As we enter the so called “summer doldrums”, a seasonal slow period in the markets, it gives one time to reflect on similarities and differences in past market declines. The most glaring difference I see is a lack of retail liquidations. Sure, buyers have been few, but sellers? Even fewer. Some might say, “well, we haven’t hit bottom yet”.
Market bottoms are made with widespread negative sentiment and massive selling. And that’s just what we have experienced so far this year. The selling though has been pretty well documented as coordinated dumping of futures contracts, not physical metals themselves, by institutions.
I can list a dozen areas of sentiment from the so called “strong dollar”, to a technical breakdown, to possible Fed policy changes, lack of inflation, import taxes in India and on and on. Bottom line: powerful forces, aligned against gold and silver, have been effective in driving their prices down this year and profiting enormously in the process. This phenomenon can’t and won’t last forever. Fear will ultimately triumph. Fear of being left holding a bag of worthless or disappearing money, just like the poor, hapless Cypriots. It has already started with the record imports of gold into China, through Hong Kong, and also the requested return of their gold reserves by Germany.
So, if you have been on the sidelines, interested but hesitant to buy or if you don’t have all you want or need, start acquiring metals now. In a year or two, these prices will seem like a gift.