Wednesday, October 16, 2013

Acceleration in Price to the Upside

There’s higher lows going back the last three months on the XAU, the HUI and the GDX. They’re so low right now, but we don’t know if the bottom is in or not, but it sure looks like it to me.
As far as the metals go, I’m pretty sure that the key reversal on the 28th of June was it. But again, time will tell. I mean everyday they trade above that shows that that was the bottom. We’re at $22 oz. on silver which is a far cry from the $18.37 oz. or whatever it hit in intraday but it’s not untypical of a major bull market like we’re in to get a massive pullback like we’ve seen.

Gold as you said – I think it was September two years ago and silver actually peaked before gold, at the $48 oz. level around the first of May 2011. So it has been really trying on metals investors over the last couple of years. Again, this isn’t that uncommon. I recall in the first bull market – I’m that old – that we saw gold from its official fixed price unleashed in ’71 move all the way up to $200 oz. over time.

Then under William Simon’s time at the treasury, it sold off substantially and moved down to just a cat’s whisker over $100 oz. I remember the gnashing of teeth, people couldn’t believe that gold had been at $200 oz. and it’s now at $100 oz.

A lot of people gave up and it took some time to work back to $200 and even then people thought, “Well, it’s a double top.” But [selling] was the wrong thing to have done because then it went from the $200 oz. mark to $850 oz…in a fairly short period of time.

I will be speaking about that in my presentation at The Silver Summit on Oct. 24th-25th about how markets move in general. Look at the tech wreck, look at the housing bubble. In every market there gets to be an acceleration point where it becomes the “got to have” investment.

Once that happens, you get acceleration in price to the upside and I really expect that to happen in metals but it’s not here. It’s not now and it’s not going to be this year. It’s probably not even going to be in 2014. But I’m very confident it will take place.

- Source, David Morgan via Silver Seek: