Here’s a snapshot of David Morgan’s latest silver prediction. Historically, he has been the most accurate of all the experts I follow in predicting silver*.
First, I need to give you the changes to my current thinking. For many months I thought that gold and silver would be nearing the March 2008 high of roughly $1000 gold and $21 silver. Because of what has taken place the past five trading days, I have revised that! Currently I see the silver market moving back toward the $15-$16 level by the end of the year as a minimum. We should experience resistance in this area.
However, my fundamental analysis is many investors will come into this sector beginning in September of this year and this will be the beginning of the next leg up for the precious metals. Furthermore, I still expect to see new highs for gold near $1250 and $25 silver by May 2009. Inflation continues unabated even as the mainstream continues to play down and report bogus inflation data. Nothing, absolutely nothing, does better in an inflation that SILVER!!
Let me wrap up by stating that this market has been extremely difficult for all of us, and many times I have stated how difficult it is to ride the bull market. The BULL will do everything in its power to shake you off. In is my very studied opinion that now is the time to hold on tighter and ask yourself if you were to sell your precious metals positions, where would you place the money? Housing? The Dow Jones? The Bond Market?
*Why listen to David Morgan, or subscribe to his newsletter? Consider his silver predictions for this year:
In The Morgan Report published on March 3, 2008, in paragraph four, he stated the following: “We expect to see a quick and solid spike high within the next few weeks. It may come as early as a few trading days from the date of this publication. First, we base this on the fact that the Commitment of Traders report in silver is showing us caution based upon countless previous experiences.”
In April 2008 he stated in paragraphs three and four, “March was one of the most volatile months for the precious metals ever experienced in modern history. Gold breached the $1,000 level and in a matter of days had fallen more than $100. Silver moved above $21 per ounce and fell even harder, hurting some folks who use leverage to trade these markets. The fall is driven mainly because the price of precious metals is determined in a leveraged atmosphere. As hedge funds panic and sell, the commercial traders in the precious metals let out a huge sigh of relief as they are able to cover their short positions. Our sources indicate that many in the ‘hedge fund’ community were urged to sell.”
What about the May issue? Here is what he stated for his paid subscribers:
“Last month we focused on the probability of the current corrective phase in the precious metals. Some are still of the opinion that the correction is almost over and we can expect to see silver and gold move toward their recent highs in short order. We do not see that taking place and expect at least a three to six month corrective phase to develop.”
In the June 2008 issue of The Morgan Report, market direction was not really mentioned; however, he did make this comment, “The market provided tons of information to comment upon this month, but I want to keep it brief since much is available for free on the Internet. The CFTC sent another message that they see no manipulation in the silver price. I commented on this, as did other silver commentators, so if you missed it, please check the main Web site. The thrust of my public article was that the amount of silver on paper is about 100 times the amount of physical silver, and the silver derivatives are potentially a problem area in the future.”
As far as I am concerned, that day has arrived, and there is some disconnect between the futures market (derivatives) and the physical silver market. This can be verified because the spreads between the paper price and the physical price are so wide.
On the first page of his July 2008 report he stated, “. . . I suspect a sharp and hard move to the downside, similar to last year, that will take all markets down, including the mining shares and the metals.”
BAM! Right again! Look at the six-month chart again. The “sharp and hard move to the downside” began a week into August. Dang this guy’s good!
◊◊◊◊ Now: Gold @ $831.10, Silver @ $13.63, USDX @ 77.31 ◊◊◊◊
◊◊◊◊ Now: DJIA 11,543.96