Economic Outlook Continues to Support Precious Metal Investing
Source: The Prudent Investor, Seeking Alpha (2/14/08)
...I notice one more change in attitude: These days all bad news correctly leads to precious metals strength. We will have no shortage in such.
... I have no reason to change my view that all paper assets will continue to decline in value relative to gold, as it was always the case after periods of credit excesses. Silver may even perform better as it is one of the very few commodities that do not yet again trade at record levels. Silver had spiked to $50 in the short squeeze in 1980. This is a high that will certainly be taken out once gold/silver end their under performance relative to all other commodities in this millennium's first commodity boom.
Gold used to trade more or less in tandem with platinum till the mid-90s. Well, platinum currently scratches the $2,000 mark and where is gold? This under performance will not last forever and the longer it lasts, the stronger the following break out. While there is always the possibility of a painful correction I forecast gold's trading range between $850 - the old high currently morphs into a massive support - on the downside and $1,500 on the upside for this year.
For silver I see a 2008 trading range between $15 and $25 with maybe even more room to the upside...
I notice one more change in attitude: These days all bad news correctly leads to precious metals strength. We will have no shortage in such.