However, by the end of this year the current prices of Gold and Silver are going to look like never-to-be-seen-again fairy tale entry prices.
Right now the lifeboats look full, but wait until the 30 year bond reachs 4.9%. My personal guess to this date is as early as Feb 13th 2011. But whenever it happens, that's when we will begin to see what a crowded trade really looks like.
You are talking about a >1% move in the ten-year in ~~ a month? I suppose that has happened before but to use a word that’s supposed to be “retired” in 2010, that would be “epic”.
It would also be a massive, massive, world-wide “refudiation” of the Bernank’s policy of QE. I am probably as disdainful of QE as you or anyone else, but I’d suspect things hold together at least thru spring. The markets don’t care about unemployment, etc; they only care about making money with free Fedbucks.
As for silver, I am plenty long and always looking to get longer. We both know there is going to be a day of reckoning when the newbies get flattened. From what price level that happens, I can’t tell you. Normally, silver has a habit of having trouble at round numbers, so I was pleasantly surprised to see it blast thru $25 with such gusto, but as I said, I’m not convinced it owns $30 yet.
The way I try to answer the question is by asking “how can the newbies be destroyed by about 25%”, and what I come up with is a serious DUMP from 32.high to about $25. Just my opinion, but I’ve followed Ag for quite a while. I still have the rolls of qtrs & dims I convinced the gals who worked the cash registers at my jr high school in 1965 to set aside for me.
It should be noted that a 10% correction in silver, perfectly normal event for any market, all markets, anywhere, any time, is over $3 at this juncture. A $3 move in silver in any year before 2010 is in itself “epic”, a giant, enormous move. For most of the time I followed silver, a 12 cent move was biggish, a 20 cent move was a once, twice a year event! And all I mean by that is that the traditional way the silver market devastates newbies is to let them accumulate positions on margin, then the COMEX raises margin req’ments (as it did about a month ago) and all the newbies get blasted out and forced to sell.