The stock market seems to be in panic mode. After the excitement of last week, it looks like we get to experience it again today.
What does that mean for precious metals?
They go up, right?
That is the knee-jerk response that we have all been trained to give, but what do the records tell us?
This morning I made my usual beeline to the Kitco website. It is essential.
I looked at the year 2008, the year the banking crisis hit in September that sent us into the Great Recession that many believe has never ended.
Take a look at the charts yourself. You will probably be as surprised as I was.
In 2008, silver had a high of just over $20 and a low of just under $10.
That makes the math easy. The price halved.
But the action occurred in a way that you might not expect.
The high came before the stock market's big tumbles began. The low was put in a month or so into the stock downturn.
Then I looked at the chart for 2015.
The high for the year is $19.41, so let’s call it an even $20 for ease of calculation.
The low so far has been $14.11.
However, if we consider the possibility of the same crisis year pricing pattern repeating, with a bottom coming a month or so after the big declines set in, that will take us to roughly the end of this month.
Can silver fall to roughly half of its yearly high as in 2008?
If it does, that will again put the metal at just about $10 an ounce.
That would be too precise, wouldn’t it?
Mark Twain said history doesn’t repeat, but it rhymes.
If silver gets to $10 again, I would say that is one darn good rhyme.
It took two years for silver to get back to the $20 mark after the 2008 low and then, as most will recall, it went on to more than double again, reaching a high of about $48 in April 2011.
It was one wild ride.
So, if silver does not follow our knee-jerk “wisdom,” I will not be surprised after looking at the charts.
It would mean that $48 silver could be in the offing again around three years down the road.
Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."
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