A Buying Opportunity in Precious Metals Looms

A Buying Opportunity in Precious Metals LoomsGold and silver prices have been correcting over the past few weeks.  These corrections, short term changes in asset prices +/- 5%, are normal and healthy.

Casey Research accumulated all price declines greater than 5% in gold and silver over the past decade – gold’s average decline was 12.8% and silver’s 19.7%.

The table below shows the annual low for gold over the past 10 years.

YEAR                                   ANNUAL LOW

2001                            APRIL 2

2002                            JANUARY 4

2003                            APRIL 7

2004                            MAY 10

2005                            FEBRUARY 8

2006                            JANUARY 5

2007                            JANUARY 10

2008                            OCTOBER 24

2009                            JANUARY 15

2010                            FEBRUARY 5

Notice that the annual low occurred most prominently in January and February over the past decade.

So far gold has fallen from $1421.60 to $1330 (-7%). Silver has fallen from $30.75 to $26.87 (-14%). Based off the historical  average declines, we may see a pullback to $1,240 in gold and $25 for silver.

2011 seems to be following this trend – meaning that the best buying opportunity of the year may be presenting itself.

Gold and silver are on “sale” right now, so keep my number handy.

2010 Returns Recap

Silver                     +81.9%

Gold                      +30.7%

Nasdaq                 +16.9%

S&P 500                +12.8%

Dow                       +11.0%

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The Contributor

Anthony Bevilaqua is the Vice President of Euro Pacific Precious Metals, LLC. Among the products offered by Euro Pacific Precious Metals are fine gold and silver coins and bars minted by the world famous Perth Mint of Australia.

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