How do I know?
Well, I could read commentary in various online newsgroups, but more importantly, I can look at what is going on in the market itself.
I talked to Julian Jarvis yesterday. He told me that, “Everybody’s trying to buy physicals and nobody is trying to sell today.” He makes a market in physical bullion coins from his Indiana office.
The net result is a mad scramble to find supplies. Buyers, supposedly, are trying to lock in the present lower prices. Gold dropped from the highs by more than $80 if we use closing prices not intraday levels and silver has fallen by nearly $5.
For silver especially, those numbers are large.
American Precious Metals Exchange, which operates a Web site that sells precious metals was overloaded and Scott Thomas posted notice that persons who were interested in transactions of more than $2,500 should telephone his Oklahoma office instead.
It was an interesting coincidence in timing, because I interviewed Thomas on Coin Chat Radio.
Broadcast yesterday online, he warned people to buy into the market in chunks rather than jumping in with everything all at once and he forecast gold at $1,500 an ounce in one year and silver at $35.
The interview occurred before the price declines had hit and yesterday’s market action got going.
Clearly there are more individuals besides Thomas who believe that prices are going higher or the scramble would have been all on the other side – selling rather than buying.
Will these would-be buyers yesterday prove to be right? Well, there are no guarantees, but I put more stock in the opinions of people who are putting up their money to play the investment game rather than those who simply offer a coffee break opinion.