Gold to Crash in 2011

If you you have been thinking about investing in Gold or Silver, you might have an opportunity of a life time in 2011. Over the last 5 years Gold and Silver have been two of the best performing assets, well out performing the overall markets. Since October 2008 the Gold ETF GLD has gone from $66 to a high of $139.54 on 12/06/10, an appreciation of over 210%. SLV the Silver etf has gone from a low of $8.45 in 10/08 to a high of $30.00 on 12/06/10, an appreciation of over 340%. Silver in fact is the number one performing asset in the last five years as I write this.

Gold once again is becoming a mainstream investment. From T.V. Personalities like Glenn Beck & Jim Cramer pontificating why you must buy Gold, countless of commercials on radio and TV, reality shows on Gold mining speculation, and even Gold ATM’s. If you Google Gold you will find thousand of articles, videos, technical analysis charts on why Gold must go higher. The U.S. Deficit, European financial crisis, reckless spending in Washington, the Federal Reserves Quantitative Easing programs, J.P. Morgan huge short position on Silver, devaluation of the US Dollar, countless of conspiracy theory’s, terrorism, and of course geopolitical issues. You will also find that smart money investors like Jim Rogers, George Soros, and John Paulson, have all taken positions in the Precious Metals.

I myself have been a Gold and Silver bull for the past 3 years, and believe in the the long term value of both Gold & Silver, and that the bull market in the Precious Metals is not over. My conclusion on Gold & Silver is based up many years and hours of careful study of these markets,using both fundamental & technical analysis. Also many years of investing & trading these markets with success. In fact Silver has produced the best investment returns for my accounts in 2010. This careful analysis has also led me to a current theory that a BIG correction is coming for both Gold and Silver.

My analysis points to a possible Correction in the GOLD ETF GLD of 18% to 26% and for the Silver ETF SLV to correct by 26% to 33%. That means we could see GLD trading around $105 to the $100 area and SLV trading $21 to $19 area sometime in 2011.

If you have experience investing or trading in Gold & Silver you understand that these metals are volatile. This volatility can be analyzed by it’s past price action. For example in the last 5 years GLD has had two major corrections of over 20%. In 2006 GLD corrected by 21% and in 2008 GLD corrected by 34%, in both cases GLD continued to go higher after it finished correcting.

As investors in the Precious Metals we must understand that nothing goes straight up and that when price become parabolic as they have over the past few months, the probabilities increase that a correction is imminent.

If my analysis is correct and we see a large decline in the price of both Gold & Silver in 2011. This correction could provide some great opportunities to profit from the volatility of these markets. As for long term investors it could provide a great entry point, into Silver or Gold. With Silver still being our number one recommendation until we reach a Silver to Gold Ratio of over 18 to 1.

In the short term once my synopsis is confirmed by my advanced technical studies, I will implementing shorting strategies in mine & my clients accounts not only to hedge our current positions, but also to profit from the potential down trend in these markets.

Source by Bert Contreras

Gold to Crash in 2011