Silver and gold will read the fiscal cliff "solution" for what it really is. ZNGA breaks $2-.
There is no way politicians will embrace any form of true austerity, especially entitlements, in the current environment, and they will also not substantially raise income taxes. Only when the market dictates certain realities can we expect the politicians to take "legitimate" knee jerk action. The great irony is that Wall Street will initially rejoice that the soft money policies remain intact, as it is these very same policies which will kill Wall Street, starting with problems in the bond market and the U.S. dollar. The timing on this is very difficult to call; the side of the road is littered with the bodies of anyone who has attempted to short the Treasury bond market or the dollar in the last four years. Nonetheless, I think we are very close to the end of this shell game, and we shall be tested in the coming year.
While I anticipate much higher prices for gold and particularly silver in the coming year, keep in mind that these are the most manipulated markets in the world, even more manipulated than the scam stock ZNGA, and short term downside risk remains. The last thing the Federal Reserve wants is a big move in the precious metals, as it might hint no one indeed stands behind the curtain. There is also much credence to the theory that a sizable market decline sinks all ships initially, as investors must raise cash wherever they can as the margin calls come pouring in. At least with gold and silver, there will be some reasonable bid. Those holding ZNGA paper might not be so lucky. The message boards by their very nature attract day traders, and this will likely be a difficult strategy for gold and silver unless you are quite lucky. I would think dollar cost averaging would be appropriate for those who wish to adopt a buy and hold position. For the short term trading crowd, I will say January and February have historically been strong months for the barbarous relics. I have watched the metals for 30 years, and it has been a high probability trade. I don't know the exact reasons why metals move at the beginning of the year, only that they tend to do so with high frequency.