In last week’s Metals, Mining, and Money, Jeff Clark estimated that given the magnitude of the correction that started last September, it may take until May 2012 for gold to reach a new high. This week let’s take a look at how long it may take for silver to rebound.
It’s a commonly known fact that silver is more volatile than gold. Already in this decade, silver has risen by a factor of 12 from its ten-year low ($48.70 vs. $4.07), while gold has seen about a sevenfold climb ($255.95 vs. $1,895).
This volatility – as you’ll see in a minute – holds for corrections as well. On average, silver’s retreats have been deeper and longer than gold’s. The three big gold corrections we looked at last week averaged 22.8%. Take a look at the three biggest for silver, along with how long it’s taken to recover and establish new highs.
Read more at http://investormind.blogspot.com
One of the main reasons why we have been not so focused on paper representations of real currencies (i.e., gold and silver) is that ever since the MF Global debacle, in which it became all too clear that if physical gold can be “hypothecated” via conflicting ownership, then there is no way that paper versions of precious metals are viable and indeed credible. After all, the only real owner at the end of the day is the certificate holder, which as we have explained before, is none other than DTCC’s Cede & Co. Good luck collecting when the daisy chain of counterparties starts falling. Which leaves physical. And for a good sense of what the “real” price of the metal is, not one determined by institutions whose interest it is to preserve the hegemony of paper, one can either try to procure gold and silver at a retail merchant, or one can look to the premium of a dedicated physical ETF over spot. Such as Eric Sprott’s PSLV which as of today is trading at an all time high premium of 30%! In other words, someone is willing to pay up to 30% over spot for the right to be closer to the physical metal than merely have a paper claim on a paper claim (pre hyper rehypothecation and what not). Incidentally the last NAV premium over spot record was back in April 2011 just as silver went parabolic and the entire commodity complex experienced the infamous May 1 takedown when it collapsed by $8 dollars in milliseconds on glaringly obvious coordinated intervention. Said otherwise, like back then, so now there is an actual shortage, manifesting itself in the premium. And while last time its was the price plunge which eased supply needs, we are not so sure how one will be able to spin a collapse of the current, far lower paper silver price.
Continue reading at InvestorMind.
Investment letter writer Dennis Gartman has declared that he was wrong about gold.
In his daily investment letter Thursday, Mr. Gartman officially reversed his outlook for gold, saying he now views the precious metal as being in a bull market.
The new position follows a month where Mr. Gartman was the subject of some high-profile name calling from fellow investment letter writer, Peter Grandich. Mr. Grandich called Mr. Gartman “one of the Three Stooges” of gold forecasting after the latter declared that gold was officially in a bear market (if you’re wondering, the other two accused of being in that trio are Jeff Christian of CPM Group and Jon Nadler of Kitco).
Mr. Gartman’s reversal comes as he has failed to buy back gold below the price he sold it at a few weeks ago. He said that now that gold priced in euros has taken out its previous interim high, he sees the metal returning to a bull market.
Continue reading at http://investormind.blogspot.com
I was lucky enough to catch Jim Rogers on the phone again for a few minutes to discuss MF Global’s affect on the commodity markets, the direction of the U.S., plus an emerging southeast Asian country which presents an “enormous opportunity”.
In regards to the recent MF Global collapse and it’s impact on commodity markets Jim said,“MF Global is causing forced liquidation right now, but longer term people will forget about it. People still need to trade wheat, they need to trade oil. In the longer term it will be like many other disasters in markets, it will be a blip–an unfortunate blip.” Jim added that, ‘This event will be another push to move commodities business away from Chicago and towards Asia.”
Read the full article at http://investormind.blogspot.com
Interview with James Turk, founder of Goldmoney Foundation talks about potential for gold to go to $11,000 by 2013-2015.
Watch the full interview at InvestorMind.
My Good Experience in investing MEG stocks.
It’s all here at stock-picks-meg-looking-forward-to-it
What do you kmow about the rule of 72? It’s about financial education. It’s knowing/computing how to double your money! The secrets of the wealthy!
Read more at http://thegetwealthy.com
(1) Earn more than your obligations.
We all have bills to pay. Subscriptions to maintain. Children to send to school. You will have a hard time saving without sufficient earnings or extra cash in-flow. You build surplus faster by earning more and spending less. [read more]