-- Posted Tuesday, 23 August 2011 | | Disqus

A few weeks ago the suggestion that gold is in imminent sight of $2,000 an ounce and that silver would pass its April-high of $50 would have seemed pie-in-the-sky.

But not this week, it is a simple extrapolation of a very sharply rising trend line and would require nothing more than a repeat of the price advance of the previous week. Incredible but true!

Besides when we noted that gold appeared to be going parabolic last week, it did so and this is merely an extension of this trend (click here).

Short squeeze

It was interesting to read Bill Murphy from the gold market conspiracy theorists say last week that the gold cartel’s hold on the marketplace has broken down in the past few weeks. That explains the parabolic surge in the gold price last week, and it gives no reason to think it is going to stop anytime soon.

Gold and silver prices always have had and always will have price corrections in this bull market. But that could easily take us to $2,500 and $70 an ounce before there is a major reversal.

That would be scary for those buying now but merely confirm the bullish long-trend further for those who have been following precious metals for the past decade. We are at the start of a price spike and nowhere near the endgame for precious metals.

Reversal or not?

What would cause the gold and silver market to reverse? Well there is still the high probability of a financial market implosion like 2008 coming up and that also took precious metals down into a sharp down-phase that took a year to recover.

But that may only come after gold and silver have lured in some more buyers. A big dip like in 2008 would be a major buying opportunity but not of course if you had put everything into precious metals now and took a big loss.

It may be different this time. Gold halved in 1975-6 only to go almost straight up in an eight-fold gain by 1980. Let us hope it is the same this time for precious metal investors. Should you invest now? That is for you to decide.

But if you want actionable investment ideas then our subscription newsletter is where we offer this (subscribe here).

-- Posted Tuesday, 23 August 2011 | Digg This Article

About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in 1999 to complete his first book, a history of the Bovis construction group.

Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.

Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.

He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.

Order my book online from this link

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