Global Currency Crisis & Gold – What’s Really Going to Happen in 2011 – 2012

Following on from the first 2 parts in this series: Whats really going to happen in 2010 Whats going to happen in 2010/2011 – part II Another great writer and analyst makes it into our categories section, Bob Chapman of Global research with a seminal must read piece outlining the road ahead towards a new [...]

Just How High is Gold Going to Go in 2011 – 2012?

by admin on 01/03/2011

2010′s most popular post was musing about how high silver is going to in 2011, with James Turk for backup. When that was written Gold was at $1280 and Silver was at under $21, and not very many people took James Turk’s call that seriously..  With JP Morgan now struggling to hold silver below $34 per Oz, more people are listening now :) ..so lets look at what the future holds for Gold in 2011 – 2012 as well now.

Jeff Clark, BIG GOLD writes: After stellar years for both gold and silver, what prices will precious metals hit in 2011? Here’s an analysis based strictly on their price behavior in the current bull market.

First, take a look at the annual percentage gains that gold has registered since 2001 (based on London PM Fix closings):

Excluding 2001, the average gain is 20.4%. Tossing out the additional weak years of ’04 and ’08, the average advance is 24.8%.

So we can make some projections based on what it’s done over the past 10 years. From the 12-31-10 closing price of $1,421.60, if gold matched…

  • The average rise this decade, the price would hit $1,711.60
  • The average rise excluding the three weak years = $1,774.15
  • Last year’s gain = $1,858.03
  • The largest advance to date (2007) = $1,875.09

But what if global economic circumstances continue to deteriorate? What if worldwide price inflation kicks in? And what if government efforts at currency debasement get more abusive?

If Doug Casey is right..

..a mania in all things gold lies ahead – what if that begins in 2011?

Here’s what price levels could be reached based on the following percentage gains.

  • 35% = $1,919.16
  • 40% = $1,990.24
  • 45% = $2,061.32
  • 50% = $2,132.40
  • 1979′s gain of 125.7% = $3,208.55

It thus seems reasonable to expect gold to surpass $1,800 this year, as well as reach a potentially higher level since the factors pushing on the price could become more pronounced.

Here’s a look at silver.

As you can see, silver had its biggest advance in 2010. The average of the decade, again excluding 2001, was 27.5%. And also tossing out the ’08 decline, the average gain is 34.3%. So, from the 12-31-10 closing price of $30.91, if silver matched…

  • The average rise this decade, the price would hit $39.41
  • The average gain excluding 2008 = $41.51
  • Last year’s advance = $56.22
  • The 1979 gain of 267.5% = $113.59

So, $50 silver seems perfectly attainable this year. And that’s without monetary conditions worsening. [BuyGoldSilver.org say "and $60 Silver too!"]

It’s titillating to ponder these advances for gold and silver, especially when you consider we might be getting close to the mania. And if we are, that should do wonderful things to our gold and silver stocks, too.

I would add one caution: the odds are high that there will be a significant correction before gold begins its march to these price levels. In every year but two (’02 and ’06), gold fell below its prior-year close before heading higher. And here’s something to watch for: in every year but one (’08), those lows occurred by May.

In other words, a buying opportunity may be dead ahead. And if you buy on the next correction, your gains on the year could be higher than the annual advance.

BuyGoldSilver.org say..

..what we always say, we are 100% all in Gold & Silver, if you  think now might be a good time protect your wealth with Gold &/or Silver:

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