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Don’t Worry, December Will Be Better for Gold and Silver

Wednesday gold fell to $1,705/oz before rebounding.

As is usually the case, speculators placed a very large number of sell orders -placed after Tuesday evening’s December options expiration. The new trading range is bracketed between $1,700 and $1,750.

The last few days were highlighted by end-of-the-month selling pressures plus those looking to lock in their year-end bonus.  Next week should be kinder to gold and silver.

I still expect gold to finish the year above $1800.  Of course that means gold cannot perform like it did last year.  (See chart below)

Roger Wiegand’s “Technical Analysis” predicts a December swoon, like last year, and he also predicts a January recovery, like last year.  Personally, I do not agree, but that is just my “gut feeling” and nothing more, but I am right more often than not when I follow my instincts.

Last year, gold plunged during the month of December, as you can see in the chart above.  It fell by some $200 before reversing course to top $1,790 in February.

Gold spent the entire year bracketed by moves between roughly $1,800 and $1,550.  The “mid-point is $1,675, about $50 below where we stand today and I do not believe gold will drop below that number – in a worst-case scenario.

Currently, gold is running just slightly behind last year.  Gold will finish higher than last year as long as it stays above the mid-$1,500s, which I expect it to do.  That will keep the streak of 13 consecutive years that gold finished the year ahead of the previous year’s close.

Silver should be able to beat last year’s close, which was below $28.  Silver is outperforming gold this year, and it is up $2.35 an ounce or 7.36% from last year’s price at this time.

This discussion of where gold and silver will finish the year is really pretty meaningless because whichever way the prices go in December, we should hit a new all-time high in both metals during the first quarter of 2013.  Of that, I am very confident.

With that, I bid November good-bye.  Miles Franklin will celebrate 2012 with our annual Holiday Party on Saturday.  Andy Hoffman and his wife are flying in from Colorado and Bill Holter and his wife are flying in from Texas.  Susan and I, to our great disappointment, will not be able to make it this year.  It’s been a great year.  We added Bill Holter and Johnnie Herbert to our growing family of great people.  Our sales are even with 2011, but our profit was up as we zeroed in on better managing our expenses.  Considering gold’s lackluster performance, I consider it a very successful year.   The off-shore storage program we launched this year has been successful and we have a few new tricks up our sleeves for 2013.  Our “presence” on the national scene is growing, along with our reputation.  We are honored that Bob Bauman’s Offshore Confidential (a very highly regarded newsletter for wealthy and sophisticated international investors) has recently added us to their “short-list” ( 1 of 2 ) of recommended vendors.