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Be on the alert for what could be a very rare buying opportunity for gold and silver.

August 03, 2011 – Be on the alert for what could be a very rare buying opportunity for gold and silver. Nothing of any real significance is about to change, but recent history suggests some kneejerk reaction will follow the final curtain of the debt ceiling passion play.

It would be wonderful if at the close of the final scene Wall Street banks rushed in to save the day for those who so recently saved their necks, but let’s be real. This play is in fact a comedy, and the joke is on us. What will follow is only more posturing and mud slinging while the economy grows steadily sicker.

Still, I expect that somehow Wall Street, with assistance from government spin doctors, will manage to whip up enough deluded optimism to create a “correction” in precious metals. It might even be quite deep, but it definitely will not last long.

Silver, in particular, is ripe for opportunity. Equity bulls find the metal’s notorious volatility makes it easy to frighten investors away from the market. But that volatility had a lot to do with the CME’s ability to manipulate prices by changing margin requirements, and now there is competition.

Just a little more than a week ago Hong Kong Mercantile Exchange (HKME) began offering Asian investors an alternative to the CME for trading silver futures with contract minimums one fifth those of the CME. “The new contract will enable buyers and sellers in China to trade effectively with their counterparts across the world, while at the same time allowing investors to gain exposure to silver-price movements and broaden their investment portfolio,” explains HKME president Albert Helmig.

In other words, the exchange is facilitating movement away from dollars to hard assets throughout the Asian markets. And although trade on the HKME is currently in dollars, the exchange plans to allow trades based in yuan in the not too distant future.

It no longer matters what our government does because nobody is listening any more. The world is too busy coming up with real solutions to the problems we have caused. In the process the doors have been thrown wide to a vast new market of gold and silver investors.

In the face of what will unquestionably become an unprecedented surge in investment demand, any buying opportunity presented by “corrections” in gold and silver prices will be short-lived – and probably will not be repeated for a very long time.

Shannon King

Senior Staff Writer – GoldSilver.org

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