Outlook for gold/silver

Would appreciate you opinion on the near term outlook for gold and silver. I presently have a considerable exposure and I am hearing that, following a brief further rally into April, both are expected to retreat substantially (similar to the strong decline in the spring of 2006).

Thanks for your thoughts.

Asked by klb in Commodities one year ago

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Answers

543 points

warren answered one year ago …

Don't fall for that argument that's just people wanting in and wanting to knock the price down for themselves to enter. Gold and Silver are appreciatng in every major currency. The smart and big money is begginnig to move into that sector and it is a very small sector. they are just starting their rise. Stay long and strong and take advantage of gifts like todays $60 drop. When there are lots of funds investing in the sector then you may want tobein to take some off the table but right now ther are hardly any. Most peope have no interest inth Metals. You will regret it and have to pay up later on to get back in. They cn't go up every day and need a breather here. $1000 will be tough resistance but it will be overcome. Would you feel beter holding cash? Not me. Good muck.

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3970 points

EthanR answered one year ago …

Gold and the precious metals were very overbought, and have now begun to correct. GG, for example was $46 just a few days ago, and is now below $39! I agree with Warren that gold is in a long term bull market. So I think if you wait a few more days, you will see some stabilization in the price. The XAU is currently at $178.16, and the 200 day moving average is at 166.47, and still rising, by the way. If it holds support at the 200 day M.A., I think you will see a rebound in gold prices.

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MNSL answered one year ago …

There will be strong correction for commodities especially for oil, Gold, silver,corn, sugar and wheat in next 12 months. Sellers such as investment funds who invested 4 years before will dispose their holding time to time whenever there is a rally. One example is: it is reported sudden drop in oil and gold this week is due to selling oil and gold holding by investment funds.

History teaches us some speculators can corner market such as corn market creating artificial demand. I do not know whether we have that type of things now. Anyway it is better to make profit now rather than getting burn later on.

We can see lower commodity market during next 12 months due to following:

Speculative trading in commodities rather than demand oriented including futures trading (now Banks also speculating in commodities)

Ongoing global economic turmoil will reduce demand for commodities

Currently commodity market is too hot.

Global credit squeeze has yet to run its course

We are in final stage of current bull market for all type of assets

Too many new players and funds into commodities

Weaker outlook for the US economy

Too much publicity about commodity market

Structural similarity to the real estate and technology as great investments theme. We all know what happens?

Trading commodity instruments rather than investing