September 14 2011: The prices of gold and silver were subdued for so long but no more, greater swings in metals forecast, a new scenario today for this current phase of the metals market, new bumps in the road to look out for, purchasing power robbed with the printing of money, deficits out of control.
In the case for gold and silver, it has been go long and stay long for 11 years. During that period great gains have been made during what was the formidable first phase of the gold and silver bull market. Gold was $260.00 and silver was $3.50. Some stocks rose from $4.00 to $86.00, some from $0.80 to $42.00. This performance in spite of gold and silver suppression by the US government. In their desire to keep gold and silver subdued all the government really accomplished was to offer an opportunity for buyers to buy at lower prices than they normally would have been able too. In that process buyers have been able to stay ahead of inflation and many have made large profits. We have convinced almost all not to try to trade these markets, because they have not been professionally trained to do so. That concept has worked quite well and will continue to do so. The problem with novice trading is that if you get out you may never get back in. You must outsmart the market ignoring the gyrations and stick to the long-term objective. This bull market in gold and silver, now almost 11-1/2 years old will probably last another 5 to 10 years even if the system collapses. In the end our formula has worked well and avoided commission costs, something we are acutely aware of having been in the brokerage business for almost 30 years.
Each phase of the bull market is somewhat different. It wasn’t all that long ago that we predicted swings in gold prices of $20 to $30 to $100 a day in gold, than $0.50 to $2.00 in silver swings that we have just experienced. Next it will be $100 to $200 to $400 swings daily. Long-term investors may not like volatility, but traders sure do, and that draws more players into the game. A good example is the past few weeks where we saw $200 swings in gold and $5.00 swings in silver. The gold and silver shares, having languished for three years have started to come to life. They have been victims of shorting and naked shorting by the PPT and hedge funds, which appears to be lessening. We also see more institutions as buyers of these issues. Brokerage firms have advised their brokers to use the ETFs, GLD and SLV, as vehicles to play the gold market, when they do not have the physical gold and silver they say they have. They are an accident waiting to happen. The unexpected downdraft mining shares experience three years ago was caused by institutional de-leveraging of positions that were 100 to 300 to one. Even banks got up to 70 to one. That has changed with leverage at 10 to 30 to one and almost all of these participants are either out of the sector or short. The scenario today is totally different and explosive. ........
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
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