What Happens To Gold And Silver Next? Look Out Below?

Hey all, I'm coming back to my favorite thread for a moment. I haven't been able to follow consistently due to my travels, but the recent market action is interesting and deserves a quick comment! Anyway, I am no day trader but an avid reader of market theory and economics. I am a coin/pm collector, so price is more about how muchi can afford on a year to year basis, not so much about making money.

, early in the thread I agreed with Yup that ag/au had peaked and entered a downtrend (or whati would personally call a bear market). I also always stated that at some point in the "cyclical" bear market there would be a significant retracement before continuing is downward trend. I believe this will coincide with another specific market action (and this next bit is what I am interested to hear opinions from yup and others). I personally believe the US equity market is overbought, overextended and overvalued. I expect a strong downward movement in related markets. I would expect/guess (due to limited education) that money will flow into PMs creating the retracement, extending it but eventually ending add equities hit bottom. Then, I can see PMs then finding new lows even beyond what we have seen this year.

, these are my thoughts. I won't deny that I havea bias to see lower prices since all I want is the lowest price to buy my collectable! I also want to thank everyone for this great thread. It's wonderfully educational.

a great day,
Vesper


Forgive the grammar and spelling mistakes. I'm typing on the small screen of my cell phone. Ciao!

I know for me. I'm long physical. So I just buy dips and hold, and do my best to lower my dollar cost average. I pay attention just so I know when to time my buys. So I usually have a very different out look on trading and on these movements.

If I were a high frequency trader... I would be shorting, and taking profits. I agree that we are still in a down trend.

I have heard that key moves on low volume often have more credibility, since smart money can't (by definition, really) be in the majority.

I am a novice, though. I'll defer to yup or others for a more definitive answer.

edit: BTW, I actually bought numismatic silver yesterday (a couple of nice Newfoundland half dollars and a nice 1928 Canadian quarter) not too far from spot. That's the awesome thing for coin collectors about higher silver prices. The "junk" at my local coin store suddenly got a lot nicer lately!

I sold an ox 20 at 700, or 35 per oz., and no surpirse it drawsa bid soon as it gets close to 24 spot, being a highly sought after Engelhard, again playing to many who could care less about spot price....

Many on these high end Morgan collectors of say the CC 1881 variety in MS-64 and up. Checl around and you will see they are priced about the same as 20 oz roll of basic bullion for example....

"divide that by 15"

And where did that all come from Miggs, the idea that for all the work and money it takes to extract about 16 oz.of silver is what it takes to get about 1 oz. of gold....

And like you said it was that way for 1000 of years....

Gold has really pulled away, and many have said this gap must close back to at least 25 to 1 or whatever, but since all that talk all I have seen it do is spread from 50 to 1 to 65 to 1....

I like silver, just look at my name and will always use it for what I need it for, but I like gold for the long haul as I am not a river boat gambler by nature and to me gold is just a safer LESS VOLATILE safer bet.....

Glad I have almost 5 oz., and still have been adding gold commemorative which all started in 1986 with the Liberty proof .24 I added at like 325, and since I have added 1987 Constitution for 330, and the 2008 Bald eagle for 338 and tonight I grabbed the 1988 Olympic piece for 348 after ebay bucks which ain't to shabby with gold flirting with 1400 so call it close to spot at 348....

That wouldn't be too shabby, silver @ $54, allot better than now.

You have 5oz of gold since 1986? They're all fractionals?

@Vesper

Well, I think its an interesting scenario. Is it possible? Maybe. Perhaps you might be on to something tho. But before I proceed I want to say this- my opinions and thoughts are mine. However when I am trading M-F I put those aside and only follow the direction of the trend which is dictated by price. In the end, price and then volume are my two leading indicators of what is really happening.

Now, I do think Vesper is on to something. As far as the market being overbought, overvalued... well lets just say I really don't pay much attention to any of that. Reason being that assets many times move in a direction far exceeded what anyone thought possible. Furthermore, by who's measure are markets overbought or say even oversold? Over valued or under valued? Again that's the viewpoint of someone whos heard those debates and its always noise, markets move which ever way they want too for however long they wish to.

However I do think you are onto something. I think its possible we see a scenario where gold and silver retrace while the market dumps. I think, based on what I am seeing in the market these past few days, that the market wants to correct, it wants to roll over. Its giving many signals that the probabilities are high we correct. I dont think the uptrend is over with, and we are in a major uptrend in the market. Its just the market needs to price things going forward.

Lets go back to this notion that the market corrects and moves lower while gold and silver rise. Well, I can see that happening. That was a correlation we say many times in the past, markets run lower while PMs rise. for a while, PM's rose and markets rose. Then we had a period of time where both equity markets and PMs dropped together.

These events are known as correlations. sometimes they run together. sometimes they split. They never always run in the exact same manner each and every time. However, if you have been watching, while equity markets been dropping as of late, PMs have been surging.

So yes, I would certainly keep an eye on gold and silver versus whats happening in the equity markets. I do believe the market wants to correct. One reason I say this is that breakouts aren't working, they aren't holding. Furthermore, we are now seeing more stocks hitting 52 lows versus 52 highs. The breadth of the market is getting weaker, theres not many supportive buyers right now.

If you look at silver and gold, with the recent price action they have had, they are ready to break out in certain time frames.

so yes, I think its possible that while markets correct, gold and silver continue to churn higher. Then once the correction is over, the air comes out of the PMs and we are back to the previous lows or fresh yearly lows once again. Remember, all this is a process.