Gold and Silver Prices

[Market Harmony]

Very rarely do I post what I think prices are going to do. However, now is one of those times. Currently, Silver is about $27.50 and Gold is about $1595 an oz. In the near term future (within a week to a month) these prices will seem low. It is my opinion that these prices represent a discount to value in comparison to most all other goods and services. Silver, on a percentage-term basis, is at a more extreme discount than gold. But both are currently undervalued in terms of other assets.

One of two things is going to happen- The price of regular goods will become cheaper in dollar terms and gold and silver will remain priced as is, or the price of gold and silver will increase in dollar terms. The key factor is going to be the world-wide perception of the value of the US Dollar. And much as some others have pointed out, there is also a factor of "price" that needs to be kept in mind. Many people discount the value of price when it comes to speculation. But price has everything to do with trading. Speculation is trading. Trading involves pricing, and that pricing involves emotions. Even those that try to discount emotion in trading, must still rely on manipulating the emotions of the others in the trading atmosphere who do use emotion, or be able to feed off of the "emotional trade". Skullduggery, anyone?

And this is why I post now. The emotion of the gold and silver trade is at an inflection point. I am personal witness to this. I stabbed my thermometer into the mouth of a mini market lately. I then extrapolated out those findings into a wider audience and then tested the hypothesis. It's true... The unskilled and ill-prepared market participants are at price ambivalence. The fundamentals point towards an inequality. These two conditions, in combination, equal opportunity.

It is my personal opinion, based on information I personally obtained and analyzed with my own "instruments," that now is the time to accumulate gold and silver. In dollar value terms, I am not sure how much more of a discount the market can stand.

There is only one caveat... If there is a breakdown, the consequences can become severe for gold and silver. This means that extreme discounts might be seen. The probability of this occurring is extremely thin. And due to this thinness, it is to your benefit to take the risk of buying now and to speculate on higher prices in the near future.

[avidbrandy]

I agree with most of this. One thing I'd like to emphasize, as it's my personal view though:

The price of regular goods will become cheaper in dollar terms and gold and silver will remain priced as is.

If things go poorly in Europe (more of a when not an if), I think the dollar index will surge and Gold/Silver will hold or drop.I've concluded this from watching how frequently the two of them seem to parallel the Euro in it's movement against the USD.