Silver has dropped over $1 today???? What gives? China added to Reserve Currency!

So this morning silver started at $18.97 and it went as low as $17.74; currently it sits at $17.95 and Gold started at $1312.70 and now sits at $1269.30. So I called a good friend that is deep into the financial world and asked what gives? He stated that the Chinese Yuan, or as known as the Renminbi on this past Saturday was added to the Reserve Currency along with the USD, British Pound, etc and the Silver and Gold spot drops are reflective of this. Some believe that this is good as it will show the "true" value of Silver and Gold. I am not so sure. What are your thoughts on this?

 

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Precious metals have been chronically overpriced for much of the past decade. This is, hopefully, the start of a return to some semblance of sanity.

 

I think they are relatively valued right now. Maybe a touch high from people unable to get returns anywhere stocking up some, but based upon 40 year trendlines I did a while back $80-20 and 1200-1400 did not seem out of line really.

Would I like to go back to the "good old days" of buying junk silver at 3 times fave and $5 gold for $89? Sure I would, but I would like to go back to $1 bread as well. Most everything except computers goes up every year.

 

I think it has more to do with the FED talking about how the economy could sustain a rate raise and then perhaps even more later on. It's been known for well over a year that this October the Renminbi would be added to the special drawing rights basket. Although this type of thing has lead to major spin and in some cases outright disinformation. Largely being pushed and spread through the PM hawkers who have a vested interest, in themselves. Who also ironically enough want to sell all that precious silver & gold "that's headed to the moon" so they can bank the same fiat federal reserve dollars they decry.

 

The dollar is strengthening in an anticipation of a US rate hike, which could hold down the already low inflation rate. Precious metals traditionally are a high inflation hedge so the prices are dropping.

 

Can someone please explain to me how adding a currency that is chronically manipulated by overt public policy and does not trade at a market price regularly to the basket mix of SDR's could have done ANYTHING but increase the world demand for the dollar? Yet that Oracle of Lansing, Patrick Heller, and his Merry Band of Dollar Doomers thought it was the dollar's demise. AS USUAL, the dollar doomers have it wrong ... yet again. It is getting so tiring to read all this dollar bashing garbage.

Look at the underlying data people, and STOP READING PM-HAWKING WEBSITES!!!!!

 

Well Kurt, they have a solution -- send them all those nasty dollars and they'll send you some PMs. Then when interest rates go up, you, too, can lose your shirt!

 

RMB has been a reserve currency since Nov... almost a year ago. Not sure how that would affect anything today. Also, RMB is still pegged to the USD, so there should be no impact to PM values anyway. It's far more likely that people sold off ahead of tonight's VP debates. Even that is a pointless overreaction to something generally irrelevant.

 

There WERE a series of Fed Governor speeches today, jus' sayin'.

 

I call these kinds of charts a "three-day no lines touch" chart. At every point for three days, the price is lower than it was 24 hours before. These are quite rare occasions. They usually are not a bullish thing. We'll see if the green stays below the red all day and evening.