Far from their all-time highs, gold and silver have plenty of upside room but have undoubtedly tested the patience of precious-metals investors worldwide. Some will say that a market reset is overdue: we’ve heard analysts call for gold at $10,000 and silver at $400, but is this realistic in the near term? And how did precious metals prices get “hammered” in the first place?
Crush the Street had an engaging talk on these vital issues with Mr. Michael Noonan of Edge Trader Plus, located on the worldwide web at EdgeTraderPlus.com. As the author of Edge Trader Plus, Michael provides analysis and trade recommendations with highly consistent results.
Courtesy of thedailycoin.org
A chart analyst with 30 years of experience in the futures markets, Michael Noonan’s focus is entirely on reading developing market activity in the form of price and volume. His objective is to help investors and traders to better understand what the markets are saying, coming from what is the best source of all information: the market itself.
Crush the Street asked Mr. Noonan why precious metals prices have been under such pressure lately. According to Michael Noonan, precious metals prices have been suppressed by central bankers and other entities that control the money supply: they don’t want any competition to their fiat currency (the intrinsic value of which is zero) from precious metals.
In regard to whether there will be an economic reset in which the equities markets crash, gold goes to $10,000 per ounce, and silver goes to $400 per ounce, Michael Noonan believes that this scenario would only happen if we were to back our currency with gold and silver, like it once was in the United States.
According to Michael Noonan, there’s no reason for this to happen because it would constrict any motivation to expand the paper money supply.
Courtesy of goldvu.com
While it is true that Russia and China have been accumulating gold, this is not for the purpose of backing their currencies, according to Michael Noonan. Rather, the accumulation is for insurance purposes, as these nations view gold as a means of financial stability.
We asked Michael about the more realistic prospect of $20 silver – still a sizable move of 43% from $14 per ounce. According to Michael Noonan, it’s more a question of when silver will get there, not if it will get there. However, Mr. Noonan acknowledges that there are headwinds for silver right now, just in terms of getting through the $15 to $16 range.
In fact, according to Michael Noonan, if we do see strength in silver in the near term, it’s more likely to be short covering than actual demand coming into the market. $14.70 is the level that Michael will be watching to get a gauge of the direction for silver in the coming months.
Acknowledging that the pendulum of silver tends to swing harder than gold, according to Michael Noonan, if gold were to go back to $1,900 per ounce, silver will certainly be far above the $20 level. It is true that silver has been weaker than gold recently, and with the gold-silver ratio being above 80, the market has decided to price gold at a premium to silver, at least for the time being.
Courtesy of coinworld.com
Crush the Street completely agrees that the gold-silver ratio is an essential gauge in the precious metals markets, and we’ll be watching it closely along with the levels that Mr. Noonan mentioned in the interview. It’s an extremely informative interview with plenty of timely analysis, so you’ll definitely want to listen to the full presentation in its entirety.
We also recommend that you visit EdgeTraderPlus.com for commentary and trade recommendations to help you become more profitable in the futures markets. And, for a broad selection of must-see economic reports, you can start with Crush the Street’s complete guide to gold and silver investing, our report on the three top steps you can take to protect yourself from the death of King Dollar, plus our report on the 3 best ways to profit from silver’s rise.