Blow Off in Progress but ‘Launch Phase’ Confirmed
By: Gary Tanashian
SilverSeek.com
Thursday, April 21st
On March 4 we reviewed the technical reasons why the gold sector was launching as opposed to blowing off. This, after articles began appearing calling the rise to that point a doomed parabolic blow off using daily charts. Those calling it a blow off were confused; silver in spring 2011 was a blow off in the terminal sense. But when a parabolic move comes off a bottom, it is an impulsive thrust to change the trend, possibly ending the bear market.
We have long noted that gold is the first mover to a new inflationary phase, as the previous deflationary backdrop gets played out. That is exactly what happened, even though the silver miners have made stunning strides in leading the exciting up move in silver that is currently in process. Silver, in taking over leadership from gold would confirm an inflationary phase. Gold is monetary and silver is an industrial commodity with monetary aspects as well; i.e. it is more positively correlated to inflated economies making the silver-gold ratio a sensitive indicator to inflation.
Now, with silver getting out of the barn we see energy, base metals and emerging markets also hoofing it into the light of a potential new inflationary phase, AKA a new ‘inflation bull’ market. Oh and let’s not forget the chickens… they are coming home to roost, right at the Fed’s doorstep (conveniently, right into next week’s FOMC meeting).
The Rest…HERE
