Have Gold and Silver Prices Reached a Tipping Point?

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Gold first: last week investors queued in the streets of London to buy gold. We have a similar rush in the souks of Dubai. Gold coins are selling at the highest premiums to spot gold price in 30 years, and stocks are running out...

Gold and silver went through a severe correction this summer just like the correction in 1975. Then gold prices dipped by almost 50 per cent from peak to trough.

Since its March all-time high of $1,030 an ounce, gold has completed a perfect 38.3 per cent Fibonacci retracement, bouncing back to current price levels. Silver also followed the Fibonacci sequence, albeit with a deeper 50 percent fall from March peak to the trough.

It is important therefore to note that price corrections are behind us in precious metals. These were fairly brutal commodity price corrections. But the rebound has been quick in the case of gold and can only be around the corner for silver the two seldom move out of synch for long.

Tipping point

Now we have to look at the supply and demand position to determine whether this could in fact be a tipping point. The downside after a big correction like we have just seen is clearly small or entirely gone.

Gold first: last week investors queued in the streets of London to buy gold. We have a similar rush in the souks of Dubai. Gold coins are selling at the highest premiums to spot gold price in 30 years, and stocks are running out...

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