Considering the remarkable performance that silver has had over the past year, this correction was long overdue. It makes sense that $50 would be a point of resistance, as it was the 1980 high. But none of the fundamentals have changed: the US dollar is still sinking, the emerging markets are still growing, and global interest rates are still negative in real terms. Whether the selloff was motivated by the CME raising margin requirements three times in one week or by some deluded notion that Bin Laden's murder would restore US greatness, there's only one way for an investor to view it: as an opportunity.
Sellers have taken the froth off the market, and now silver is an even better buy. For those who bought at higher prices, it's a good time to average in by buying lower. For those who were regretting not buying at all before silver hit $50, the market is giving you a second chance.
I don't mean to imply that silver can't go lower, but I think the lion's share of the correction is over. In fact, many traders have likely built up short positions on the assumption that this was a bubble about to pop; when the price resumes its climb, all these short-sellers are going to have to buy to cover their debts - perhaps driving a quick surge past the $50 mark.
We have an interesting summer ahead of us. - in Schiff`s Gold Report
Related: Ishares Silver ETF (SLV), Hecla Mining (HL), Silver Wheaton (SLW)
Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.