Ancient wisdom says, your friend is your enemy and your enemy is your friend. In the gold & silver market, this ancient wisdom may be particularly valuable for investors today.
Gold plays the role of punisher in this crisis, and punishes the debt-a-holics. The crisis is enormous, and could go on for decades, but just because the crisis may have decades to run doesnt mean that gold rises forcefully, all the time.
The economy can have enormous bouts of strength while slowly disintegrating, and you have all seen the shockingly bullish economic reports pouring out, in recent months. Analysts continue to underestimate the economic numbers.
Something has got to give here; either the analysts are correct and economic numbers are about to nose-dive, or the economy is surfing a much bigger up wave than the analysts comprehend.
Click here now to view the current gold chart. Note the small head and shoulders top pattern in play, and the broken uptrend line. I personally couldnt care less about the microscopic fall in price implied by this technical action. I’m only interested in buying price sales of $100 or more.
My interest lies with the divergence between gold and silver, and why that divergence may be occurring. Silver investors should click here now. Ive talked about the importance of silver investors holding your ground against big sister gold. Life as the little brother can be frustrating at times, but this could well be your time to shine, but not because silver is poor mans gold.
Last night the price of silver ripped thru its right shoulder high, and the price action is beginning to resemble the action of the Dow, even more so than that of gold. Click here now to view the Dow chomping at the 13,000 point bit. Silvers price action in the $36 area is very similar to the price action of the Dow in the 13,000 point area.
If we are on the cusp of an institutional capitulation, one that acknowledges that a much bigger recovery has started, then silver, platinum, and palladium could all out-perform gold.
If not, then silver is likely to resume its role as golds sidecar, and still fare pretty well. Platinum and palladium may not fare as well as silver if the crisis accelerates dramatically.
Gold appears to be silvers best friend, but if a shocking economic revival is just around the corner, perhaps it is the supposed enemies of silver, the Dow and real estate, who will become silvers friends, at least for a period of economic time.
How big of an economic surge am I talking about? To view the shocking super-rally in real estate that I am predicting, click here now.
Thats the IYR-nyse real estate ETF from ishares, and Im predicting a near-immediate rise in price to my $100 price target, a scenario that will cause 99% of the gold community to do the ultimate double take.