Although gold and silver have been perking up lately, I would say that we are not out of the woods just yet. Similarly, all systems were go in August 2006 (ECU at $3.70), when the NY cartel pulled the plug on gold and silver immediately after the Labour Day weekend. Subsequently, gold and silver plunged closely followed by the shares. ECU has never really recovered thanks to an established shorting scheme, which has also taken down the entire Venture Exchange about 50% from its Fall 2007 highs.

With the major traders returning this week, we shall see if they decide to pile into silver and gold or remain in fear of the FED. Another item to consider is that the U.S. Congressional elections are only about 2 months away and Obama and company massively need a grand slam to keep their power. One thing for sure is that crude oil will not move up between now and November because gasoline prices directly affect voter pocket books.

It will be interesting to see if Obama decides to let the equity markets tank in September so that QE2 can save the day shortly after or if they decide to prop the markets until after the November elections. One thing for sure is that the next few months will be extremely volatile.

If silver can remain near or much above the $20 level by the end of this week and especially next week for confirmation, we will be in decent shape.

Good Luck - VHF