This morning saw a decline in gold & silver prices of -0.89% & 4.09% respectively. After silver hit near its all-time high price it has pulled back almost 10%. This was to be expected considering the meteoric rise in silver over the previous 12 months. Yet, the underlying principles of silver will continue to drive it forward potentially to the $60 mark & beyond.
[The silver rally’s] got fundamentals behind it—this is not an inflation play by any means, Phillip Streible, senior market strategist at Lind-Waldock Streible told CNBC. Supply-demand issues are here, there are new fundamentals and it’s got momentum shooting it higher. We have discussed prior that the majority of silver mined today is consumed for industrial use. This additional pressure on the silver market may be changing the fundamentals of silver for the long-term and potentially for ever.
Where will the silver bull run end? No one has a clear answer at this time. There have been conservative estimates of $55 to $60 an ounce to wild speculation of $100 to $120 an ounce. Until the market finds its equilibrium between investment silver & industrial usage we may continue to have bursts forward with stutter-steps of retraction.
The overall projection for silver is moving forward near the $60 to $70 price range in the next 12 months. Unless Bernanke & the Fed reverse course fundamentally addressing the inflation & economic factors in the price, silver will reach new highs. Now, is a great time to catch silver during a small retraction allowing you to reap the benefits of silvers march forward.