Both of these metals have had decent run ups recently. Gold is in the $1405-$1415 range and Silver is trading at new 30-year highs in the $32-34 range. I would expect Silver to have a pullback, hopefully staying within $30-32 and setting up a decent base to move from. I would expect that Silver will trade up to $38 sometime in the near future and ultimately end the year having traded as high as $44-46. It may not end the year that high, but I think sometime this year we should see it trade that high. With silver at $40 I would expect gold to hit a high around $1600 for a ratio of 40:1.
With all of the money that has been put into the system over the past couple of years I would expect inflation to really heat up in base items (Food, Utilities and Gas) of course the base items are excluded from the governments calculations for inflation because if they did not they would bankrupt Social Security faster since Social Security has a cost of living adjustment. As I have always been taught, "If in doubt, Manipulate the data". That is all the government can do and even then it will not help for long-periods of time.
I am looking for 30-60% price increases in clothing this summer, 15-40% food inflation and 15-30% inflation in the price of gas. Overall for the year I think we will see between 20%-50% if we were to use the old CPI calculations. You can find the true (original) CPI calculations over at http://www.shadowstats.com/
Anyway, just a little update of where I am head in my thought process.
Take care
Mother
Disclaimer Applies
Feb 25, 2011 - Silver/Gold
10-01-2011