Is This the Bottom for Gold and Silver?Submitted by Doug Eberhardt on Wed, 06/26/2013 - 23:26
It has been a rough ride for those who have bought gold and silver the last few years as it heads to its biggest quarterly loss in history. We have seen the metals fall from their 2011 highs to their current lows hit today of $1,223.40 for gold and $18.36 for silver. As of this morning, the metals have bounced off those lows with a weaker than expected GDP report and for reasons given below, I believe the bottom is in for gold and silver.
Recap of Gold and Silver Price Activity
On Feb. 14th, 2013 I wrote that I expected the Market Makers to take gold and silver below their 200 day moving averages and they did by mid-April. The price of gold and silver subsequently bounced higher and on May 17th I wrote that this might be a "Dead Cat Bounce" and the gold and silver prices would again test and break their April lows and this was confirmed just last week. I have been very patient to write today's article and know there will be many who try and critique it. But I truthfully don't believe the claims that the Fed will begin to taper as those that do think we are in an economic recovery. And those who are depicting gold and silver as an irrelevant investment can't be seeing the same data I see. In fact, sentiment is so negative that pretty much every major investment bank has lowered their gold price forecasts, including Goldman Sachs. You may recall Goldman Sachs was bullish on gold in 2011, raising their forecast. Just because they all agree on something, doesn't make them right.
The economic data I wrote about on May 9th calling the stock market a bubble and recommending investors dollar cost average out of it, has been confirmed further with today's GDP expectations falling short and yesterday's consumer confidence, durable goods and housing data coming in less than expected. The DOW is presently sitting at 14,760, 322 points lower than the 15,082 May 9th close. The market sometimes has a mind of its own and the DOW is presently up 122 points despite the GDP miss.
The hardest thing to do is to buy when there has been carnage in the streets. But what do Market Makers really do? They like to create carnage and invest accordingly. The name of their game is simply profit, any way they can obtain it. One can look at Apple, AAPL, 5 year charts to see how this popular stock with investors can be moved up and down over time.
From a shorter term perspective, what has really been the difference in AAPL versus GLD and SLV the last year?
Apple's 52 week range is 385.10 - 705.0 (45.37% decline); GLD 119.66 - 174.07 (31.25% decline); SLV 18.19 - 34.08 (46.62% decline).
What's On the Horizon for Gold and Silver?
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