Gold AND Silver Enthusiasm Soar to Historic Levels In the Wake of Collapsing Prices

(This is an excerpt from an article I originally published on Seeking Alpha on April 21, 2013. Click here to read the entire piece.)

On April 14th, I wrote my reasons for believing that a bottom for gold would prove elusive. At the time, I was thinking gold (GLD) could experience a new extended phase of weakness. I definitely did not anticipate a collapse in prices on the very next trading day (April 15th).


The collapse in GLD
The collapse in GLD

Source: FreeStockCharts.com

{snip}

Adding to the case for a bottom (or “close enough” to one) is the surge in my stylized “Gold Enthusiasm Index.” {snip}


A new Google Trends high for 'buy gold'
A new Google Trends high for 'buy gold'


A new Google Trend high for 'buy gold'
A new Google Trend high for 'buy gold'

Source: Google Trends

{snip}


Gold enthusiasm suddenly wakes up
Gold enthusiasm suddenly wakes up

{snip}

Perhaps one interesting and confirming twist is the Google Trend view on silver (SLV) search terms. It turns out that “buy silver” and “sell silver” follow similar patterns to gold. {snip}


Interest in 'buy silver' reaches a Google Trends high
Interest in 'buy silver' reaches a Google Trends high

Source: Google Trends

{snip}


Interest in silver searches since 2004 shows a familiar pattern...
Interest in silver searches since 2004 shows a familiar pattern...

Source: Google Trends

{snip}


SLV's breakdown has now erased 90% of the gains from 2010 breakout
SLV's breakdown has now erased 90% of the gains from 2010 breakout

Source: FreeStockCharts.com

{snip}

In the meantime, I will continue to be amazed by the amount of chatter suggesting that gold’s collapse is a harbinger of deflation. {snip} Perhaps inflation will become a palpable threat once after enough people finally conclude the global economy will never see real inflation again…

Be careful out there!

(This is an excerpt from an article I originally published on Seeking Alpha on April 21, 2013. Click here to read the entire piece.)

Full disclosure: long GLD, GG, SLV, PAAS

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