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2012 Price Predictions for Gold and Silver
Johnny Mellgren

Dear RealMoneyTracker.com friends and followers of the white and yellow metals, first, let us wish you a happy and prosperous year of the Dragon. In the Chinese zodiac, the Dragon is considered the luckiest of all animals, and looking at the charts for both metals in january 2012, we’re off to a good start.

As you all know 2011 was a very volatile year. Silver headed off and rushed to approximately 48 USD/oz before it fell off the cliff back in early May. Gold broke seasonal trends and had its greatest move during the summer and surpassed the 1900 USD/oz mark before it too fell off in September. Silver continued to fall during the last quarter and fell as low as almost 26 USD/oz, a staggering -45% move from its 2011 high. Bulls who played the leveraged short term markets did not get very good sleep. If the bulls dominated the first half of the year, the bears certainly showed muscle during the second.

Of course, it’s never fun to see your metals go down in price, but you have to keep in mind that the long term trend looking at the 10 year chart, or even a 5 year chart, hasn’t changed. The trends are still intact for both metals. Gold touched and briefly traded below its 200 day moving average which gold has done a few times during the 11 year bull market. Buying physical metal at or below the 200 day moving average represent an excellent point of entry into the market, or a fantastic opportunity to add to positions acquiring more gold at a relatively cheap price. Dips like we saw in 2011 must be considered gifts. Those of you who bought more gold in late 2008 blow the 200 day moving average have done extraordinarily well more than doubling your money. Nothing moves only up without taking a breather to the downside. These dips should be taken advantage of by long term bulls. Now, when writing this in mid February 2012, gold has just recently (late January) broken above the 200 day moving average line. We could definitely see another move below as we saw in 2008, if that happens, it’s an excellent time to buy more.

Gold 10 year chart with 200 day moving average, from February 15th 2012:



To study the 10 year, or 5 year, gold chart with golds 200 day moving average, use the RealMoneyTracker.com charts updated daily.

So, here we are. More than six weeks have passed of the new Gregorian year and we look ahead now into 2012 for both metals. We’ve been listening and reading carefully what gold and silver experts have had to say about the two metals for 2012 during the last six weeks. Four your conveniences we’ve compiled a table listing what the experts say.

Expert/Institution Silver Gold Comment Source
Barclays 2000 During second quarter Watch
Ben Davies 50 1800 Silver: ”higher highs”. Gold: +15%(?) Listen
Bill Murphy 75 Listen
Chris Marchese 62.5 2435 Silver: 60-65. Gold: 2250-2600 Private conversation
Commerzbank 1900 Read (in Swedish)
David Morgan 60 2500 Gold: 2400-2600 Watch, Listen
Duet Commodities Fund 2500 Read
Egon von Greyerz 60 4000 Gold: 3000-5000 Read, Read
Eric Sprott 50 2000 Silver: Above 50. Gold: ”north of 2000” Read
Goldman Sachs 1940 Read
James Dines 1900 Gold: ”New highs” Listen
James Turk 70 2500 Gold: 2000-3000 Read, Watch, Listen
Jim Rickards 1900 For 2013-2014: 3000-5000 Read
Jim Sinclair 2000 ”1900-2100 or more” Read, Listen
John Embry 56 2500 Silver: +100%. Gold: +60% Read, Read, Read
John Hathaway 48 1900 ”New highs” Read
Keith Barron 50 2250 ”Gold: 2000-2500” Read
Michael Pento 2200 Watch
Morgan Stanley 2175 ”By 2013” Read
Nick Barisheff 2250 Listen
Peter Grandich 1900 “New highs” Read, Listen, Watch
Peter Schiff 2500 ”Above 2500” Read
Rick Rule 2200 Read
Rob McEwen 50 2000 ”Above 50 and 2000” Read
Stepen Leeb 80 2750 Silver: 60-100. Gold 2500-3000 Read, Read, Read, Read
UBS 2050 Gold: ”will average at 2050” Read
Average: 59,29 2242
Average gain in %: 112,36% 43,09%
2012-01-02 prices: 27,92 1566,8

Worth noting is that the major banks now have joined the bulls predicting higher prices for gold. In our mind, this is a huge change. The major banks have remained bearish on the metals all throughout this bull market, at least officially. Does this mean they will now start recommending the yellow metal to their clients? Perhaps, perhaps not. To us this could signal the next phase in the bull market where the metals becomes a main stream investment, gold first, then silver.

Granted, we’ve only included price predictions from gold and silver bulls, and no bears. Why? Because the bears have been constantly wrong for the last 11 years, so we see no reason to listen to bears UNTIL the bulls named above turn into bears. Until then, our outlook will not change. Until central banks start raising interest rates and stop their insanely vast money printing schemes, the bulls will remain bulls since gold and silver are money, the only form of money that cannot be printed. Not to mention that the entire financial system is insolvent, sovereign nations are on the brink of bankruptcy, and the derivatives bubble north of 1000 trillion dollars keeps expanding etc etc. The more they print, the higher the prices for gold and silver. Having said that, looks like we’ll have yet another great year for gold and silver.

As you can see the average price targets above are for silver just shy of 60 USD/oz and for gold slightly above 2200 which matches my own targets for the end of 2011. Clearly I was too bullish in in late August last year which goes to show how important it is to be in this market long term. I remain very bullish as the gentlemen above for reasons explained many times on this blog and elsewhere.

May your fortunes grow and the year of the Dragon bring you much luck. For gold and silver, luck will not be needed.

Best Regards
Johnny Mellgren and the RealMoneyTracker.com team

realmoneytracker.com

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