Silver Prices: Near Term Outlook For Gold and Silver
Everything is lining up once more. On the one hand you have the threat of fiat currencies getting diluted even further in an effort to appease the markets for a short spell. It's easy to want to try to get in before the next big run up on silver prices with the prospects of QE3 looming, however, it would appear that it's also time for a good 15% retracement in the gold and silver prices as they may have overshot just a bit on this last run up. This action, should it occur, will inevitably shake many out of the tree and they'll lose the faith in the power of these sought-after metals. Just as there are those that buy up stocks when the blood is flowing in the street, the same is true when the metals go on sale, especially after an over-reaction which is most common when silver prices begin to move to the downside.
If you have noticed, silver prices often move a full two times the percentage that gold moves in a single day. Personally, I wouldn't sell my metals here if you were thinking of buying them again after any possible dip because we cannot control or predict what will actually happen in the near term future. It's all just an educated guess and those are often far from accurate as I'm sure you've noticed.
I learned that some of the junior silver miners 'might be first' to be hurt in a downturn (if you ask me - that has already started), but they should also be the fastest to recover on any uptick in metals pricing. One thing for sure, the world is in a rough place and as each new day comes we start to hear more people that are willing to state that things will probably get worse before they get better for the global economy.
Will silver prices be hurt in the short term by lagging industrial demand? Sure, but so will the other metals including every other base metal. That doesn't change the fact that the demand and hoarding going on in metals like silver and gold seems to be growing each day. This will eventually precipitate a true shortage in some metals in the coming years on a scale not witnessed before in history.
In addition, the Euro is sinking against the Dollar and the Aussie is also fading against the USD. This is a bearish sign for for commodities as many of us know that the AUD/USD is often an indicator for metal prices direction.
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