Where Is Silver Heading Next?

Based on the previous article it would seem that the best and safest place for your cash is in gold and silver. I like silver for many reasons as we have explained in previous articles. SilverStrategies.com helps us out with Three Short-Term Scenarios.

The Aggressive Scenario – Inflation

Given economic factors such as inflation, industrial shortage and investment demand could easily push Silver above the upper bound of its classical “Ascending Triangle” (continuation formation). The events of this magnitude normally trigger the “buying panic” winch will drive the metal’s price to $20.50 level.

The Modest Scenario – Stagflation

If instead of making a new high in near future, the price of silver will stagnate in the trading range between major support at $9.50 and resistance at $15.00, the reaching of $20.5 level will be postponed until the year of 2008. Please keep your eyes on those numbers…

The Worse Before the Better – Deflation

Even though we have a doubt about this scenario, but what if…? Silver stocks will definitely suffer from the “sell-off” like that, temporarily of course, brining up the sensational opportunity for the investors in physical metal, ETF and stocks. Support is at $9.50

Being that we obviously have no certainty as to which path the Precious Metals will follow I suggest the following. Keep at least 75% of your holdings in the gold at all times (silver if you have the gut for it). The rest may be used for speculating and used for shorting stocks (a greater loser in the case of Scenario #3) or simply held in cash in case a greater buying opportunity occurs.

If you’re like me and know that eventually silver is heading to prices that will make the number 13 just look silly, then you also know that I am more than glad to see silver this low, and lower, adding to my positions.

Remember… Count your wealth in ounces you own, not the amount of dollars that pays for them.



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