According to David Morgan 2013 will be a bullish year in which a new leg up will start with gold going up 10% to 20% and silver a good 30%. That leg up is starting right now, although we probably will not see a substantial acceleration in the leg up like we saw in the first part of 2011 but, obviously, as soon as $50 is crossed an acceleration can be expected. [Morgan explains his position in article excerpts below.] Words: 912
So reports GoldSilverWorlds.com in edited excerpts from their original article* entitled Silver Outlook For 2013.
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The article goes on to say, in part:
This article presents the highlights of a guest presentation Morgan made at a webinar organized by GoldCore with regard to the silver price outlook for 2013.
Silver’s bigger picture
David Morgan…kicked off his presentation with two long term silver price charts, both adjusted for inflation. The first of the two charts is based on the CPI as measured by the US government. The chart shows the peak price of silver in 1980 (adjusted for today’s inflation) which is $125. The upside potential for silver is clear. (Chart courtesy ShareLynx.com.)
Now it is often mentioned that silver touched $50 in 2011, speculating that it has passed its peak in the current bull market. The…[fact] of the…[matter] is that it was a one day event, and it happened only in the futures market. In the physical market for instance, there was a “bid back” situation, which means the buy / sell spread was very large (dealers were buying physical silver at $35 an ounce and selling at $50). Moreover, the fact that it took only one day, “does not make the market”.
(click to enlarge)
When looking at the same chart taking the SGS inflation into account, we see a totally different picture. The SGS inflation uses the same calculation methodology as in 1980 and is calculated by Shadowstats.com. Obviously the government has changed their calculation methodology over the years. The SGS inflation adjusted chart makes the picture even more extreme. David Morgan explains that a move from today’s $33 to $100 would be a threefold move up, it is still significantly low compared to the historic peak. (Chart courtesy ShareLynx.com.)
(click to enlarge)
Still, these prices are rather irrelevant as the price of precious metals reflects the value of currencies. In the extreme scenario where an infinite amount of money would be printed, the price of the metals could go to infinity (obviously a theoretical example). Instead, it makes more sense to look at the long term trend which is clearly up. David Morgan used several charts in that respect:
The gold to silver ratio is in a long term downtrend (which is in favor of silver). Silver has been outperforming gold over the past decade. [Read: Why You Should Now Invest in Silver vs. Gold]
Expectations remain that silver will continue to outperform gold. The current gold to silver ratio of 50 to 1 is expected to turn to 16 to 1, which is the historic average of the monetary ratio. Here it gets interesting. It makes sense to look at the ratio from the perspective of metals in the ground. The ratio becomes then 7 to 1. David Morgan does not rule out that a ratio close to that will be possible at the peak. [Read: Gold:Silver Ratio Suggests MUCH Higher Price of Silver in Next Few Years]
The long term silver price in all major currencies is shown in the following graph (courtesy of Silverprice.org). Mark O’Byrne shows the idea that silver is a store of wealth based on two examples:
In 2008, while the financial crisis was raging, Sterling was under bigger pressure than the other currencies. You see on the graph that silver lost value in all currencies, except in Sterling.
Likewise in 2011, the Indian Rupee came under high pressure. While the silver price had declined against all currencies, it did not in terms of Indian Rupees.
What is the bottom line for the outlook of the silver price in 2013?
David Morgan expects 2013 to be a bullish year, in which a new leg up will start. It will probably not go into an acceleration phase (like in the first part of 2011). It is reasonable to expect a rise of 10 to 20% in gold, and [a] good 30% in silver.
Questions & Answers
During the Q&A session, some interesting points were made related to silver’s outlook in 2013.
1. When will silver cross $50?
Answer from David Morgan: It is likely to happen in 2013. The next leg up is starting right now, although we probably will not see a substantial acceleration in the leg up. Obviously, as soon as $50 is crossed an acceleration can be expected. It remains difficult to forecast how fast the acceleration will be.
2. How much is silver currently undervalued (compared to the money supply)?
Answer from David Morgan: One of the realistic approaches would value [silver at] $700 an ounce. Source: a recent video from professor Ryan Jordan.
3. I keep my silver in the U.S.. Should I also store it outside the U.S.?
Answer from Mark O’Byrne: We advise clients not to store bullion in the U.S.. In fact, Switzerland remains the safest place in the world to store bullion.
