All signs point to hikes in Gold & Silver prices
This is an interesting debate made by many investors as to where the price of gold and silver will be at by the end of 2011. Some say gold and silver are hitting their peeks right now and the gold and silver bubble is about to burst. There are many of us out there including myself who think gold and silver are indeed CHEAP right now.
Here's why.......
There is a lot of action going on around the world between the Middle East wars and the earthquake/tsunami destruction and the containing Nuclear crisis that does not seem to be getting any better anytime soon. New reports show that the nuclear reactor is leaking into the water because of a crack in the plant and authorities tried to seal the crack but failed in the newest reports. There is also deep concern about the rise in inflation and the U.S. budget deficits. Many investors are trying to find places to put there money so its safe from all these issues. The markets are also very volatile because the fear of oil prices on overseas concerns. Libya only producing about 2-3% of the world's oil production seems to have moderate effect on the price. With other nations in the region becoming unstable this is just the beginning of the oil price crisis affecting the world markets.
U.S. Dollar - 3 Year Index
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| Courtesy of Stockcharts.com |
Gold- 3 Year Index
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| Courtesy of Stockcharts.com |
Will Gold hit $1,700 an ounce by 2012? I think so ladies and gentlemen. Gold is up 26.38% in the last year alone making it one of the hottest commodities to buy for investors. As stated above there are many worries about inflation and the U.S. budgets that many investors are looking for alternatives. Whether you like to buy physical gold or you invested in the ETF: (GLD) is up to you. The only stock I recommend out of gold stocks is a company called Freeport-McMoRan Copper & Gold Inc. (FCX) Good earnings and the company has a solid track record to back it up. Its becoming very expensive to even invest in gold now that gold has hit record high's this past week and that is why many investors are seeking the cheaper metal which is silver. Gold stocks are good to trade but I would recommend buying and holding since many of these companies are merely just exploring and digging and don't have much gold in reserves if any. Something interesting to note is that the state of Utah has recognized the American Eagle for $50 face value which can be used to purchase goods. But obviously people are not buying bread & milk with their $1,428 golden eagle :).
Silver - 3 Year Index
Will silver hit $45 an ounce? Yes it will, and I think it might blow through the $45 dollar mark! Silver is up 110% over the last year which made silver the better investment over gold. Many people believe that silver is peaking and is completely overbought and silvers about to take a downturn. This is all speculation here folks and I see no signs of this upward trend of silver stopping anytime soon. On the charts the MACD line does show that silver is overbought at the highest level but it doesn't mean the run won't continue. A few stocks I mentioned on Friday's edition of my updates were SLV, SLW, & AGQ. I strongly recommend buying the ETF's, AGQ & SLV because they show promising gains continuing for the rest of the year. Silver is entering a new territory where the price of silver might take off into all-time highs over the next few months.
