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Gold and silver prices continue to struggle under the strength of the US dollar, which is benefitting from the crisis in Europe and investors are taking advantage of it.

November 25, 2011 – Gold and silver prices continue to struggle under the strength of the US dollar, which is benefitting from the crisis in Europe and investors are taking advantage of it. A reasonable floor has been established in world markets, slowing declines that began just over a week ago, but the prices of gold and silver are not reacting quite yet. When the war between the dollar and the euro concludes, which will likely take a few weeks at least, we will see the generous appreciation in gold and silver that one expects a in a debt crisis, a floundering market, and currency wars.

A Canadian billionaire Eric Sprott, CEO of Eric Sprott Management, has filed a prospectus for a purchase of $1.5 billion worth of silver bullion. That’s a lot of silver. Market analysts spend a lot of time talking about gold and meanwhile, to an extent, ignore the activity of silver. Sprott’s move represents a very large player in the market taking a big piece of the pie. Sprott’s order, which will likely be filed in December, will significantly affect the amount of silver available for purchase on the open market.

This move by the Canadian billionaire echoes the activity of central banks this past quarter. Recently news emerged that central banks bought more gold in the third quarter, and are on track to purchase more gold in the fourth quarter, than they have bought in the past forty-years. Following the September correction, central banks swooped and in started buying up precious metals at multi-decade highs. This is a signal as to where the market will be headed in the coming months as third quarter reports came out just over a week ago and central banks are major players in the precious metals market.

Eric Sprott is just following the trend line and making the smart trade by purchasing silver. Central banks know what’s going on and the relative suppression of precious metal prices that are occurring right now may reflect the best buying entry point that we will see for a long time. Both central banks and investors are reacting to the clear opportunity by purchasing gold and silver, front running the market, which will reflect this activity in the coming months.

Shannon King

Senior Staff Writer – GoldSilver.org

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