Cast your mind back to April 2011. The Libyan Civil War was in full swing and Gaddafi was still playing hide and seek. The Japanese earthquake and tsunami claimed the lives of over 15,000 people and rendered the Fukushima nuclear power plant inoperable. Jennifer Lopez was at number 1 with “On the Floor”. The price of silver stood at $48.58 per ounce.
I’m no rocket scientist, but when I saw that silver stood at $15.39 today, I couldn’t help but think that this particular commodity seems to have been somewhat oversold. The dollar looks like a very strong currency compared to Sterling and the Euro right now and it would appear that this strength has had a damaging impact on all commodities over the past couple of weeks.
However, I cannot understand or rationalise why the drop in value, especially in the case of silver, has been so magnified. I could be mistaken, but this looks very much to me like a most excellent buying opportunity.
I am pleased that the FTSE100 has shown incredible resilience from mid October to stand above 6,500 at close of play this week, but I do not foresee any particular growth above this level by the time Auld Lang Syne slurs its annual airing. At one stage during mid October, I was beginning to feel rather pessimistic, but the psychological barrier of 6,000 was not breached and we’re all still breathing.
The other main story seems to be what David Cameron will achieve by entering into talks with the Northern European nations and in particular whether he can walk away with a glimmer of hope or some kind of respite from the £1.7billion the UK has been asked to cough up for managing our finances correctly.
The European question appears to be the issue which will define Cameron’s time at the helm in years to come. I believe he has a golden opportunity to use his political nous to outmanoeuvre UKIP, or else he will be consigned to the pigeon hole of historical figures marked “Also Ran”.
How markets respond to European issues generally is something I will be keeping a close eye on during December, but I am predicting a flat end to the year. Captain Flint’s market prediction that “Pieces of Eight” will come good however, could well be worth a little flutter.