gold and silver

Stubborn Gold & Slumping Silver – Crazy Man, Crazy

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The declines in gold and silver are continuing, although gold has exhibited stubborn resistance to silver’s downside lead. Gold’s potential for a huge price decline is not obvious to most investors because they focus on the assumed strength of the yellow metal, as evidenced by its refusal to stay below $4000.

I expect that to change soon, and it might already be happening. Currently, gold is well below $4000. This comes after several spikes higher, which have not held.

Silver, on the other hand, is stuck below $60 and seems ready to give up the ghost. The white metal has been unable to poke back above $60 for nearly two weeks, with closes below that mark for eight consecutive trading days.

IF GOLD BREAKS DOWN 

If/when gold breaks down, there isn’t any technical support until $3400-3450, so it is reasonable to expect a sharp price drop of $500 oz. After that, there might be some stabilization, but it should be temporary.

Silver would follow suit, possibly stopping at $50. There is no technical support below $50 and nothing to stop a plunge straight to $40.

CRAZY MAN, CRAZY

With a nod to Bill Haley and The Comets, yes, the projections above may very well sound crazy to some. But these are crazy times, and crazy markets…

The gold price more than doubled, and the silver price quadrupled over 9 months last year. That’s crazy, and it’s not unreasonable or crazy to expect something similar on the downside.

CAVEATS AND CONCLUSION

Crazy is as crazy does. As long as investors and others continue to respond crazily to the crazy actions of others and a world full of crazy events and circumstances,  the markets will continue to reflect crazy results. This should not be a problem unless you have been dragged into the fray, where participants allow crazy emotions to displace common sense.

If you are dependent on explosively higher gold and silver prices for investment success and personal gratification, you might want to review your expectations and prepare for a longer period of lower prices.

A longer period of lower prices could last for months or years.

 

Silver’s 50-Year Bear Market

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Recent articles trumpeting silver’s outperformance relative to gold and some ridiculous price projections are a bit too much. Missing from most of the extremely positive commentary is a dose of reality. Below are three charts (source) which should provide some needed perspective. The charts show average monthly closing prices (inflation-adjusted) for the periods August 2020 – July 2024; April 2011 – July 2024; and January 1980 – July 2024. Here is the first chart…

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Big Down Day For Gold And Silver; More To Come?

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After a recent spike to the upside over the past seven days, both gold and silver have turned negative again and could be headed back to their recent low points reached early in the day on Monday, November 30th.

The movement in both gold and silver is evident of a decided shift in trend direction to the downside. What happens after prices return to their recent lows could prove interesting; or downright discouraging if you are expecting a resumption of the trend to higher prices.

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Gold Nuggets And Silver Bullets

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It is very difficult to let go of someone – or something – when we have invested so much time and energy in it. It is even harder when we have invested so much of ourselves in it; when the outcome is not what we expected; when our reputation is at stake.

In this particular case, that something is gold and silver.

The emotional proclamations just a few weeks ago seemed quite strong, almost being religious in their fervor. But after two thrusts of the dagger to the heart, the explanations afterwards seem a bit hollow. 

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