Gold and Silver Prices: Where are We Now in the Cycle?

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...I think there is no doubt that gold and silver prices will recover and test recent highs, and perhaps, as many experts suggest, move into the stratosphere, but the big quandary is whether it will fall back further first and should one sell and try and pick the next temporary bottom before the runup continues...

...The question is where are we in the cycle now? Personally I think there is no doubt that gold and silver prices will recover and test recent highs, and perhaps, as many experts suggest, move into the stratosphere, but the big quandary is whether it will fall back further first and should one sell and try and pick the next temporary bottom before the runup continues. Timing is of the essence and the investor who can pick the tops and the bottoms in a market correctly most of the time is well on the way to fortune. Unfortunately it's not that easy.

As Neal Ryan pointed out in his recent article here on gold supply, the fundamentals of supply and demand for gold, and although there may have been a recent short-lived breakout from the relationship, the silver price has been tracking that of gold pretty closely, are extremely positive...

But, in the face of this fundamental strength, the downward pressures have nipped any breakout upwards of the $690 level in the bud and the metal price seems to be moving in a trading range of between $640 and $690. Any upwards movement seems to be countered almost immediately by downwards pressures which suggests, in the market's eyes at least, that perhaps overall the metal price may have moved too far too fast over the past three years and we may be seeing a hiatus period, and perhaps a further small fall, before the upward path is renewed.

...So, perhaps the upward movement of the gold price has been faster than the greater market is happy with. But, as everyone seems to be pointing out, the fundamentals are strong for a continuation of the upward movement at some point, but whether this will happen in days, weeks or months remains to be seen...

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