While we agree with the NIA that silver is an excellent long-term investment, we feel it is important to point out that just because the fundamentals suggest the price should be $30 or more for an ounce of silver doesn’t necessarily mean that it is going to happen in the near-term.
The silver market, like the stock market, is going to move up and down for a variety of reasons including precious metals market sentiment, the value of the US dollar, overall market sentiment, market momentum, technical factors and fundamentals.
Silver Entry Point
With QE2 scheduled to wind down this summer and millions of American voters still unemployed, it was clear that the Fed was itching to keep the monetary spigot open. But how would that be possible with oil, food, and precious metals at or near historic highs and the dollar at multi-year lows? Clearly, something would have to happen to justify QE3.
Now we know what. On April 27 the Fed confirms that QE2 will end pretty soon, and one week later a slew of bad economic numbers just happen to hit the headlines. First-time jobless claims, productivity, consumer confidence all suddenly appear to contradict the idea that a sustainable recovery is underway. Stocks tank, oil falls, and gold and silver retrace their post-Bernanke press conference parabolic spikes. The economy is suddenly looking double-dipish. More on gold and silver investment.