LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Silver Ready to Breakout - Technicals and Fundamentals Suggest $50/oz in Early Autumn



-- Posted Wednesday, 31 August 2011 | | Disqus

Gold and silver have fallen after yesterday’s gains due to the very poor consumer confidence data and Federal Reserve murmurings of further monetary easing. Gold is trading at USD 1,792.50, EUR 1,245.10 , GBP 1,098.30, CHF 1,471.50 and JPY 137,624 per ounce. While silver is trading at USD 41.21, EUR 28.53 , GBP 25.31, CHF 33.33 and JPY 3,155 per ounce.


Gold’s London AM fix this morning was USD 1,826.00, EUR 1,264.19, GBP 1,121.14 per ounce. Gold fix was higher than yesterday’s AM Fix which was USD 1,791.00, EUR 1243.49, GBP 1097.56 per ounce.

Gold remains less than 5% from its record nominal high of $1,913.50 per ounce while silver remains nearly 20% below its record nominal high just below $50/oz.

Gold has stolen the limelight from silver in recent weeks with gold reaching a series of new record nominal highs.

But silver has been quietly consolidating after the sharp falls seen at the end of April and in early May when many claimed the silver ‘bubble’ had burst.

Media coverage of silver remains nearly nonexistent which is bullish from a contrarian perspective.

Technically silver is looking better by the day and is now trading not far above its 50 and 100 day moving averages (see chart above).

Today the 50 day moving average is trading at $38.70/oz and the 100 day moving average is trading at $38.74/oz. The 50 DMA is rising after recent price gains and looks set to cross the 100 DMA in the coming days. This will be a bullish technical signal.

Silver’s sell off was very sharp but volatility and a correction was expected and warned of once silver reached the nominal inflation adjusted high of $50 per ounce.

Value buyers continue to accumulate silver bullion. Jim Rogers, one of the most prescient investors of recent times and who arguably has a better track record than Soros in recent years, remains bullish on gold and particularly silver.

A tiny minority of retail investors has begun to look at silver, but it remains largely the preserve of the smart money, a very small amount of people in the US and Europe concerns about currency devaluation and store of value buyers in Asia.

There are many factors that strongly suggest that silver remains a prudent buy and diversification today.

But there are three key metrics which strongly suggest that silver remains far from a bubble if not undervalued.


The first is silver’s real price today adjusted for the inflation of the last 31 years. Silver’s real high in 1980 was $130 per ounce – more than double the price today (see chart above).

The second is the gold silver ratio which has averaged 15 to 1 throughout history due to geology and the fact that there are 15 parts of silver to every 1 part of gold in the earth’s crust.

Gold Silver Ratio – 40 Year (Quarterly)

Silver, unlike gold, is an industrial metal and a very significant amount of all the silver that has even been mined has been consumed, like oil, since the dawn of the industrial revolution in the 19th century.

Most analysts with a long term view believe that the ratio is likely to revert to the mean of 15 to 1 in the coming years.

The third metric is comparing silver’s current bull market to that of the 1970’s.

Silver has risen by a factor of 10 in the last 9 years – from near $4 in 2001 to over $41 today.

In its bull market from 1971 to 1980, silver rose by over 3,199% or by a factor of more than 32 in just 9 years culminating in the blow off top in 1979.


Today, the physical supply of silver bullion is much less than in the 1970’s. Also there is the ‘Asian factor’ and 3 billion people with growing incomes, many of whom see silver as a store of value against currency depreciation.

Demand for silver in Asia has been increasing and in China alone silver demand is increasing from a near zero base. The demand was not present in the 1970’s.

Were silver to replicate the performance of the 1970’s it would have to rise 32 times or to $130/oz (32 X $4.05).

Interestingly, $130/oz is also silver’s real high from 1980.

Our long held belief that silver could reach the real high, inflation adjusted, of $130/oz remains. However price forecasts should always be taken with a pinch of salt and silver’s value is as financial insurance and a store of wealth that cannot be debased.

For the latest news and commentary on financial markets and gold please follow us on Twitter

NEWS
(Gallup) -- Americans Choose Gold as the Best Long-Term Investment
http://www.gallup.com/poll/149195/americans-choose-gold-best-long-term-investment.aspx

(Reuters) -- Gold edges down; eyes on Fed cues on stimulus
http://www.reuters.com/article/2011/08/31/us-markets-precious-idUSTRE7781Q420110831

(Bloomberg) -- Gold May Drop as Rally on Federal Reserve Minutes Prompts Investor Selling
http://www.bloomberg.com/news/2011-08-30/gold-may-climb-as-fed-minutes-weak-consumer-confidence-boost-haven-demand.html

(CNBC) -- Italian Town Mints Own Money to Fight Austerity
http://www.cnbc.com/id/44322945/

COMMENTARY
(Forbes) -- U.S. Elites Begin To Confront The Paper Dollar
http://www.forbes.com/sites/ralphbenko/2011/08/29/u-s-elites-begin-to-confront-the-paper-dollar/

(Money Morning) -- Why Gold Will Replace U.S. Treasuries as the World's Last Risk-Free Investment
http://moneymorning.com/2011/08/30/why-gold-will-replace-u-s-treasuries-as-worlds-last-risk-free-investment/

(Business Insider) -- Gerald Celente Disses Roubini After Moving 100% Into Gold
http://www.businessinsider.com/gerald-celente-im-now-100-in-gold-roubini-is-wrong-2011-8

(GoldSeek) -- Can we Trust Government Statistics on the Economy?
http://news.goldseek.com/GoldSeek/1314734058.php

(King World News) -- Stephen Leeb - Gold Skying Because of Bernanke Desperation
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/30_Stephen_Leeb_-_Gold_Skying_Because_of_Bernanke_Desperation.html

(Speculative-Investor) -- Steve Saville - Gold: The Big Picture
http://www.gold-eagle.com/editorials_08/saville032409.html

China punters sway gold market
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=114736&sid=33564191&con_type=1

Gold’s Just Going to Run on Ahead and Price in QE3 for You
http://blogs.wsj.com/marketbeat/2011/08/30/golds-just-going-to-run-on-ahead-and-price-in-qe3-for-you/

GoldCore

United Kingdom:
No. 1 Cornhill
EC3V 3ND
UK

Ireland:
14 Fitzwilliam Square
Dublin 2

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

E mark.obyrne@goldcore.com
W www.goldcore.com

Twitter, Facebook, YouTube, LinkedIn:
www.twitter.com/goldcore
www.facebook.com/GoldCore
www.youtube.com/GoldCoreLimited
http://www.linkedin.com/pub/mark-o-byrne/5/5a3/b43

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors’ interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is regulated by the Central Bank of Ireland. The provision of precious metal product or service does not require licensing, authorisation, or registration with the Irish Central Bank and, as a result, it is not covered by the Irish Central Bank's requirements designed to protect consumers or by a statutory compensation scheme.


-- Posted Wednesday, 31 August 2011 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.