Below is an abridged version of an article by Jeff Clark of SilverSeek.com about the severity, duration and recovery of the gold & silver prices during previous financial crises.
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This article looks at the severity, duration, and recoveries of physical gold and silver in three periods that seem to most resemble what is happening today: the Great Recession, the 1970s, and the Great Depression to see what we can learn.
There have been many periods in history where gold and silver have crashed. The reasons vary, as does the severity and duration, but it is important to remember that they always recovered. The only issue is how long the process took and how high they ultimately went.
The 2008 Financial Crisis
The worst of the stock market crash occurred in October 2008. Gold and silver fell hard then too, largely for the same reasons as now, a desperate need for liquidity.
Here’s what that looked like for gold:
As you’d expect, silver’s decline was even bigger:
Here’s what happened next:
Silver did even better.
The message from this Great Recession is that gold and silver can crash in sudden market shocks but those shocks can draw investors into gold and silver, eventually resulting in much higher prices. In other words, once the initial shock wore off and forced margin sales eased up, investors rushed into gold and silver and pushed up their prices.
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…to continue reading the full post of this abridged article, and see the charts from 1970 and what happened during the Great Depression of the 1930’s, visit Munknee.com.
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