There is a lot to say about gold and silver, at the moment, but let’s focus on silver right now. If we turn back the time to September 2010, we remember that silver was at $20 and then between that month and May 2011, it jumped three times over, but what is even sadder yet is that many investors were never able to profit from that leap. For those who were not able to yield anything at that time, don’t worry, it’s coming again by the end of 2012. It will most likely not attain those previous highs, yet it will probably get to $65 which means it will roughly double its price as of now. At the beginning of 2011, silver plummeted to $25 but is slowly working its way up and is playing at $33. Despite this, many investors have turned away from silver due to the menace of Euro nations’ economic evasions, banks proclaiming they are insolvent, and other elements which have also influenced investor sentiment towards silver.
The problem here is that central banks will react eventually. Do not think, for one minute, that they will go down without a fight! Remember that we are going into an election season and President Obama is en route to do everything in his power to make the economy seem as stable as possible. A third round of quantitative easing has already been injected in a rather clandestine style. This suggests rather strongly that the presumption for silver as well as gold, but on a less significant level, will be incredibly positive. Stocks will persist as being a more volatile trade during the year unless we encounter a deflationary sovereign default that is uncontrollable and wipes out key banking institutions. But, lo and behold, as apprehension recedes, gold and silver will rebound to greater stratums by the summer of 2012. And, of course, we are happily waiting for another dose of quantitative easing which will be more powerful than the 2008 booster.
Ooh, but don’t be discouraged when an important debt default escorts gold, silver, and mining stocks down with it. It most likely will not be a prolonged downturn. Investors are easy to foretell because they are very expressive with their joy or grief. A scuttle for liquidity as well as the perceived “safety” of government bonds or U.S. dollars will be temporary and discerned in retrospect as quite absurd. The ones who hastily abandon real assets will soon lament their madness. As despair ebbs and some facade of lucid contemplation takes place, the understanding of the worthlessness of government paper will be prevalent and be the reason for a concentrated egression of fiat currency.
It is sagacious to store cash while awaiting an unreasonable plunge in the short-term, yet if you are a in this for the long run, then you should take in as much silver as you can. Commodity prices will most likely either keep an upward trajectory right through to the end of the year, or possibly turn around and endure a precipitous slip which will be succeeded by a stretch to novel highs. One way or the other, it will be some time before the price of silver reaches earlier inflation-adjusted highs. It would need to ascend to $150 to attain its 1980 high using properly-restrained inflation statistics and nearer to $300 using candid inflation statistics. And since it is averaging $33, only you can imagine the profits based on your investments.