Wednesday, February 1, 2012

What about Silver? - Alf Field - February 1st, 2012

Some readers may recall that I saw Alf Field come out of retirement to present at the Gold Symposium in Sydney several months ago, as I posted about here.

Alf Field posted a follow up article to the $4500 Gold prediction in mid January suggesting the Gold correction is over and Gold would start heading toward his target (and given the recent price breakout this looks to be the case):
There is a strong probability that the correction in the price of gold has been completed. This article has four separate sections. They are:
1. The Elliott Wave (EW) justification for thinking that the correction in gold is over.
2. Why corrections happen in gold from a fundamental viewpoint.
3. The extent to which manipulation affects the gold price.
4. A possible “black swan” event that could trigger a gold price surge.

Now today (h/t Pete) Alf Field has covered the Silver rally that may come from his Elliott Wave predictions. You can read the entire article here or this is the section that most want to see (but warning it's like skipping to the end of a good book!):
We can now attempt to make some price forecasts. Silver, as with gold, is starting intermediate wave 3 of Major THREE, which should be the longest and strongest wave in the bull market. It should certainly be longer than intermediate wave 1 which was the gain from $8.77 to $49.52, or +464%, as shown above.

Thus the gain in wave 3 of Major THREE should be larger than +464%. It should be a gain of at least 500%. Starting from the $26.39 low, a gain of 500% would produce a target price of $158.34 for silver. That is the number which equates with the $4500 price forecast for gold and produces a silver to gold ratio of 28.4 ($4500 divided by 158.34).

The gain in gold was forecast to be 200% for this move while the forecast rise in the silver price is 500%. Silver is again predicted to perform better than gold based on these EW calculations.

A word of caution is appropriate at this stage. All EW studies are based on probabilities. While the wave counts may provide a high degree of confidence in the forecasts, one cannot be 100% certain of any forecast. It is necessary to have a point at which it is obvious that the forecasts are wrong. In the case of this silver study, the line in the sand is at $26.00. If the silver price drops below $26.00 the odds are that the above calculations will not work out.

A further word of caution: silver is not for the faint hearted. Silver is considerably more volatile than gold and the corrections are much larger. Silver corrections can and do happen quickly. They are emotionally gut-wrenching and it is easy to get shaken out of one’s position near the bottom of a large correction.
While I don't personally subscribe to such charting predictions, it's still an interesting read and triple digit Silver is in my opinion very likely toward the business end of this bull market as the public become more heavily involved.

While we don't have the Hunt Brothers cornering the Silver market this time around I think there will be enough interest and speculation in hard assets to drive a similar super spike to that which we saw in 1979/1980.


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  1. I don't think TPTB will let it "break out" all the way to $4,500. There will be many corrections on the way. Wish I was wrong though ;-)

    Anyway, I'm holding until at least $5,000. Many say it will go to $7,500, and then of course Mike Maloney has made a case that it could go all the way to $20K. Wouldn't that be sweet.

  2. Alf Field has suggested only 2 major corrections of around 13% will be seen on the way to $4500. If he's right maybe I'll be an Elliott Wave convert ;)