Gold & Silver in 2013

Let’s first review my view from last year-

Silver:  “It is clear the silver has greater volatility attached to it, especially with an 81.9% move in 2010.  At this writing, I expect to see a drop similar to 2008.  Those that have the ability to manipulate the price will attempt to remove anyone who is “long” silver in a leveraged position.”

The price began the year at $28.78 and is ending the year around $30.00, a 4.2% increase.  It had a $10 swing during the year.  That is volatility.

Gold:  “I expect gold to move between 1,500 and 2,100 for 2012 unless the Iran conflict heats up or the European crisis reveals worse financial losses than previously reported. “

We began the year at $1,598 and gold closed at $1,657, a 3.7% increase.  The low was $1,540 and the high was $1,791, a $251 swing.

Both metals performed about how I expected.  Summertime is typically down for metals as it was this year.  Documented manipulation kept both metals at the lower end of my expectation, especially gold.

In 2013, I expect gold to break the $2,000 price level and silver should break $40.  Right now my focus is on the gold and silver mining shares.  I believe they are 20% underpriced versus the metal.  I believe that accumulation of the physical metal is insurance.  Your safe deposit box may be heavy but it did better than bank Certificates of Deposit this year.  I don’t provide recommendations for other people’s investments, I simply share what I am doing for my family.  I bought silver in the $28 range this year as well as the $32 range.  It matters not to me about the volatility since I believe the price is in an upward trend.  Obviously I would love to buy at the low.  I simply buy a little as I get some extra cash.  If the price seems a little high, I wait until it moves back down.

If the currency wars really heat up, the sky is the limit on precious metal prices.  It we have another financial system meltdown, people will flee to the safety of gold & silver.  If the various governments around the globe curb spending, become fiscally responsible and begin in earnest to pay off fiscal debt, the metals could suffer.  I don’t think that will happen.  My conclusion is that gold and silver will continue their upward trek.  Gold’s channel will move between $1,600 and $2,200.  Silver appears to have built a $28 base and could see $45-50 this coming year.  A black swan event could bust the highs overnight.

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