Jason Farrell

Citigroup expects both gold and silver to surge in the long term.

Via Zero Hedge:

“Gold and silver appear to be in the process of finding a bottom; however, the price action could continue to be choppy in the coming weeks. Ultimately, we expect both precious metals to move much higher in the long term, with the potential for silver to be the outperformer, as was the case from 2008-11.”

CitiFX, a division of Citigroup, is using the bottoming process for the metals from 2008 as a template. Gold corrected 34% during that year. The recent drop in gold below $1,200 is 36% below the high reached in September 2011. Even if the correction gets closer to the 44% crash seen in the mid-1970s, Citi expects the bullish trend to remain intact.

“Whether we are seeing a pattern more like 2008 or the 1970s,” says CitiFX, “we do not see this as just the beginning of a bear market in gold; rather, this should simply be another correction in the upward trend.” Should gold find its bottom soon, they forecast, the next leg up could reach $3,500 by 2016.

DR Extra 6-28-13

The real drivers of the metals markets are still intact… global banking stress, high sovereign debt, the creeping possibility of another Euro crisis. All will remain long-term drivers of higher gold and silver. To the list, The Daily Reckoning would add central bank purchases of bullion.

With both gold and silver both getting crushed, some perspective is essential. Our April 15 issue of The Daily Reckoning lamented gold was “due for a rest” after its 11-year bull ride. We also forecast $3,500 in the long term. Keep your eye on the long-term trend. Weak prices now spell one thing: B-U-Y-I-N-G O-P-P-O-R-T-U-N-I-T-Y.

Jason Farrell

For The Daily Reckoning

P.S. Central banks around the globe know gold is money… which is why they are stockpiling it by the tonnes. Want to learn more? Sign up for The Daily Reckoning and get our free analysis “The Real Reason Central Banks Are Stockpiling Gold.” Click here.

Jason Farrell

Jason M. Farrell is a writer based in Washington D.C. and Baltimore, MD. Before joining Agora Financial in 2012 he was a research fellow at the Center for Competitive Politics, where his work was cited by the New York Post, Albany Times Union and the New York State Senate. He has been published at United Liberty, The Federalist, The Daily Caller and LewRockwell.com among many other blogs and news sites.

  • http://dailyreckoning.com/ Daily Reckoning

    Jason’s reply: “Hey David, thanks for the comment. It’s true, you can’t beat Wall Street at their own game. You don’t have to be a day trader to make money though… You can steer away from Wall Street-controlled investments and explore foreign stocks as well, something Chris Mayer specializes in in our Capital & Crisis newsletter. Cheers!”

  • Andrew

    Gold and silver have perhaps found the bottom and are now up for the rally gold bugs have been waiting for :)

  • Pingback: Trackback

  • Pingback: Cheats for Poptropica

  • Pingback: Trackback

Recent Articles

Advance Notice of the Next Market Crash

Chris Mayer

News flash: The future is uncertain. (Gasp!) But given this uncertainty how are you supposed to invest successfully? It would be nice to ride stocks on the way up... and bow out before the crash... but few are able to do it without sheer luck. Chris Mayer, searching for a successful method, looks back to the 1929 market crash for clues...


A New Bank that Challenges the US Dollar’s Reserve Status

Liam Halligan

As owner of the world's reserve currency, the US has enjoyed a cushy spot in the global economy. But with the rise of a group of rival countries the dollar's reserve status is under attack. And if it somehow gets knocked off its perch, the effects throughout the world (and in the US in particular) would be disastrous. Liam Halligan explains...


Diverse Opportunities in the Boomer-Controlled Market

Greg Guenthner

The US population is aging. The total number of births in the US peaked over seven years ago. And as the Baby Boomer generation enters retirement, it's becoming clear that there's no easy way to offset the trend. And that presents some unique investment opportunities most people have overlooked. Greg Guenthner explains...


5 Min. Forecast
What Your Grocery Bill Says About Your Investment Future

Dave Gonigam

Despite rapidly rising food prices, American households still spend relatively little on groceries. And while plenty of factors contribute to lower food costs in the US, that can lead to serious competition... and that means a good investment opportunity is right around the corner. Dave Gonigam explores...


Video
Creditism and the Threat of a New Depression

Richard Duncan

In the 1960s, total credit in the U.S. broke the one trillion dollar mark...and since then, it has expanded over 50 times. But now, as Richard Duncan explains, the explosion of credit that's made America prosperous, threatens to take the entire economy down. And that could mean the return of another depression...