Is Now The Time To Buy Or Sell Gold And Silver?

January 11, 2011 | By | Reply More

Gold IngotIs now the time to buy or sell Gold and Silver is anybodies guess after last weeks plunge? Mr Market never stops playing his tricks and schemes to fool investors and speculators, technical wizards and fundamentalists, and not forgetting those who try to manipulate him, so that eventually he can bring them crashing down, or even up, to reality!

The facts speak for themselves insofar as the fundamental reasons for Gold and Silver to continue to rise have remained unchanged, if not recently strengthened.

Production down, China, now the worlds largest producer continuing to buy on the world’s markets on top of their own domestic supplies. India, the worlds largest and most consistent gold consumer reportedly increasing purchases after a period of slowing down. Inflation, deflation, fiat currency fears, US unemployment growing, the continuing housing bust, fragile growth prospects etc., etc., nothing much has changed, from gold‘s last all time high with the possibly significant exception of the temporarily strengthening dollar.

That takes care of the fundamental situation so where does that leave the technical analysts? We are used to seeing contrary opinions from the chartists, we think, in our ignorance, that it may be something to do with the infinitely different time frames used as well as conflicting conclusions drawn by technical gurus from longer term chart patterns, but it has to be said that, on the whole, the current opinions of many analysts is pessimistic in the short and medium term.

For what it is worth, and reminding our followers that we are committed Gold and Silver bulls in just about every foreseeable time frame, we are encouraged by the price action shown yesterday and continuing this am on the European markets with spot gold steadily rising of the lows of last week to $1385 an oz. and silver following suit back up to $29.50 an oz.

It will remain to be seen whether this will be followed through when New York opens today? If so we believe that this may be the last buying opportunity before the next jump to new peaks by both metals.

Ever the optimists but short of ready cash we will be exploring the options market in both the Gold and Silver ETFs when the NY market opens today in the hope of some well leveraged profits to come our way over the next six or so months.

Incidentally we follow the practise of not entering any market in the opening half an hour and waiting to see what trend develops after 10.00am. It serves us well when day trading as do the short term technical indicators. Three minute candlesticks, trend lines, support and resistance,and volume indicators are our initial set up for our speculations that are confined to spot gold and more frequently to silver because of it’s increased volatility, the DOW, S&P 500 and if I can’t sleep, the FTSE can give me a run for my money.  We just wish we could get them to work for us in the longer term!

Never the less to try and outguess Mr Market, particularly when there is a chance that some heavyweight market manipulators are present in our chosen gold and silver sector can lead to expensive mistakes.

However as weeks lead into months our bet is that both precious metals will reach substantially higher record highs despite the doomsayers. We will stick to our belief that the market is not yet in bubble about to burst and that to hold the metals in bullion, ETFs, associated indices or well managed miners will prove highly profitable over time.

A final thought to add to our bullish optimism. We read that last week a leading bullion bank halted its of sales bullion, reportedly due to selling out of stock.

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