Savers will not stand idly by and watch their savings get wiped out by taxes and inflation….[which] is good news for investors who buy and hold commodity assets today – and it’s also a stark reminder to not be fooled by the short-term head fakes that might make it look like the commodity bull is over. Stay the course – the biggest profits are yet to come. [Here’s why.] Words: 405
What is developing in the markets is not the beginning of another leg down in gold, but a second chance to get positioned for what should be a very profitable intermediate degree rally over the next 2-3 months. [Let me explain further with a number of charts to support my position.] Words: 460
This is not a typical bull market. Gold is not rising in value, but instead, currencies are losing purchasing power against gold and, therefore, gold can rise as high as currencies can fall. Since currencies are falling because of increasing debt, gold can rise as high as government debt can grow. Based on official estimates, America’s debt is projected to reach $23 trillion in 2015 and, if its correlation with the price of gold remains the same, the indicated gold price would be $2,600 per ounce. However, if history is any example, it’s a safe bet that government expenditure estimates will be greatly exceeded, and [this] rising debt will cause the price of gold to rise to $10,000…over the next five years. (Let me explain further.] Words: 1767
You have no doubt read countless articles on the price of gold costing “x dollars per ounce” and possibly own a gold ring or some other piece of gold jewellery but do you really understand exactly what you are buying? What’s the difference between 1 troy ounce of gold and 1 (regular) ounce? What’s the difference between 18 and 10 karat gold? Let me explain. Words: 637
It is no longer a matter of whether or not you should buy gold and/or silver but, rather, which type of investment(s) and how much. You don’t need a lot but you do need some – and here’s a primer on just what type of investment vehicles are available and recommendations on just how much you should buy. Words: 1086
Asset allocation is one of the most crucial aspects of building a diversified and sustainable portfolio that not only preserves and grows wealth, but also weathers the twists and turns that ever-changing market conditions can throw at it. However, while the average [financial] advisor or investor spends a great deal of time carefully analyzing and picking the right stocks or sectors, the basic and primary task of asset allocation is often overlooked. [According to research by both Wainwright Economics and Ibbotson Associates and the current Dow:gold ratio, allocating a portion of one’s portfolio to gold and/or silver and/or platinum is imperative to protect and grow one’s financial assets. Let me explain.] Words: 1060
With President Obama being re-elected we can expect four more years of a Washington-centric controlled economy with a rolling program of borrow, print, spend and pretend; similar to the last four years….[What affect will such fiscal irresponsibility have on the U.S. dollar, gold and silver? Read on!] Words: 717
The price of silver is going to go much, much higher – much higher – over the next decade [relative to gold according to Jim Rogers and I concur. Below are 5 solid reasons why I believe that is the case.] Words: 767
The majority of analysts are now of the opinion that gold will reach a parabolic peak price somewhere in excess of $5,000 per troy ounce in the next few years. Given the fact that the historical movement of silver is 90 – 95% correlated with that of gold suggests that a much higher price for silver can also be anticipated. Couple that with the fact that silver is currently greatly undervalued relative to its average long-term historical relationship with gold, silver could escalate dramatically in price over the next few years. How much? This article takes a look at historical gold:silver ratios and what attaining certain relationships would mean for the price of silver should specific price levels for gold be realized. Words: 691
Personally, based on the fundamentals at hand and the fact that Gold doubled its log channel around this point in the cycle; I expect Silver to bust up out of its log channel in 2013. Initially, I look for Silver to reach the $60 to $68 level, first and hold open the possibility for Silver to do much more on the upside as the 70’s Silver Chart reflects.
This article was prompted by a question enquiring what the silver price might be if my gold forecast of $4,500 proved to be correct [see my article entitled “Alf Field: Correction in Gold is OVER and On Way to $4,500+!” and I have settled on] a target price of $158.34 for silver. [Let me explain how I came to that specific price.]
[According to the chart in this article,] all currencies are being debauched. The price of gold in each currency approximates a parabola, meaning the use of printing presses is accelerating. Each unit of currency is losing purchasing power at an increasing rate. The trend points to a worldwide currency collapse unless the creation of money stops. [Take a look!]. Words: 282
Today’s world is as uncertain as any we’ve seen in some time. Sovereign-debt crises threaten major economies in Europe and Japan and the fiscal state of the United States is the worst in non-wartime history! It’s no surprise, then, that investors are becoming increasingly attracted to the safety, anonymity and purchasing-power preservation that comes with bullion ownership. That being said, one of the most-often-overlooked benefits of bullion is its ability to help you increase your wealth across currencies, so today I’ll show you how owning physical metals — and the most-precious of them all, gold in particular — can help you to boost your global net worth! Words: 896
munKNEE.com Your Key to Making Money
will start with gold going up 10% to 20% and silver a good 30%. That leg up is starting right now, although we probably will not see a substantial acceleration in the leg up like we saw in the first part of 2011 but, obviously, as soon as $50 is crossed an acceleration can be expected. [Morgan explains his position in article excerpts below.] Words: 912
