Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
« Agnico-Eagle Mines Limited: Range Trading | Main | Results versus Rhetoric: A Key Consideration »
Wednesday
Jan052011

How High Will Gold Go in 2011?

By Jeff Clark, BIG GOLD


After stellar years for both gold and silver, what prices will precious metals hit in 2011? Here's an analysis based strictly on their price behavior in the current bull market.
 
First, take a look at the annual percentage gains that gold has registered since 2001 (based on London PM Fix closings):
  

Excluding 2001, the average gain is 20.4%. Tossing out the additional weak years of '04 and '08, the average advance is 24.8%. 
 
So we can make some projections based on what it's done over the past 10 years. From the 12-31-10 closing price of $1,421.60, if gold matched
 
The average rise this decade, the price would hit $1,711.60 
 
The average rise excluding the three weak years = $1,774.15
 
Last year's gain = $1,858.03
 
The largest advance to date (2007) = $1,875.09

But what if global economic circumstances continue to deteriorate? What if worldwide price inflation kicks in? And what if government efforts at currency debasement get more abusive? If Doug Casey is right, a mania in all things gold lies ahead – what if that begins in 2011? Here's what price levels could be reached based on the following percentage gains.
 
35% = $1,919.16
 
40% = $1,990.24
 
45% = $2,061.32
 
50% = $2,132.40
 
1979's gain of 125.7% = $3,208.55

It thus seems reasonable to expect gold to surpass $1,800 this year, as well as reach a potentially higher level since the factors pushing on the price could become more pronounced.

Here's a look at silver. 

 
As you can see, silver had its biggest advance in 2010. The average of the decade, again excluding 2001, was 27.5%. And also tossing out the '08 decline, the average gain is 34.3%. So, from the 12-31-10 closing price of $30.91, if silver matched...
 
The average rise this decade, the price would hit $39.41
 
The average gain excluding 2008 = $41.51
 
Last year's advance = $56.22
 
The 1979 gain of 267.5% = $113.59

So, $50 silver seems perfectly attainable this year. And that's without monetary conditions worsening.

It's titillating to ponder these advances for gold and silver, especially when you consider we might be getting close to the mania. And if we are, that should do wonderful things to our gold and silver stocks, too.

I would add one caution: the odds are high that there will be a significant correction before gold begins its march to these price levels. In every year but two ('02 and '06), gold fell below its prior-year close before heading higher. And here's something to watch for: in every year but one ('08), those lows occurred by May.

In other words, a buying opportunity may be dead ahead. And if you buy on the next correction, your gains on the year could be higher than the annual advance.
----
Are you satisfied with the amount of bullion you own if monetary and fiscal circumstances deteriorate? Are you prepared to profit from the mania in precious metals that Doug Casey projects is ahead? If not, start the year right with a risk-free trial to BIG GOLD, where we list the safest dealers to buy physical metal and the best stocks to profit from the ongoing bull market. Check it out here.



.................................................................................


Over in the options trading pit, we now have 59 winners out of 61 trades, or a 96.72% success rate and we have 3 open positions which have reached their targets or thereabouts and will be closed shortly, taking www.skoptionstrading.com back into a 100% cash position. If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.


sk chart 10 Dec 2010.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (2)

Do you think Gold will hold above 1350 till the end of Jan I have options that are due to expire then. If Gold closes below 1350 i lose everything...

January 6, 2011 | Unregistered Commentermatthew

matthew,

We are not financial advisers so we cant give individual advice. In general your options only have a short time to recover so its going to be a very close call indeed.

The team at skoptionstrading opted to stay mainly in cash for this period as they saw prices going sideways, but did open some bullish vertical credit spreads, non-directional strategies, in order to collect some modest profits over this period. If you are interested in this type of trading then please contact the team via this link:

http://www.skoptionstrading.com/contact/

Sorry that we cant be of more help to you.

January 6, 2011 | Unregistered CommenterGold Prices

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>