Below is a one year chart of 'Light Crude' which is the dotted line and Silver which is the solid black line
Since September of 2010, they have traded fairly close to one another, especially the first week of May when they both crashed down almost the exact same percentage... It goes to show you that whenever a commodities price is determined by the paper market, just about anything can happen. Especially if the Comex determines that too much speculation has occurred with the commodity.
I am a believer that this administration would like to put a cap on Oil so the public does not get monetarily 'squeezed'. It's already bad enough with unemployment at 9% and you tack on $4+ gas and rising food costs. If this continues, our president may not look so good going into the fall of 2012. The republican party will have a 'field day' with the economy in dire straights, high energy and food costs. The bottom line is that they will ask 'are you better off now or before Obama took office?' Obama can state that the stock market is back up.....but that does not help everyone. It does help the too big to fail banks...
If Silver and Oil continue to trade close to one another, we will most likely see a flat summer / trading range. Especially if there is pressure to keep the Oil market down to keep gas prices lower. I personally think that it is a temporary trend and that Silver will break to the upside in the fall months after trading flat through the summer.
I am a believer that this administration would like to put a cap on Oil so the public does not get monetarily 'squeezed'. It's already bad enough with unemployment at 9% and you tack on $4+ gas and rising food costs. If this continues, our president may not look so good going into the fall of 2012. The republican party will have a 'field day' with the economy in dire straights, high energy and food costs. The bottom line is that they will ask 'are you better off now or before Obama took office?' Obama can state that the stock market is back up.....but that does not help everyone. It does help the too big to fail banks...
If Silver and Oil continue to trade close to one another, we will most likely see a flat summer / trading range. Especially if there is pressure to keep the Oil market down to keep gas prices lower. I personally think that it is a temporary trend and that Silver will break to the upside in the fall months after trading flat through the summer.
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