Gold and Silver Rally Fuel

Yesterday saw gold and silver reverse off their earlier lows. Silver pushed higher due to the news that the SEC cleared Barclays' silver ETF for launch. It should start trading today under the symbol SLV.

Gold rallied because Ben Bernanke pushed the dollar down a flight of stairs, giggling like Richard Widmark in Kiss of Death (the brilliant 1947 version, not the David Caruso remake). As my friend and co-worker Jack Crooks noted in his Black Swan Currency Currents today ...

Fed Chairman Gentle Ben Bernanke hit the dollar pretty hard yesterday during his
testimony before the Joint Economic Committee of Congress:
1) The Fed may pause no matter what the data says
2) China should let its currency run
3) The deficit is a danger

Jack concluded that "Gentle Ben handed the dollar bears plenty of ammunition."

Since gold and the dollar sit on opposite ends of the See-Saw of Pain, when the dollar tumbles, gold heads higher. Gold had its head stuck in the toilet earlier in the morning, but it recovered nicely as the dollar suffered a swirly at the hands of currency bullies.

So are gold and silver out of the woods? Ah, if it were that simple, amigos. True, I gave my Red-Hot Canadian Small-Caps subscribers a silver recommendation late yesterday, which they'll be able to act on today. But that was a particularly strong stock. Most silver stocks are still in a downtrend, so we're still in "wait-and-see" mode.

Check out my new gold and energy blog at MoneyAndMarkets.com