Price of gold and silver - how high can it go?

The price of gold and silver is reaching new high every day.

The Chinese are buying gold and silver, since they want certainty amidst the uncertainty of government policies and inflation.

People worldwide are buying gold and silver due to fear.


The unrest in Middle East is causing fear throughout the world.   The unrest in Middle East is linked to the fear in the shortage of oil supply.

How bad can the political unrest in Middle East escalate?  Nobody knows.  No computer program can predict the outcome.

The technical charts predicting the major market correction for gold and silver are not applicable now.  The political unrest and crisis push the technical charts out of the window.

When people are acting on fear, hatred and doubt, anything can happen.  Nobody has the power to stop the mass of angry and hungry people from destroying the country.

That is why the price of gold and silver shoots up.

The wise ones are buying gold and silver for security.  The greedy ones are buying gold and silver for the sake of speculating, and making a quick killing.

There are more people at the sideline.  They think that the price is too high, yet they fear the price is going up and up.

They fear to buy, since they are doubtful of the staying power of such a high price.

They fear not to buy, since they may miss out on the chance of a lifetime.

If the price of gold and silver doubles within a year, they will regret.  They will keep on telling everyone the “if only” story.

The best is to adopt the dollar averaging method.  Buy a few gold coins or silver coins.  If the price of gold and silver increases, at least you can make a little profit.

If the price drops, you do not suffer much.

Those holding gold and silver coins and bars are not selling if they do not need money now.  They are holding tight to the physical assets, hoping that the price of gold and silver keep on going up.

The current gold price is more than $1,400 per Troy ounce.  The current silver price is more than $33 per Troy ounce.

Seasoned investors are betting more on silver than on gold.

The reason is that silver is an industrial commodity, and the price is still affordable to most people.

If the unrest in Middle East escalates, or the political unrest occurs in another part of the world, the price of gold and silver will hit new high in the foreseeable future.

If the property bubble in China burst, the price of gold and silver will shoot all the way up.  In that case, I think it is wiser to sell gold and silver, and start to hunt for cheap deals in China.

That day is still a long way off.  The China government is smart enough to increase interest and reserve ratio to avoid the bubble burst.   The restriction on foreign investments is the new measure. However, it seems the actions by the government is not enough.

What will China government do next to avoid the bubble burst?  Nobody knows.  Whatever the action of China government, the result is the sharp pike in the price of gold and silver.