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The manipulation of prices during the US trading window is fairly apparent, and with more people paying attention to the metals, particularly silver, the duplicity of the markets is becoming more accepted fact, as people see it with their own eyes.
As for silver, even though it was heavy pressed today after a European and Asian session which saw it soaring, a spike up to 40 intraday is still possible, but our target of 37.50 remains intact before any substantial correction or consolidation sets in.
We might also wish to consider that there may be no real correction, just a pause and a move higher. This is what happened after the first pause after the initial breakout, leg 2 in our silver chart shown below.
The Fed is continuing to add liquidity to the markets, and with light volumes it remains relatively easier to subsidize a soft lift to the market throughout the day.
Nice volatility for short term trading, but otherwise a treacherous market.
The weakness with this US Dollar DX index is that it is highly weighted to the developed economies of Europe and Japan. As such it may not reflect erosion of dollar purchasing power vis a vis the BRICs, and external measures such as gold, oil, and silver. It may be masked by the mutual weakness of central banks all inflating their currencies in unison.
This is what the Federal Reserve desires: to repair its economy and unpayable debts by expanding its monetary base while exporting much of the negative effects of such monetary inflation to the rest of the world, keeping things relatively stable to maintain confidence in their paper. And this is why the central banks attempt to control the price of less manageable currencies such as gold and silver. Silver is the most problematic because its supplies are difficult for the banks, as they have none of their own, and the world has largely depleted its discretionary strategic stockpiles of this metal. Long term price suppression breeds underinvestment and the inevitable shortages of real goods.
The support levels are as marked and fairly obvious. With the dollar index around 76.28 today it is threatening to break down out of the chart formation. Lateral support around 74 and 71 is fairly strong.
Rather than rallies through economic vitality and recovery, the dollar rallies have been marked by relative declines primarily in the euro on their sovereign debt problems. It is almost like a couple of drunks leaning on each other for support, except that the US is picking the Eurozone's pockets while they do it.
