We see corrections along the way in its ultimate journey to its destination. Take gold for example. I have long been on record as saying it will get to the $2,000 an ounce area. Yet earlier in the year when gold had a $100 an ounce correction, many wondered if the bull move is over. I felt that the correction actually made me feel more confident about my longer-term prediction. Again gold looks vulnerable to a correction again and if it happens in a big way, I will not change my long-term target for gold.
This is very similar to the long-term call I had on oil throughout the first decade of the new millennium. Every time we saw a correction in oil, I would get people saying my projection was wrong and the move is over. Yet my market calls of first $40 then $60 and $80, a barrel were achieved over time and do not seem nearly as outrageous as when I made those calls. When you look at any market long-term, corrections are part of the equation. The key for success is to keep the vision and be well capitalized or adjust when the intermediate trend changes.
The other key factor for silver is the Fed. Kind of lost in the silver sell off excitement were the reports of the growing dissent within the Fed. While the Fed voted unanimously with Mr. Bernanke, it does seem very worried that we are headed down the wrong path. In fact this was so disturbing to Congressman Barney Frank he threatened to try to silence Fed regional bank governors by looking to take away their votes on interest policy. He is seeking to threaten the independence of the Fed and bully regional bank governors that dare to speak out. This is a very bold move for a guy that was supposed to be overseeing Fannie and Freddie in the lead up to the financial crisis. If the market senses a major shift in Fed policy, this could slow the rise but ultimately would not stop the markets from hitting their longer-term objectives.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.