corporate profits have increased by squeezing more productivity out of fewer employees but we’re nearing the limits of productivity improvements and the growth of corporate profits has started slowing. The only bright spot in growth is a recovery in construction but I don’t see that as strong enough to lift the economy out of the dumps.

The Fed is still printing money like there’s no tomorrow, there’s no sustainable growth to drive equities, so what’s the motivation to be less defensive in my investment mix? For now I’m sticking to my hard asset gold and silver investments until there’s a more sustainable path to growth.

Despite the dollar strengthening against overseas currencies, gold and silver managed to move higher, supporting my contention that commodities were oversold.

In early trading gold was up $8.23 to $1,711.60 and silver was up $0.23 to $33.30, for a silver/gold ratio of 51.4.

It was a rally day for most industrial commodities with gold and silver being joined higher by crude oil, platinum, palladium and copper.

Given the amount of currency being pumped into global markets by central banks one would expect rampant inflation, which is something that would lift commodity prices, but we’re just not seeing it. The lack of either decisive inflation or deflation puts the banks in a quandary because, quite literally, they’re running out of excuses to print money. Most central banks have had to switch from an emphasis on currency policy to considering employment, economic growth and financial stability.

Largely as a consequence of tame inflation we saw gold prices top out in 2011 and remain basically flat ever since. But it’s kind of like a cartoon character running over the edge of a cliff; the realization that there is nothing underneath them comes as a surprise.

We saw the same thing in 2005 in the real estate market. Valuations were insane, people of relatively modest means were getting wrap-around mortgages for homes priced north of $400,000 in areas that didn’t have the jobs base to support those home values.

I warned my real estate customers and cautioned them to stick to moderately priced homes they could afford. My reward for that advice was watching them jump ship to other agents willing to sell them more house than they could afford. It took a surprisingly long time for the mortgage crisis to actually catch up to the real estate market and freeze credit markets.

Likewise I believe the currency policies we see in most central banks will be the next bubble to burst. Like the housing market things will get bad but I don’t believe the global economy will implode. Countries are not going to default when their central bank can print virtually endless quantities of cash.

In response to the mortgage meltdown my wife and I opted out of the housing market. Likewise, you can opt out of currency follies by keeping a percentage of your wealth in hard assets like gold and silver.

Despite a strong finish on Friday, gold still ended down for the week. The good news is it’s still higher over the last month.

Gold ended trading Friday up $3.66 to $1,703.80 and silver was up $0.07 to $33.05 for a silver/gold ratio of 51.5.

Like gold, silver was also down for the week but silver has outperformed gold on the 30 day scale. Despite the inherent volatility in silver, it still is finding acceptance among investors and it tends to be an addicting investment class. Silver stackers look at Silver Eagles in a display case with the same look most people reserve for puppies at the rescue center.

There’s a lot of hand-wringing in the media this week around the price of gold and analysts are pointing to this and that as reasons gold is not doing better. I’m still not clear on the value of looking for reasons after the market moves one direction or another and sometimes there just isn’t a good reason for markets to behave the way they do.

Much of the analyst angst stems from the belief many investors cradle from long exposure to economic dogma that markets are somehow logical and that investors act in their own best self interest. That might have been true back in the 50s but it certainly is not the modern reality in commodity or equity markets.

The truth is markets are run by machines that do the bulk of the trading; machines that are only as logical as their programming. The problem with hundreds and thousands of machines trying to skim a few pennies from one another is that the interplay of thousands of machines all operating independently regularly serves up trading scenarios that cannot be predicted.

Layered on top of the barely regulated chaos of the Market By Machine are a few big traders with the ability to game the system. These cloistered few have billions to move from this market to that, giving them the ability to depress prices one moment and capitalize when prices recover the next. Actually, when I say “moment” I mean a few microseconds, if that.

Big traders can cause momentary spikes in market trading by just putting in orders that end up being canceled before they’re even executed. In a world of hyper-reactive machine trading those phantom orders can trigger selling or buying by thousands of automated trading systems, all trying to beat the competition by a few fractions of a second.

So my challenge to my fellow market analysts is to explain, at the trading level, how any of that relates to the budget negotiations in Congress? Certainly big events can move markets, but starting to think that markets are always logical and to look for meaning in the numbers is a trap.

I would be the first one to admit that these same forces are acting on the gold and silver markets. The prices of precious metals are influenced by a number of big players and trading houses. So, how do you know then whether gold is fairly valued relative to currency? You don’t. No one does. I doubt even Chairman Bernanke knows and he’s the guy with his thumb on the nation’s currency printing press.

I’m not buying gold because I have some special insight on its value relative to currency. I’m buying it because I know that, no matter what happens to the markets, the fraction of my wealth in precious metals will hold some relative value in whatever passes as currency at the time.

In a world of hyper-reactive machine trading, the gold in your safe is as close to a solid guarantee as anyone can get.