Now we face another question: one more plunge down, or will silver and gold prices confirm these little rallies by clearing $1,325 and 2200c? These counter trend rallies can sometimes seem as strong as Granny's breath, then just give out, so they'll fool you. But my mind changed this week. Don't know how to explain it exactly, but the heaviness that has weighed me down since April has lifted off my spirit. Silver and gold are coming back, and O, my! They will be relentless. Y'all throw your minds back to 1976. After a fall from January 1974 through August 1976 of nearly 50%, gold came back to rise eight times in the next four years, silver 12.5 times.
Looking back, Zero Hedge noted in, "Is The Low In Place For Gold?" that the New York Times on August 29, 1976 wrote:
Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.
The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course. The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare.
So, while the financial "media" and Wall Street firms may knock gold (and silver), if 1976 is any indication, you'll probably want to hold onto your precious metals for a while yet.
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