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What To Expect From Gold And Silver In 2012

As the New Year draws in it is worth asking what 2012 has in store for the gold price and silver price. To assist us we turn to one of the most experienced analysts and investors in the precious metals, James Turk. Mr Turk is right more often than about anyone else when it comes to the gold and silver markets. Read more to find out how 2012 might affect your gold and silver investments.

With 2011 coming to a close and investors concerned about the recent plunge in both gold and silver, King World News interviewed James Turk out of Spain to get his take on what to look for in 2012. When asked what investors in gold and silver should expect in 2012, Turk stated, “Yeah, I think the big theme in 2012, Eric, is going to be the continuing problems here in Europe. Not only with the sovereign debts, but I think you are going to see increasing focus on the insolvency in the banks themselves. That’s going to be the big story in 2012.”

Solvency issues continuing to drive gold and silver

“The major drivers for the metals have been banking and financial problems worldwide. So, I see no reason to suspect that the metals are going to do anything except go higher next year. As we speak, gold is up 17% (for this year), so if we finish around here that will be the eleventh year gold has traded higher. The average annual rate of appreciation over those eleven years is just about 17% per annum.

But I’m actually looking for something much better than average next year, simply because people are increasingly understanding that Europe is spinning out of control. The US government’s own financial condition is (also) spinning out of control, Japan is spinning out of control, the UK is spinning out of control, there are no safe havens, except the precious metals.”

Recent weakness in gold price and silver price

When asked about the recent smash in both gold and silver, Turk responded, “You know, Eric, we’ve seen so many of these takedowns over the past ten years and they are so contrived. They basically go to the various technical points that cause people to sell and you get all of the gurus on television saying the bull market (in gold) is over and we are starting a new bear market.

But you have to ask yourself, “What fundamentally has changed to make me want to sell my precious metals?” If anything the fundamentals have become even better than they were at the beginning of the year, given the fact there are so many problems out there that haven’t been solved. Given the fact that when you own physical gold or physical silver you don’t have counterparty risk, that’s going to become an increasing issue in 2012 as well.

The last couple of weeks are no different than what we’ve seen many, many times before and to me, even if you look at it from a technical perspective, gold is still in an uptrend. (Also), that flag formation on silver is still forming very, very nicely. When we break out of that flag, I think you are going to see the price of silver double in (roughly) three months.

Price forecasts for precious metals

So, $70 silver by the end of March, is that realistic? Yes, I think so. Gold over $2,000 in 2012, probably in the first quarter, yeah. That’s very realistic as well because the things which have been driving the metals are still very much in place. So forget about a downdraft here and there, just see it as a buying opportunity.

View gold and silver as a form of savings and when is all said and done a few years from now, you are going to be very, very happy acquiring the precious metals at these prices.

I think the insights the ‘London Trader’ discussed with you are truly remarkable and I really recommend that everybody read that interview a couple of times to make sure all of the points he is making sink in…Yes there is tightness (in the physical market) and you see it in the interest rates.

There is nothing I can see out there that’s bearish for gold at the moment. In fact, the way I look at it is everything I see is very bullish and we are down to the level that you are starting to see that huge physical demand. That’s usually been a good sign you are at a major low and likely to go higher.”

Please Note: Information published here is provided to aid your thinking and investment decisions, not lead them. You should independently decide the best place for your money, and any investment decision you make is done so at your own risk. Data included here within may already be out of date.

About the Author

Will BancroftWill Bancroft is Co-Founder of The Real Asset Company, a market place for individuals to invest in gold, silver and precious metals. Will also contributes commentary and analysis to the Research Desk. His interest in financial markets and investment led to a keen interest in monetary economics, gold and silver. Will is passionate about gold’s role in a portfolio and his views appear on sites and media such as Kitco, Market Oracle, Seeking Alpha, Stockopedia, The Telegraph and Yahoo Finance. Follow Will on Google+, and get his commentary via our RSS feed.View all posts by Will Bancroft

  • Roman Epstein

    Fan as I am too of James Turk, he was calling for a gold price of $2,000 at year end 2011, yet we are somewhat short of this.

    Pierre Lassonde has interestingly been saying gold investors might need to be wait out six to nine months of range trading in the gold price.

    I am not sure exactly what 2012 will bring for the gold price (or silver price in fact), but I can’t think of much else in my portfolio I am so happy to hold apart from some of my big dividend payers perhaps 🙂

  • Why bother…

    James Turk and others like Ben Davies might be some of the best commentators out there but I wish they wouldn’t make such regular short term forecasts about the gold price. Eric Sprott is more loath to venture an opinion about the gold price being XXXX/ounce in XX months time, instead usually saying that gold will just be ‘much higher’ in years time even if there are bumps along the road.

    Nigh on impossible to get these short term calls right, especially for that volatile and tricky silver market, and it just seems to tarnish their great brands…

  • Precious

    We may have to wait some time to be rewarded with much higher gold and silver prices guys. Hold out for the reward though. The fraudulent system cannot last forever. Here’s to real money and our freedom!