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Gold and Silver Prices Gain, Defying Correction

Gold and silver prices turned positive in overnight trading representing a display of gold’s status as a safe haven asset amid the current market turmoil. In the past several weeks, investors have questioned both the fundamental dynamics of the gold bull market as well as gold’s safe haven status. Though gold and silver prices have taken a significant dip in the current correctional period, we are still in a protracted bull market for both gold and silver and that fundamental will carry through.

Though the correction continues, we are currently in what amounts to temporary reprieve from the downward motion of prices. After an eleven-year bull run in the gold market, and even more substantial percentage growth in the silver market in some timeframes, the precious metals are overdue for a correction to the downside in order to maintain a healthy and vibrant bull market. We are currently in that phase and gold and silver prices will continue to reflect that.

The correction will be strong and protracted. The motion thus far, which has brought the price of gold down below $1,600 per troy ounce and the price of silver below $28 per troy ounce, has caused some analysts and investors to question the fundamental strength of the bull market. Of course, these projections are far off the current actual market movements, but such a protracted bull market will necessarily cause a protracted correction and many investors will miss that dynamic.

When gold and silver prices continue their correctional path, which they will over the coming weeks, surely there will be more noise that the bull market is over, that gold and silver have entered a bear market, and possibly worse. These of course are all incorrect at best. The period of time we’re coming into represents one of the best buying opportunities for gold and silver that we have seen in the past two years.

Investors in the know are not unloading at this time or lamenting the precious metals markets; they are preparing to buy or increase their positions in gold and silver. Central banks are buying at multi-decade highs and major investment banks in the US including Goldman Sachs, Credit Suisse, and Citi are all buying and projecting higher spot prices for gold and silver by the year’s end.

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