|
 Dr. Richard S. Appel
Gold, silver, gold and silver equities as well as numerous commodities suffered severe losses during the past several days. Gold and silver after posting highs a few short weeks ago of $432 and nearly $8.50 respectively, struck their recent lows of $390 and $5.99. Both the major gold and silver producers and their junior exploration counterparts followed the metals lead, and quickly sought lower prices. Similarly, additional commodities including platinum, palladium and copper gave back what felt like much of their recent spectacular gains. It is amazing how the substantial paper profits, which were created by the tortuous movements these markets traversed to their recent highs, could so quickly turn into significant losses for latecomers. Yet, even for those early entrants who still possessed massive profits, the precipitous falls sent shudders through their startled, trembling bodies and left them with a feeling of despair. How could this be, muttered a legion of suffering investors and traders, if these commodities and stocks are truly in Bull Markets?
You had better get used to it! As difficult as the past several days have been for those who are bullish on these markets corrections must be anticipated, for they go hand in hand with all great Bull Markets. If you remember, as recently as during the February through early April, 2003 period, and after having earlier surged to $388, gold collapsed and touched $319. This 18% loss took two months to unfold, and suffer we did. You may have already forgotten that painful time because it was shortly followed by significant profits generated by a subsequent $100 + rise in the yellow metal’s price and simultaneous, soaring share prices.
Earlier, during the great gold and commodities Bull Markets of the 1970's, there were numerous brief and a few extended price collapses that tested the mettle of those participants who were aligned with the gold bull. The most chilling set-back began from the peak at $200 on January 1, 1975, the day that gold again became legal for Americans to own. It terminated a year and a half later in the summer of 1976, when gold bottomed at $103. It was a grueling, nerve-wrenching period, but it was followed by gold’s march to its ultimate $875 peak in February, 1980. Each time that the bears temporarily gained the upper hand, and prices sharply fell, it similarly sent chills and tremors through the hearts of the “gold bug” investors of that era. However, in the end, massive profits accrued to those who stayed the course and rode the Bull Markets to or near their conclusions.
Rest of the article.
|
Sections