Even at its Darkest, There is Still a...
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Nov
6
Tim Lambert
Even at its Darkest, There is Still a Bright Future for Gold and Silver
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While the stock market has had a bull market stampede, it has been a dismal year for gold (NYSE: GLD) and silver (NYSE: SLV).

For 2013, the exchange traded fund for gold, SPDR Gold Shares, is down more than 20%.  Over the same period, the Standard & Poor’s 500 Index has risen more than 20%.  The exchange traded fund for silver, iShares Silver Trust (NYSE: SLV), has fared poorly, too, falling by nearly 29%.  A headline for a recent Wall Street Journal article told the tale: “Gold Fades from Investment Picture.”

But a recent article by MSN.Money columnist Jim Jubak and an interview with Richard Poulden, Executive Chairman of Wishbone Gold PLC (PINK: WISHY) offered a promising future for gold and silver.

In his MSN.Money piece, “Turbulent Times in the Gold Sector,” Jubak warns that, “The precious sector does not seem ready for a rally anytime soon.”   That is what could make it an ideal time to buy.  Getting in at a low price now could lead to outsized gains when gold and silver do rally.

Poulden sees this rally coming from demand from China and India, along with the policies of global central bankers that will lead to inflation. Historically, that has led to a surge in the price of gold and silver.  Buying from India and China, the two largest customers, will life the price of gold and silver based on basic supply and demand fundamentals.

Jubak is bullish on Yamana Gold (NYSE: AUY).

Beaufort Securities recently recommended Wishbone Gold PLC, which is bullish.  Furthering the positive news for Wishbone Gold PLC was a strong report about its holdings in the Queensland Territory of Australia.  China and India have an established relationship with Australia for natural resources commerce so the demand from those countries should be very strong for any gold and silver that Wishbone Gold PLC produces.

The chart below shows how the GLD has fallen.   Both macro, inflation, and micro, demand, forces should result in gold and silver rising in the future.  Those buying Wishbone Gold PLC, Yamana Gold, and others in the sector should do well when that happens.

 



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