Gold and Silver Set To Go Off With A Bang

September 8, 2009 | By | Reply More

Gold and silver have started the shortened US trading week with a bang.

Eastern trading saw the metals advance into higher territory with early morning in Europe consolidating the gains.

Gold has powered through $1005 and as we write (03:50 EST) and has touched $1006.50.

Silver has fared even better with a 3% rise since Friday’s close to $16.75 an ounce.

We hope that our followers took the advice we have been recommending for the last four weeks and more and bought SLV $15.00 Oct. calls or later.

The gold/silver ratio is now hovering around 60, if it breaks below that for 24 hours or more expect silver to continue to out perform gold by a considerable margin.

The New York open will determine whether gold and silver will continue the present bull run with gold’s next step challenging $1050 an ounce and silver marching steadily up to $18.00 an ounce.

No doubt there will be hiccups along the way but with the probability that US traders closed short positions in the metals before the Labor Day weekend it is reasonable to expect that the metals will open firm and rise before any profits are taken before the close.

Wednesday should provide the final verdict on whether the market for the metals blows out and gold retreats below $1000 or buyers will flock to the precious metals market place as inflation fears and dollar weakness gains ground.

Of course such is the state of world economies, when every day brings up a different prognosis from apparently well respected economists, and not so well regarded politicians, that calling the market shots on a day to day basis is, in truth, no more than guess work.

Who really knows what tomorrow may bring to the price of oil or the Chinese stock market, there may even be a flight to the dollar as other world currencies plunge!

In the longer term, no government can continue to create money, let alone promise to up their spending on popular or vote catching social schemes while at the same time their tax take diminishes, without severe inflationary consequences.

Government buying up their own debt because the bond market is played out is probably the most extreme example of governments short term, hope for the best, many policies that will come back to haunt this and future generations and more than likely to start in the near future.

In conclusion we believe that investors and traders worldwide recognise the dangers. Lets face it nobody should be allowed to play anything requiring more intelligence than putting coins into a slot machine if they can’t recognise the currency hazard lights flashing.

Even if this week does not develop into the major break out we expect for the safe haven and inflationary hedge that gold and silver represent, there can be little doubt that, sooner rather than later, it will happen.

Anyhow it is always nice to see over a 100% profit in four weeks, with maybe more to come in the next four days. Time to watch gold and silver prices like a hawk!

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