Will gold continue its 5 year streak at the top?
The financial markets are quiet with the main players on holiday. But gold and silver prices are showing signs of renewed life after a long trek sideways since the highs of last year.
This time last summer we wrote excitedly about $2,000 as the autumn price target and then gold rushed ahead and crashed from a high of $1,923 on September 6th. Still it was a major up shift and could happen again. The flickers of life in the bullion pits could mean a repeat of the bullish seasonal autumn pattern.
August 9th was the fifth anniversary of the beginning of the global financial crisis. And what was the best investment since then? ArabianMoney readers can probably guess.
Gold and corn are up 144 percent over five years. Silver follows at 122 percent. Oil is up 61 percent and US treasuries 38 percent. Stocks have been volatile to say the least and the S&P 500 returned only eight percent.
It is indeed hard to get the daily or monthly trends right in markets. Many day traders lose the lot to commissions over time. But get the long-term trends right and investments take care of themselves.
Is this the right time to buy gold and silver? Well, the odds on a short-term gain in the autumn are very good on past precedent. The money printing central banks could pre-empt market crashes this autumn with some big moves that would be precious metal positive.
There is the US presidential election in November, after all. Or gold and silver could rise sharply in a seasonal move and then tank with the rest of the markets as the reality of another global recession finally dawns on financial markets. However, in the long-run we are convinced that the precious metals bull market is far from over and that its performance over the next five years could be even more spectacular, especially in a dramatic price spike that we just have not seen thus far.
For a commodity price to really breakdown you need to see a price spike, and we will eventually get one for both gold and silver. Until then it pays to be invested because you never can tell exactly what the future holds for trading and could easily miss the best days for gold and silver by trying to be too clever.