Resolving Debt Issues – Positive for Gold, Better for Silver
Gold climbed despite a fall in equities, breaking away from a recent correlation with risk. All dips in Gold and Silver henceforth should be bought pretty quickly given the Global fiscal challenges that lie in wait. Resolving any debt issues with more debt or simply delaying them to a further date will remain highly positive for Gold, but will be better for Silver. This has been seen & experienced over the past 4 years & hold true even now. But even this can prove right to a certain extent of time, which on any scale seems to be getting over stretched. Theory and reality don’t always agree & if they do so, it could last only for a certain stretch of time. There will soon come a time when even this equation collapses. Gold & Silver will surely rise as Global Debt levels are increased and / or postponed to a later date. Increased monetary easing will sharply spike up Inflation, which in turn is highly positive for Gold and Silver or also other metals to an extent. Nonetheless we regard pullbacks in Gold as a buying opportunity for now and hold strong to our near term forecast of $1,855. Just imagine a scenario where National Debts are High, Jobless numbers are high, Inflation is also high & strain & frustration on public is high & rising. All these will lead to riots, civic unrest & crime. Gold & Silver will surely get a boost but for the price rally to sustain there needs to be a continuous money supply at higher levels – Where will that come from? Gold will get sold / liquidated at higher levels to sustain daily livelihood at the commoner levels. This will increase Supply which in turn will reduce demand, which in turn will induce a crash. That time is yet to come – but does not seem too far away. Till then, a sharp upside rally in not only Gold Prices, but Silver, Metals, Crude Oil & Agro Commodities also cannot be ruled out. For more: Economic Forecast.
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2012-11-10 21:20:59
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