• seperator

Ride, ride, ride the wild surf

I couldn’t get the to Kitco website this morning.

Either my Internet connection wasn’t working properly, or an awful lot of people are checking it out in the wake of gold reaching nearly $1,400 a troy ounce yesterday and silver surpassing $26.

I figure it is the latter possibility because I can reach other websites that I check on routinely.

Since silver hasn’t been this high since Christmas 1979, perhaps it is appropriate to address what happened then.

Silver was trading at right around $11 on Labor Day and by New Year’s was at $29.05. That was a heck of a spurt higher.

We didn’t know at the time this occurred the extent to which the Hunt Brothers were involved, but we were about to find out.

The first silver close of 1980 was $38.85, a one-day pop higher of nearly $10, or 33 percent.

Silver’s closing high of $48.70 was reached Jan. 17. It traded as high as $50 Jan. 21 and that is the number we have cited for many years because it is a nice round, stunning figure.

Silver rose by a factor of 4.5 times in about 4.5 months. Then the wheels fell off and it dropped to $10.80 on March 27, 1980, a round trip that occurred in a short seven months. The enforced unwinding of the Hunt positions speeded the fall.

It was wild. It made headlines. If it gets giddy again, don’t forget to take some profits. Don’t take that one last ride.

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2 Responses to Ride, ride, ride the wild surf

  1. Mark says:

    I don’t think we can compare what is happening with silver today as with the 1979 – 1980 period. If someone were cornering the market as the Hunt Brothers did, it would be impossible to keep that a secret. Also back then the US still had a sizable amount of silver reserves it used to flood the market. That is all gone. And there has been news about price manipulation recently and it appears that appears to be ending. Plus, adjusted for inflation, silver would have to be about $130 to just achieve it’s nominal high of $50 in 1980 and we are far away from that.

  2. joe says:

    Actually, it’s not that silver and gold are going up as much as the dollar is going down. Everyone is always refering to the "gold bubble" or the "silver bubble," but what we are now experiencing is the burst of the "dollar bubble."

    The source…an insane spending spree by congress over the past four years and the current administration over the past two year, followed up by the dollar printing presses kicking into overdrive with QE2. Reality will set in within one year…guaranteed…and the uniformed masses that typically focus on American Idol and Oprah will have a better knowledge of economics than those currently running the show in Washington, DC.

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