Gold & Silver On Their Last Legs. For A While (Article)

Interesting read, thank you.

Of course, every time I read an article providing solid, logical reasons as to why gold and silver are in a downward trend, the response comments are filled to the brim with people giving logical reasons why they are still in an upward trend. And vice versa.

At most, these articles provide some valuable insight as to why prices dropped from last year's high and have remained relatively flat since then. I do find persuasive the suggestion that this is because, while the U.S. economy is faltering, it's still doing better than the economy of most other countries and therefore the U.S. dollar is seemingly strong as a result (and when the dollar is strong, the gold and silver prices are weaker). I also find it persuasive that gold demand in large markets such as India and China have dropped dramatically since last year, which also serves to keep the prices down.

None of that, however, gives me any confidence as to what is likely to happen with gold and silver in the next three months. Or six months. Or ten years.

Some say the prices will drop sharply over the next few months and that we should wait to buy more until then. Others say the prices will drop even further after that, so we shouldn't buy too soon. Others say that the prices are about to start heading back up and now is the time to buy (of course, they've been saying that since last year). The fact is, nobody knows.

A collapse of the US bond market / dollar would likely trigger massive PM buying as well. While not imminent, this is possible. PMs should be seen as insurance against a financial black swan event.

Also, all this discussion about not buying gold but then they do recommend buying puts on gold. Seems to me that puts and calls futures are not something that most small investors should be messing with.

I am reminded of a Mark Twain comment along these lines... something about "the reports of my death have been greatly exaggerated". So too could be the reports of gold's demise.