Time to Buy Gold and Silver 20 comments
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Gold made a huge run from $650 to $850 during the back half of 2007. After this run, gold corrected and consolidated around the $800 level and support at $790 proved to be a very solid floor from which the second run was launched that took gold from $800 to over $1,000. Fast forward to 2008 and gold’s most recent correction has seen the price fall back to this very important floor once again.
On three separate occasions during the past month, gold has tested this support level and has bounced off with vigor. We also see in the chart below that gold’s stochastics have bottomed and are turning up. From a technical point of view, it looks like gold may have found its floor.
Fundamentals are also pointing toward higher prices, as we head into the Indian wedding season. The latest statistics are showing extremely robust gold sales, with imports up 45% during August. But it is not only India that is showing signs of surging demand for the precious metal, Abu Dhabi reported gold sales were up 300% during August. We also have news of significantly lower supply coming out of the world’s largest gold producers. Rising demand and declining supply always equals higher prices.
With inflation out of control and the dollar extremely overbought, I anticipate a rally in precious metals and energy over the next several weeks. With the economy coming out of a consolidation phase and looking ready to continue downward, we should a powerful spike at funds rush back into commodities and out of financials, housing and blue chips.
I admit to being caught off guard in terms of the severity of the recent correction. It seems likely that the government and banks are colluding and using paper contracts to massively short precious metals and drive the price down. They don’t want to see an alternative currency gaining popularity and a rising gold price confirms fears that inflation is much more severe than their statistics suggest. For more on this topic, I recommend Ted Butler’s “Smoking Gun” article, as well as Jason Hommel’s “Tribute to 7th Grade Math.”
I believe the gig is up and that market forces will pull precious metal prices back to levels dictated by true supply and demand. Shorts will need to be covered and huge sums of money will be looking for a “safe haven” as more banks fails and the
Disclosure: None
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This article has 20 comments:
His disciples asked him, "Does then one know on what day he will die?"
"All the more reason he should repent today, lest he die tomorrow."
(Talmud Shabbat 153a)
Nobody can time death or the market. Dollar cost average if you must... but get into precious metals while they are down. If they go down a bit lower buy some more. If they start going up it may go up faster than you can buy in. Have you ever been in a business meeting and missed a day in the market?? This is not one of those market moves that you want to try to time or worse miss. This is a decision that can make or break you in the next 24 months....
First..holders of real silver will simply not sell at paper prices. This is the case now. Go out today and TRY to get your hands on the real stuff..I don't mean promises....I mean HANDS on. This is the precursor of a REAL second market developing..where those who need physical silver will start dealing only with a market that can legitimately provide it.
Second...while this second market is forming..the REAL market...someone will at what looks like a large paper loss DEMAND delivery..and then the jig will be up. $12.50 silver is NOT $12.50 silver unless its deliverable.
In any case...silver and gold are huge buys. Those afraid to prchase now are not going to make much later on..but then they never do.
Does it look like governments are adopting fiscal prudency?
Are real interest rates positive again?
Are we experiencing genuine contraction in money aggregates/credit?
Are we confident in the financial system? Never mind world peace?
Can you trust banks / governments for wealth protection?
And is the physical market suffering from over supply?
Sell paper when it bounces.
Now the Kitco chart ( www.kitco.com/charts/l... ) shows today's 'government and (bullion) banks' attack on gold . . . and it is nearly exactly the same as Friday's attack. Time and amount overlay each other! Check tomorrow, and I'll bet there will be a third line overlaying the other two, or with about the same amount of attack on tomorrow's gold prices.
While it is my first reaction is to draw a target on someone who seems to be whining about manipulation, all intelligent people I know who have taken the time to study the issue in terms of the gold and silver markets have come to the same conclusion: sure looks like it.
www.rapidtrends.com/bl.../
Are the silver short 'conspirators' controlling not only the relatively puny silver market but all OTHER markets? lol.
And the nonsense about not being able to actually buy silver at these prices. Priceless inanity! Try Kitco, Apmex, Monex for RETAIL buys at 3 to 5% above spot as always, or buy a contract and take delivery. Since there have been ZERO failrues to deliver on the Comex or LBME or any other major bourse at the contracted price I think you'll get your silver.
Especially since there is estimated to be approx. 20 BILLION, yes 20 Thousand MILLION ounces of the stuff above ground in hoards including CHina, India, CBs, stockpiles, jewelry and silverware.
Then of course the highly detaield Fortis report shows that current silver production is approx 900 million ounces annually mining/reclamation, of which only approx 600 to 700 million is consumed. (ANd some of that consumption will get reclaimed).
But Nooooo. It just CANT be economic fundamentals, demand destruction, commodities collapse, equities and hedge funds going under and liquidating ALL assets, global recession, etc etc etc making silver go down.
Must be the conspiracy cabal! LOL.
Perhaps after the Election will be THE time to "back up the truck", at least FWIW it's the way I see it. You could be well spot-on though. The
degree of risk is certainly reduced and can't be hammered much lower. I simply don't give a frog's fat *** what Jon Nadler of Kitco fame says with skepticism about the numerous "back up the truck" alerts to come from other analysts. At times, he's too narrow-minded, despite his excellent credentials. I used to have respect for Gartman, but he apparently suffers from the same when he bailed out of gold. One thing is certain.. This is a coiled spring ready to be triggered, especially in Silver! I'm holding tight, using NO margin on anything Ag/Au, and I'm having no problems staying asleep at night. I'll be richly rewarded and so will those who do the same. Gold and Silver bugs who are minus margin and plus physical will indeed get the last laugh!
Have you tried...I know you have not...then you would realize to pay cash up front and wait for delivery for some undisclosed time (still waiting for delivery are you?)...that is as bright as a three watt bulb....as far as taking delivery of 1000 oz bars..thats debatable...ask the Hunt brothers. Oh ...and look at the fortis report again....I think you left out a key demand....and as of last week COT most shorts in silver have not covered (hm... could they be so large as to be trapped?)some people...how foolish ...Mike L please use spellcheck before I have to suffer through another of your posts. I could go on but that would be a waste of time. Thanks, really appreciate it.