Thursday, January 6, 2011

Gold And Silver

How High Will Gold Go in 2011?
5 January 2011
, by Tyler Durden (Zero Hedge)


Here's a look at silver.

As you can see, silver had its biggest advance in 2010. The average of the decade, again excluding 2001, was 27.5%. And also tossing out the '08 decline, the average gain is 34.3%. So, from the 12-31-10 closing price of $30.91, if silver matched...

* The average rise this decade, the price would hit $39.41
* The average gain excluding 2008 = $41.51
* Last year's advance = $56.22
* The 1979 gain of 267.5% = $113.59

So, $50 silver seems perfectly attainable this year. And that's without monetary conditions worsening.

Excluding 2001, the average gain is 20.4%. Tossing out the additional weak years of '04 and '08, the average advance is 24.8%.

So we can make some projections based on what it's done over the past 10 years. From the 12-31-10 closing price of $1,421.60, if gold matched…

* The average rise this decade, the price would hit $1,711.60
* The average rise excluding the three weak years = $1,774.15
* Last year's gain = $1,858.03
* The largest advance to date (2007) = $1,875.09

But what if global economic circumstances continue to deteriorate? What if worldwide price inflation kicks in? And what if government efforts at currency debasement get more abusive? If Doug Casey is right, a mania in all things gold lies ahead – what if that begins in 2011? Here's what price levels could be reached based on the following percentage gains.

* 35% = $1,919.16
* 40% = $1,990.24
* 45% = $2,061.32
* 50% = $2,132.40
* 1979's gain of 125.7% = $3,208.55

It thus seems reasonable to expect gold to surpass $1,800 this year, as well as reach a potentially higher level since the factors pushing on the price could become more pronounced.

Jim Rickards - Gold Standard Coming, Fed’s Hoenig Correct
6 January 2011
, by Eric King (King World News),_Feds_Hoenig_Correct.html


How do we get there Jim?

“Well, as I've said before, there's more to a gold standard than just snapping your fingers and wishing it to be so. It will require a lot of study, a lot of planning and a lot of technical work to execute. One clear implication is that given the amount of money printing in recent years, a much higher price of gold is required to create an equilibrium between the current money supply and the amount of official gold available to support it.

Estimates of that higher price can vary over a wide range depending on what definition of "money" you use and what gold to paper ratios you require. My own analysis indicates a range of between $5,000 to $11,000 per ounce of gold; of course, some estimates are much higher.”

There is the easy way and there is the other path which could very well involve social disorder, violence and failure of the current monetary system. A gold standard is coming to the United States, and the US can do this willingly, or “kicking and screaming” as Jim Rickards has said in the past. Let’s hope we choose the easy path.

See Also:

World Bank chief surprises with gold standard idea
8 November 2010
, London (Reuters)

so what are you say, dump gold, and buy silver?

Wish I could tell you but I think better just wait. After every gold manipulation down it goes up imediately.

So within a few weeks, or maybe even earlier we are back to ol levels.

But there's said that it's expected that silver will go higher more. Jim Rogers also says so.

So from that perspective yes. But even better is to keep the gold and buy silver next to it on the dips like now.

btw MUST LISTEN: Talked about on part2 of this podcast: January 2, 2010 – A. C. Griffith

27.5 trillion of multi-national Cold War funds diverted through Federal Reserve to Bush family, GS, JPM and others.

Here’s the court documents:

Hyperinflation to drive gold price to $10000/oz
2 January 2011
, by Egon von Greyerz - Gold Switzerland (CommodityOnline)$10000oz-35210-2-1.html


Long Term Interest Rates

In spite of US government debt being totally worthless, investors have bought more than ever, with virtually no return, in a world drowning in sovereign debt paper. We have for some time stated that the US bond market is one of the biggest financial bubbles ever. As we forecast back then, the market turned down (rates up) in January 2009. A 14 month correction ended in August 2010. Since then both the 10 year and 30 year US Treasury bonds have moved up one full per cent. So investors are finally waking up to the enormous risks in the financial system by selling government debt. We expect both short and long interest to surge in 2011 in many countries and to reach well into double digits in the next few years.


Precious Metals to reach unthinkable heights

Gold has gone up 40 times against the Dollar in the last 40 years and almost 6 times in the last 11 years. Very few investors have participated in this rise since the 1999 low at $ 250. Less than 1% of world financial assets are invested in gold and gold stocks. Between 1920 and 1980 circa 25% of financial assets were invested in gold and gold stocks.

The major rise in gold in the last 11 years has been a stealth move with very few investors participating. The dilemma is that there is not enough gold to satisfy the coming increase in demand. We have in previous articles forecasted the gold price to reach anywhere between $ 6,000 and $ 10,000 in the next few years – see “Gold entering a virtuous circle”. As we explained at the time, these are totally realistic targets without the effect of hyperinflation.

Bearing in mind that we are likely to see hyperinflation in the US, the UK and many European countries, the $6-10,000 target for gold is much too low. The dilemma is that it is absolutely impossible to predict how much money will be printed by governments. In the Weimar republic gold reached DM 100 trillion. But it is really irrelevant what level gold and other precious metals will reach in hyperinflationary money.

What is much more important to understand is that physical gold (and silver) will protect investors against losing virtually 100% of the purchasing power of their money. Whatever real capital appreciation gold will have in the next few years is of less importance. But what is vital, is that physical gold (stored outside the banking system) is the ultimate form of wealth protection both against a deflationary collapse and a hyperinflationary destruction of paper money.

Throughout history gold has protected investors against various calamities but this time, holding physical gold will be absolutely critical to financial survival.


Rabbit coin in high demand in Singapore
3 January 2010
, (The Voice of Russia)

A gold coin with the image of the symbol of the year 2011 – the Rabbit – on it has been minted in Singapore.

The Rabbit is portrayed in the traditional Chinese style accompanied by the name of the year – Jinmao - under the 60-year calendar cycle.

Even though the value of the coin is 200 Singaporean dollars, buyers pay 12.6 thousand Singaporean dollars, or about 10 thousand USD, for it, “China Daily” reports.

No comments:

Post a Comment