When to Buy Silver and Gold

Buy the dippity-do-dahs.

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When to Buy Silver and Gold
http://seekingalpha.com/article/265427-when-to-buy-silver-and-gold?source=marketwatch

For a healthy bull market, it is best if silver does not go up in a straight line. Silver and gold both have gone up eight straight trading sessions and hence a short correction is warranted. That’s not to say the overall fundamental picture has changed. I think both metals will resume their climb higher in days to come, but they are setting up for a leg lower before heading higher again. If you are an investor looking to store some of your savings in either gold or silver, I wouldn't hesitate getting long at these prices. But if you are a trader trying to make money from daily or weekly swings, I think an excellent buying opportunity will present itself within next day or two.

It's not a surprise for anyone that silver has been outperforming gold in recent weeks and months. I have no doubt that silver will continue to outperform gold in coming days but the same outperformance applies to silver on the downside. Silver might lose more in dollar and percentage terms as compared to gold. As mentioned in my earlier article, please use caution before opening any new long position in precious metals before Wednesday, April 27. On Wednesday, Federal Reserve will convene a meeting. Any clarity on a QE3 or specifics on changes to QE2 could bring volatility for precious metal prices. If Ben Bernanke sticks to his gun and continues with QE2 without any concerns about inflation, that might skyrocket silver prices. If dollar weakness rattles the Fed enough to consider squeezing money out of the market, this could put downward pressure on silver prices. In my opinion, longs in precious metals have nothing to worry about in the foreseeable future.

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