Silver Price Predictions for December 2011
60One Ounce Silver Walking Liberty Coin
Look for Silver to Rise during the "Santa Claus Rally"
Silver has been up and down enough to give everyone a heart attack more than once. After rising to a 2011 high near $50 in late April, silver crashed down to $30 just a few weeks later. Since then, silver has bounced around between $30 and $40. As of November 20, the price of silver sits at $32 as the markets continue to look for direction.
The Santa Claus Rally Starts On Black Friday
Historically, the period from the day after Thanksgiving until the end of the year is positive over 70% of the time. After a long consolidation period in the markets, the overall market looks to rally about 3% to 5% lead by the tech sector. This bodes well for silver.
Silver overdue for a Rally
While there are many true believers in silver, the shiny metal has been unable to gain any traction in the past six months. This has allowed silver to consolidate and build a nice base. As the markets rise, look for silver to lead the way.
December Silver Price Forecast
Look for silver to rally about 10% from the $34 level to the $38 to $40 level by the end of the year. Many people who have been on the sidelines will jump in as the precious becomes an attractive investment.
Warning. December will be the last month to privately purchase large amounts of silver!
On Januray 1, 2012, a new law will take effect requiring dealers to record the transactions of all silver and gold purchases over $600. That means that December will be the last month to privately by large amounts of silver. So if you value your privacy, then buy your silver bullion before the beginning of the 2012 year.
Investing Strategy for Silver in December 2011
Consider an out of the money call spread on the Silver ETF SLV. This will allow you to potentially make a large profit with a small investment. Consider buy a call 2% out of the money while selling a call that is 4% out of the money.
Summary
After months of sideways movements, both silver and the overall markets should rally in December. Look for silver to outperform most asset during the last months of the year. An also be aware than December will be your last month to privately purchase large amounts of silver bullion.
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