With all the uncertainty in the markets these days and it being next to impossible to predict what comes tomorrow, I would like to offer a long term view of Gold, Silver and the Dow.
There are two Scenario's that I hold quite possible and no third. The preferred one is:
•DOW starts to move down from the 15,500 level and heads to 11,500. The downward crash along with some black swan event drives people into P.M's (Gold and Silver).
•With stocks crashing, people rush to buy P.M's driving Gold's price to $2550 and Silver's to $76.
•The Fed and the US Government takes drastic measures to do ANYTHING to prop up the falling markets. They know if it goes down, it's going to be the Great Depression times 5.
•With Fed and Government intervention and manipulation the markets start to move back upwards.
•Everyone and their uncle is investing in the stock market. Your Taxi driver will give you stock advise. The stock market is the party that never ends.
•Gold falls to around $1175 and Silver falls to mid $20's (small possibility of $17 also).
•Dow is at 19,250 and there is euphoria in the air. The public thinks America is back in it's Golden Age.
•The Fundamentals finally kick in. Dow keeps on falling month after month, year after year till 7500.
•Meanwhile Gold and Silver have had a field day. Gold is somewhere $4,000+ and Silver is near $ 135. (These numbers are vague)
•The time to reenter the stock market is when the Dow is around the 6500 - 8500 region.
•The Dow and the American Economy after about 4/5 years of downtime and serious soul searching and overhaul finally start to recover and Dow moves back up to an eventual high of 30,500+.
•Gold down to $2150, Silver down to $62.
•These forecasts should last about 12 years.
The second scenario is pretty much the same as the first, the major difference being DOW's decline to 7500 starts from the 16,000 region from the present rally. Gold and Silver will in this case rise to $2550 and $76 but then liquidity concerns from the falling markets will put pressure on the P.M's as well and they start declining along with the DOW.
As of right now: the Dow is at 15,112, Gold is at $1343, Silver is at $21.2.
Disclosure: I am long SLV.