The last time I was able to identify a period when a precious metals correction was about over happened two years ago...
At that time, gold hit a low of $693 and silver $9.63. Since then,
gold has risen about 100%, but silver has soared 206%. This is an
extraordinary occurrence in just two years.
Back in October, I thought both metals, and especially silver, were due for a rest, and perhaps a correction.
Silver reached $24.75 on October 14. I expected a back-off to
begin. Silver briefly touched as low as $23. That is a 7% fall. In the
universe of silver, this is nothing. And then the rise resumed. In
December, silver reached a new high of $30.50.
This all feels unprecedented to me. Gold has not been giving people
an advantageous entry point for a long time now. But silver is supposed
to crash at certain times... It can almost be relied upon to do this.
Not this time. At least, not so far. Given an opportunity to
correct or even consolidate its prior gains, silver barely takes a
breath and then reaches new highs.
Why? Some say silver shorts are covering. But why now? Why this
time? Silver prices refused to fall, and then rose... Of course under
these circumstances shorts will cover.
No answer I've heard is satisfying. I just take the price action as
the news. And the news is that this is bullish behavior the likes of
which I don't think I even saw back in the last bull market of the
Of course, over the life of that bull market, silver soared from
$1.29 to $48: a rise of 3,600%. So far this time, silver has only risen
from $4.03 to about $29.50 today. That's "just" 632% during a similar
But the feeling this time is different. Silver has only had one
typical correction: from $23 to just under $10. But while the percentage
correction was typical (over 50%), it was all over in just seven
months. A huge and powerful bull then quickly returned silver to new
And so far, this time, when I expected a real rest, silver isn't having it at all.
It is possible that average investors now think gold is too
expensive for them and see silver as something they should have. For a
few hundred dollars or the equivalent in other currencies, silver is
regarded as within the budgets of all investors, be they from India or
Indiana, from China or Chinon.
Can you imagine what would happen if every investor on earth became
convinced they needed to own some silver? My old forecast of $187 per
ounce may start to not look so wild.
One other thing has happened recently that I haven't seen
mentioned. Silver has now clearly overtaken gold as the best-performing
asset class since 2000. Gold has risen from $256 to $1,390. That is a
rise of 443%. Silver has risen from $4.02 to $29.50. That is a rise of
As important, those advising silver accumulation have been few in number, and remain so.
For those who have been waiting to buy or add to their silver
holdings, there is no guarantee we'll have any big correction, or even a
consolidation. I'm forced to advise people to simply buy or add without
trying to time their purchases.
In general, this is what you should do in a bull market, but I had
until now thought I was clever enough to attempt to time purchases a
little. I no longer consider myself so clever. So my advice is to bite
the bullet and accumulate at least some physical silver.