Gold & silver retracted after Osama Bin Laden’s death in a combination of giddy celebration & profit taking. We believe both metals have settled into the bottom of the dip and are gaining ground back the previous levels reached at the end of April. The recovery of silver will be a process taking longer than gold to move back near the high mark.
Gold is making gains based on the fundamental issues surrounding US Debt & the Euro Debt Crisis. There is concern making the Euro lose ground against the Dollar. Even though the Dollar is stronger, as a fiat currency, gold is still moving up in price. What the Euro & Dollar do against gold is more significant than there position relative to each other since they are backed by nothing more than a promise.
Tom Aspray, professional trader, analyst & senior editor of MoneyShow.com commented in his blog on Forbes, Even though the dollar seems ready to rally further behind euro zone debt concerns, that does not rule out renewed strength in the metals, especially gold. He believes the fundamentals of gold could continue to rally above the previous highs of late April stating, Clearly, the recent carnage in the metals sharply reduced the bullish sentiment. A rally in gold back to—and possibly above—the recent highs would catch many by surprise.
While gold is moving up silver is recovering at a much slower pace and looks to be volatile in the near term. That is not to say silver won’t return to the $50 mark and surpass it but, it will be a wild ride of ups and downs. Many investors just won’t be able to take the roller-coaster ride that silver is going to take. If you are among the squeamish our advise is to either buy now while silver is low and forget about it or stay out all together.
We still hold to the belief of a continued acquisition bolstering your Tangible Asset Portfolio. The benefits of this are cost averaging the price of your investment along with not trying to time markets. As we know timing markets can leave many left holding the bag, but a bag full of gold & silver is still better than a bag of worthless paper.