The confluence of events that led to the recent scurrilous lows on Sunday night are somewhat dissipated. The corpses of bottom-pickers are strewn about the landscape as a reminder never to push too hard. Now the shorts can start to wring their hands as the scenario transmogrifies. A big factor for the drop in precious metals from early August to Sunday night was the corresponding strength in the US dollar. The dollar rally was predicated on expectations of a rate hike from the Fed. Said rate hike being justified because the US economy is performing at or above the levels the Fed has gone on record as saying it deemed necessary for it to take the pressure off rates. BUT another important factor to remember is that it wasn’t all strength of the dollar, but an acknowledgement of the weakness in certain European and BRIC economies. This is getting more traction now because the market learned years ago that the US can only do so well when the rest of the world is hamstrung. Now US rate hikes are put on the back burner and Yellenke has another arguably valid reason to maintain the status quo. She gets another reprieve and the can gets kicked a little further down the road. And with Election Day right around the corner, it is reasonable to expect no rate moves until December at least. http://www.kitco.com/reports/MIT1007.pdf