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2011 Gold and Silver Predictions

Gold to Hit $1,700/oz, Silver Over $50/oz

Written by Brian Hicks
Posted February 4, 2011

Gold prices are off to an expected pullback for the year.

But this short-term dip won't last long...

After forming a triple top pattern at the very end of 2010, the price of gold has fallen nearly 5% to about $1,350 an ounce.

Take a look:

feb 2011 gold chartWe may continue to see a bit of downward pressure on gold prices in the near term; but as economic problems continue to drive investors into safe-haven hard assets, the price of gold will be headed higher later this year.

That means if you've been waiting for an opportunity to make a little money in gold, the market may be carving out a nice little spot to make some bullion purchases at a decent price to prepare for the next leg up.

There are many who estimate gold will top the $1,500 level this year.

But I think we'll see gold make a heart-stopping race to $1,700 an ounce by the end of the summer.

Silver is also going to be a big winner for us in 2011.

The demand for silver as an investment has increased dramatically over the past several years as the retail market has become more accepting of silver as money and a store of wealth.

And as gold prices approach $2,000 an ounce, I believe silver will be preferred by many — if not most — retail customers as a cheaper alternative that provides the level of wealth protection investors might be looking for.

With that in mind, I think the price of silver will break $50 an ounce this year.

feb 2011 silver chartBoth gold and silver will be highly profitable for investors this year.

But the real money will be made from the junior companies that explore for new resources and develop new projects to mine for these precious metals...

Shares of junior gold and silver exploration companies can often skyrocket overnight — especially when they make new discoveries. And making new discoveries is their specialty...

You'd think that the most talented precious metal prospectors work for the major gold companies like Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM), but that isn't the case.

You see, the most talented mine finders stand to make a lot more money if they go out on their own.

A top geologist with a major that makes a big discovery might get a sizable bonus and bigger office...

Meanwhile, a geologist who makes a big discovery for a junior mineral firm could make tens of millions of dollars — or more. And they get to do it all without a boss!

Junior gold and silver exploration stocks offer the retail market a chance to invest alongside these exploration geologists.

And — more importantly — these stocks offer us spectacular opportunities to make a lot of money.

That's why in 2011, I will be focusing more than ever on junior gold and silver companies.

For the past ten years, I've been guiding subscribers of my Mining Speculator advisory service to buy physical gold and silver bullion ahead of global economic woes.

And at this point, I'm fairly confident that most of my subscribers are prepared...

Now that I have helped my subscribers prepare their portfolios with safe-haven assets, we're going to start expanding our risk exposure to capture some of the huge rewards that will be paid out this summer.

One quick and easy way investors are now getting exposure to the junior market is with the Junior Gold Miners Market Vectors ETF (NYSE: GDXJ).

Junior Gold Miners Market Vectors ETF (NYSE: GDXJ)
feb 2011 gdxj chart

The companies that make up this ETF, however, are already mining gold and silver. They're also typically much larger than I would normally consider a “junior exploration stock”.

To be eligible for listing in the ETF, companies must have a market capitalization of greater than $150 million and a three-month average daily trading volume of at least $1 million.

Nevertheless, GDXJ increased 55.3% as gold and silver prices jumped to record highs in 2010. And as precious metal prices continue to move through $1,500/oz and past $1,700/oz, GDXJ will likely continue to be on the rise.

There is nothing that I can see that will stop the long-term moves in gold and silver and exploration and development stocks...

And this year will provide many opportunities for profit in junior gold and silver stocks.

Good Investing,

Greg McCoach
Analyst, Wealth Daily
Investment Director, Mining Speculator and Insider Alert

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