Sunshine Profits

With gold prices showing no signs of a breakout in 2011 so far, many investors have started unwinding long positions in anticipation of no further upside. The situation warrants a close scrutiny of the state of affairs.

In our previous free essay we’ve mentioned that mining stocks are at a particularly important crossroad, and whichever they decide to move is likely to determine the way for the underlying metals as well. In the following article we will put another factor into the equation – the general stock market.

Many gold and silver Investors are now confused and worried about their long-term holdings because many analysts are talking about this being a long and deep correction.

2011 is sure to be a critical year for gold with several analysts predicting an end of the bull market.

This past week we saw gold have its biggest two-day drop since February of last year ending the third longest streak of trading above its 50-day that the yellow metal has had since 2000.

Having dwelt a lot on the topic of the gold:silver ratio from a technical and quantitative standpoint in our earlier essays, it is about time we examined the ratio fundamentally.

The debt crisis that has taken down banks and even countries threatens more than 100 American municipalities this year.

It’s instructive to look at the end of the year financial magazines and see their analysis of the past year and their projections for the future

History has been peppered with financial bubbles and we’ll get to that, but first, is gold in a bubble?

In our earlier essay, we saw how the silver-gold pair is ideal to bet on for mean reversion. We also saw how to make use of the mean reverting properties of any ratio.