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Opportunity abounds today in both gold and silver investing, but individual investors remain reluctant to get on board.

July 20, 2011 – Opportunity abounds today in both gold and silver investing, but individual investors remain reluctant to get on board.

They remind me of Wiley Coyote, so caught up in trying to catch the Roadrunner that he is oblivious to perils everyone else can see. When his plans inevitably blow up in his face he doesn’t reconsider his purpose but instead forges forward with even greater determination towards an unobtainable goal.

Stocks are the individual investors’ Roadrunner, while gold and silver are plump prairie hens ready for the taking but completely overlooked.

I’d like to focus on silver today because of what Ian Wyatt describes in Seeking Alpha as “an extreme buying opportunity.” Wyatt, the chief investment analyst at Wyatt Financial Research, is highly recognized for his keen market insight and he makes a powerful argument for silver investing today.

Wyatt bases his judgment on the Commitments of Traders report from the Commodity Futures Trading Commission. The report breaks down the “long and short positions of three groups of traders – commercial traders, large speculators and small speculators … [providing] some of the best intermediate to long-term directional indicators available, particularly when an extreme is hit,” Wyatt says. And “currently all three groups are in an extreme.”

Specifically, while speculators are extremely bearish, commercial traders are extremely bullish. The last time those conditions existed was in 2009 and the silver price leapt from $10 to $40. The prospect is even more tantalizing now because “silver is also moving into one of the best seasonal periods during the year.”

In “30 out of 34 years, silver has had a positive return in September,” Wyatt notes. The opportunity is unmistakable but if individual investors remain true to form they will remain bearish until it has all but vanished. Wise investors, however, will start buying now and will be looking for possible dips over the next few weeks for even greater bargains.

I strongly advocate a buy-and-hold strategy over speculation for gold and silver investments, but on rare occasions such as this we get an excellent chance to play it both ways.

Shannon King

Senior Staff Writer – GoldSilver.org

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