Uncertainty and unrest are common themes during the current economic crisis. Here we are, in 2011, a significant period in our history as far as sovereign debt and youth unemployment are concerned. The mood on the ground in countries across the globe is of frustration and anger as governments and banks meddle with the potential prosperity of generations to come.
Active investors are considering whether they are likely to maintain reasonable returns in this turbulent economic environment. More significantly, passive investors are concerned about the security of their investments in the hands of others. Those who are out of luck in the job market are trying to resist becoming terminally discouraged, while pensioners are growing increasingly worried about their future livelihoods.
UK unemployment worsens as poor get poorer
The remainder of this article involves a debate on the topic of precious metals and how they may react to the current state of affairs in the global economy.
Silver is a conundrum, given its "dual personality" in the eyes of commodities investors across the globe. In the video below EndlessMountain discusses the current lack of movement in the silver market after recent falls and highlights some of the significant points we are able to observe on the 20 day chart. On his trading platform we can see the recent big high of $42 and a big low of $26, followed by a pattern of lower highs and higher lows.
Uploaded by endlessmountain on 12 Oct 2011
He reports on the some significant benchmarks in the yearly silver price that indicate the levels that need to be reached that would indicate further moves to the upside. He illustrates the initial potential break out level near the $33 mark. EndlessMountain suggest that he would expect support at this price to indicate a continuation towards $36 silver. He mentions the importance of breaking $36 with conviction in order to confirm a possible rally to circa $39.
Lastly, he talks about the gold and silver hype on YouTube in 2008. This is interesting as current situations reflect the circumstances that spurred on the rally in gold and silver investment after their prices had fallen significantly through the bulk of 2008.
Gold 5yr Interactive Chart
Silver 5yr Interactive Chart
GOLD AND SILVER TECHNICAL ANALYSIS 13 OCT 2011
One of the questions I would raise at this point is if and when we are likely to see further moves to the downside before momentum gathers enough for another rally. While gold and silver tend to move in the same direction, there is no guarantee that silver will take on either its “precious” or “industrial” metal persona for the remainder of 2011. Nevertheless, as many commentators note, the supply and demand fundamentals for gold and silver point to inevitable medium to long term growth.
GOLD CHART - Why I think we are going down (for now)
Uploaded by GuildF40 on 12 Oct 2011
In 2011, many doom and gloom theorists refer to "Occupy Wall Street" (video below) and the equivalent seen worldwide as confirmation of likely imminent increases in demand for gold and possibly silver. It is clear that the distressful scenes observed during protests in the US or in Greece indicate immense public frustration over the behaviour of governments and banks on almost every level. However, one could argue that public disorder and record unemployment figures will not be sufficient in sparking the demand for paper or physical precious metals in 2011 or even 2012.
I AM NOT MOVING - Short Film - Occupy Wall Street
Uploaded by Bigsteelguy3 on 12 Oct 2011
