Silver Monthly Recap for June, 2012: ObamaScare Causes Dollar to Tank

The month started on a Friday, with gold gaining 3.08% to $1,606, while silver fell 2.56% to $27.38 per ounce. The cause of the divergence? Portfolio rebalancing from major institutional investors, who deal more in gold than in silver. The dollar lost 0.58% against the euro that same day, and stocks were down across the board in a big way: the S&P 500 was down 2.46%, the Dow was down 2.22%, and the Nasdaq was down 2.82%.

Week 1

The London Fix Market was closed on June 4 and 5 in observance of the Queen’s Diamond Jubilee. Stocks were mostly higher on these days, with the S&P 500 posting small gains on Monday, June 4 (+0.01%), and larger gains on Tuesday, June 5 (+0.57%). The Dow was mixed, losing 0.14% on Monday, and then gaining 0.22% on Tuesday. The Nasdaq was more reliable, posting consecutive gains of 0.46% and 0.66%. The dollar lost 0.73% against the euro on Monday, but then bounced back by 0.53% on Tuesday.

When the London markets did reopen, silver made a huge surge to $29.36, up 7.23% from its previous close. Gold was up 1.81%, too, as the dollar lost a whopping 0.92% against the euro, closing at 0.7951 euros to the $1. Stocks were up big: the S&P 500 gained 2.3%, the Dow gained 2.37%, and the Nasdaq gained 2.4%.

Gold and silver both posted losses on Thursday and Friday, with gold ultimately closing at $1,576.50, down 1.84% for the week, while silver finished at $28.17, up 2.89% for the week. Stocks outperformed precious metals, with the S&P, Dow, and Nasdaq posting respective gains of 3.73%, 3.59%, and 4.04% for the week. The dollar, despite gaining on the euro on Thursday and Friday, finished the week down 0.66% against the failing EuroZone currency.

Week 2

Stocks continued to rally Week 2, despite big losses on Monday. On that day, the S&P, Dow, and Nasdaq posted respective losses of 1.26%, 1.14%, and 1.7%, while gold gained 0.48% and silver was up 1.63%. For the week, though, stocks and precious metals all gained, while the dollar fell 0.97% against the euro – including four consecutive days of losses, Tuesday through Friday. The S&P 500 finished the week at 1,342.84, up 1.3% for the week. The Dow closed at 12,767.17, up 1.7% for the week. The Nasdaq finished at 2,872.8, up 0.5% for the week. Gold closed Friday at $1,627.25, up 0.85% for the week, and silver finished at $28.66, up 1.74% for the week.

Week 3

Whenever the Nasdaq trails the Dow, it is seen as a bearish sign. In Week 2, both indices posted gains, but the Dow’s 1.7% was much greater than the Nasdaq’s 0.5%. Savvy readers of the tape could have predicted a pull back in equity prices, as the S&P 500 lost 0.58% for the week, while the Dow lost 0.99%. Ironically, the Nasdaq posted a gain of 0.68% for the week, with four up days and only one day in the red. Meanwhile, gold and silver were both down four of five days, and finished the week down 3.79% and 6.45%, respectively. The dollar lost ground against the euro three of five trading days, but still finished up 0.33% for the week.

Week 4

Stocks were down in a big way on Monday, losing 1.6% (S&P 500), 1.09% (Dow), and 1.95% (Nasdaq). On Tuesday and Wednesday, stocks were up across the board, posting gains of 0.48% and 0.9% (S&P), 0.26% and 0.74% (Dow), and 0.63% and 0.74% (Nasdaq). Gold, meanwhile, was up both Monday and Tuesday (0.29% and 0.38%), before pulling back a bit (-0.16%) on Wednesday. Silver was more volatile, posting a 0.34% loss on Monday, followed by a huge 2.69% gain on Tuesday. Silver then gave back most of those gains by losing 2.2% on Wednesday. The dollar was up 0.34% on Monday, down 0.65% on Tuesday, and then relatively flat on Wednesday, losing a tiny 0.02%.

Thursday was a day that will live in infamy for as long as the United States shall stand. Siding with the liberal, Democratic-appointed justices, Chief Justice John Roberts – a George W. Bush appointee – upheld the constitutionality of the individual mandate aspect of ObamaCare. This ruling basically affirmed the federal government’s unlimited power to force people to do anything, or prohibit them from doing anything, so long as the mandates are phrased in the language of taxation.

In the wake of this historic decision, stocks tanked, but after the mid-day sell-off, insurance and Big Pharma stocks surged, lifting the entire market – what does this say about ObamaCare and who it’s really good for? At the end of the day, the S&P 500 was down 0.21%, the Dow was down 0.2%, and the Nasdaq was down 0.9%. Gold fell 0.95%, and silver was down three cents to $26.81. Inexplicably, the dollar gained for the fourth straight day, closing at 0.8037 euros.

Then on Friday, stocks skyrocketed as Wall Street plutocrats recognized the truth about ObamaCare. The S&P 500 was up by 2.49%, the Dow was up by 2.2%, and the Nasdaq gained an amazing 3.3%. Gold also surged by 2.49%, and silver gained 2.35% to close around $27.44. Meanwhile, the dollar absolutely crashed, losing 1.74% against the euro – the euro! — and closing at 0.7898 euros.

Conclusion

For the month, stocks were up across the board. The S&P 500 gained 3.96%, the Dow was up 3.93%, and the Nasdaq was up 3.81%. Gold gained 2.52%, but still closed out its worst quarter in eight years. Silver lost ground again – 2.35% – although it kept pace with the hapless dollar, which fell 2.36% against the not-as-hapless euro. Here’s a prediction you can take to the bank: One of these months, silver will absolutely skyrocket. The dollar won’t.