Gold and Silver: Bull or Bear Market

deversole | Oct 5, 2009 |

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So where is gold and silver going? If you can answer that question thanpossess a brilliant mind and will soon become wealthy beyond belief. However, for those us that have struggled with this question, the answer remains more a guess than a rational thought.

Gold and silver have many factors pulling them up or down. Many of these factors our found on the peripheral of the investment world and require more research than the typical stock or bond. So with that said, here are some thoughts I have collected about the direction of gold and silver.

First, the typical indicators are pointing towards a bull market. These include first and foremost a weak dollar. The dollar continues to fall against the Euro and many other foreign currencies. Normally this points toward a higher gold value. Beyond the dollar is a gold and silver demand that seems to be at least steady and perhaps growing. India, the world's leading consumer of gold, is showing an increase in demand. China has been pushing citizens to purchase gold and silver. This can only push the demand higher, which should aid in keeping the price of gold and silver high.

But, even with these two indicators and a troubled economy world wide, one bear remains looming; a correction.

Many investors fear that as the price remains around $1000 for gold and $16 for silver, profit taking will hit the market hard, leaving the price falling. There really is no way of knowing when or even if this will happen, so being smart is critical. Skim some profits on any gold and silver positions and stay pat on purchasing at this time.

Keep a close eye on the price for the next few weeks. If the price remains steady or even continues upward, slowly pick up gold and silver, but remain very aware of a rapid and sudden correction hitting at anytime.