Silver Correction Reflection: ‘2011 is Not 2008’

Posted by on January 20th 2012 in Bailout, Federal Reserve, GATA, General Economy, Gold, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street | Be the first to comment!

In asking “When Will Silver Make a New High?,” a Casey Research analysis reviews the biggest corrections in the current bull market.  The most recent one is the longest of the three, but it’s close to the average drop of 42.1%.  And while “Counting from the previous peak of April 28, 2011 we wouldn’t break the $48.70 high until May 26, 2013 … an exact date is pure conjecture, of course, and ignores fundamental factors that directly influence the price. 2011 is not 2008.”

One example cited is “an interesting shift in investment activity in both gold and silver markets. The Silver Institute pointed out in a recent market report that ‘investor activity’ was the biggest contributing factor to both last April’s rally as well as September’s selloff. Meanwhile, [investor] demand for physical metal has not only held firm but was projected by GFMS to reach a new record high in 2011.

Investment demand is rooted in the metal’s monetary characteristics. It’s not a stretch to say that we expect silver to regain its currency appeal soon, given the amount of worldwide fiat currency destruction. This will be perhaps the strongest catalyst for prices going forward. We wouldn’t want to be without any silver.”

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