Record High Gold With a Silver Lining
According to my gold charts, gold hit a record high today near $1235 an ounce.Big deal!All indicators said it was coming and now that it's here, it should really be no surprise.As we have said for months, on national broadcasts, we're in the $1500 gold-by-the-end-of-the-year camp.
What does surprise me a bit of late is silver.Last week gold began to make some stronger moves and silver went down.That's usually not the case.Also last week news of a JP Morgan probe into silver manipulation surfaced.It is alleged by some that JP Morgan has been driving down the price of silver when all indicators suggest it should be rising.
I commented on this a few days ago.Time will tell whether it is true or not but when people ask me if I think it is or what my opinion is, I just have to agree with Marc Faber and say I hope it's true.Think of it this way.If silver has been manipulated, just 5 years ago it was $6 an ounce.Today it is $19.30 or so.If that's the kind of returns you get when you are trying to keep the price down, what's going to happen when you can't hold it down any more?
If it really is true that silver supplies are running way short of demand, you can't hide it forever.Eventually, the truth comes out and artificially low prices explode with a force equal to Mount St. Helens.And if it really was true that JP Morgan was manipulating the price of silver down, the probe probably put a quick halt to any of those activities.
Now think of this.If I had the power to manipulate the price of any investment down, it's logical to conclude that when I stop - the price is going up.Then all that need be done is to shift strategies, anticipate the price explosion and go for a nice long ride as natural forces take over and drive the price to the moon.
Rest assured, if inflation fears continue to drive gold prices higher, silver is going along for the ride.We always speak that inflation and gold go hand in hand, now I think it is time to look at silver as an equal hedge against inflation and market uncertainty.I think it's time to give every portfolio a silver lining.