What’s waiting for gold and silver? A spike and then a collapse?
Karen Zuba
Mar. 12, 2007

The gold and silver futures charts manifest build up of potential energies to move up in a sudden and final bull move to unprecedented levels. Geopolitical hot spots are clear – Iran and North Korea. But the fact that oil fell below $60 a barrel and gold is showing signs for explosive moves raises the concern there may more than just Iranian nuke issue.

The gold market is looking at the risk of the global financial systems. If the world is faced with deep deflation and potential collapse in economies, a financial meltdown is possible. During financial meltdowns, banks go bankrupt, financial institutions evaporate overnight. That kind of stuff we never saw since 1930s. But the current bubble bursts in dot com, real estate, mortgage lending and potential bubble bursts in energy, merger acquisitions and industrial metals are raising the risk of a total collapse of the financial system. Never the world saw so many bubbles form and burst sequentially!

In that case, as the world financial meltdown takes place, gold can shoot to levels unimaginable as people from the main street go after throwing the cash to grab the metal. After a while though, the deflation will get to gold too. The gold and silver prices can spike high and then finally form a top and collapse.

What is also significant is the fact that in most cases when financial collapse happens, Governments ban owning gold to protect its currency. That can create a collapse in gold and silver prices too!

Interestingly, as the financial meltdown takes place, it will give rise to another bubble in precious metals and then another bubble burst in the same!

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