Just as gold has remained relatively stable over the past couple of weeks–trading in a range between 1500 and 1550–, silver has done the same–trading in a range between 34$ and 38$. Despite this relative stability many are weary of the future direction of the precious metals. At the forefront of such worry is the recent statement by Federal Reserve that their private cartel will not engage in any further quantitative easing programs. While this takes the possibility of Q-E 3 off the table in theory, many intelligent statesman are aware that the Federal Reserve’s track record for correctness and follow-through is horrible. For example, many remember Federal Reserve Chairman Ben Bernanke stating in 2005 that he felt it was highly unlikely that real estate prices were going to decline. In 2011 it is easy to see that Bernanke really missed that one.

Much of the story with precious metals this past week centered around bouncing oil prices. While gold did not correlate with oil prices so much this week, silver was a different story.  Silver prices preformed strikingly similar to oil prices this past week as both commodities seemed to bounce and fall with great symmetry. Many financial analyst point to the correlation in prices as a result of silver’s industrial presence and the fear of an economic slowdown. The real story this week, however, was heavily discussed by financial analyst Peter Schiff. Schiff pointed out that the DOW to gold ratio breached an important support ratio of 8:1, as the dow slipped bellow the 8 to 1 ratio during Friday’s trading. Schift believes that while the short term may bring some deflation, the long term can only bring inflation–which means higher prices for gold and silver in the long term. In fact, Schift believes that the only reason why the dollar has risen so sharply over the past couple of weeks is because of habitual trading–as people still percieve the dollar to be a safe bet in times of economic uncertainty. I tend to agree with Schift, however, only time will tell if we are correct.  So for those who are in need of liquidating their gold in the short term, now may be the best time to sell before a mini-deflationary period emerges.