Well played Gigrantor. Now if you can predict the "To da Moon" date (even the month will suffice),you will then be elevated to "Guru" status..in the mean time, it's time to stack on!!
date / total net positions of 5000 ounces / price end day 12/08/2014 43726 $19.98 05/08/2014 48203 $19.82 29/07/2014 56583 $20.530 22/07/2014 58347 $20.860 This is price supporting news. A tad higher price, yet 48203-43726=4477 positions dumped. But it's doesn't suffice to state that the current $19.5 is the 'same' as the past ones. 17/06/2014 22838 $19.640 20/05/2014 17597 $19.44 13/05/2014 19434 $19.47 04/02/2014 14852 $19.525 For that, it should at least have been 20000 lower, thus halve. It's gonna need some frenzy buying to rearrive at that position-price combination. 20000 positions is 100 Moz, 10% of an annual world production. And the numismatic enthousiasm won't help to drain off more silver, rather the opposite. So ehm, I don't have the choice anyway, but if I had, I wouldn't buy now and instead wait to see if better opportunities have a chance. Things can change, but it happens alot (not always but still aLOT) that our dear futures market professionals give us a small window on the future they see, every week a look. This was Pirocco from the SS Comex Analysis Bureau.
The price of silver will gradually drop to $10/oz, as the economy improves and interest rates rise (and people will prefer to put their money into interest-bearing assets, or pay off their increasingly expensive mortgage).
^^ That doesn't matter in the short term though. Jim Rogers recently talked about the cost of closing mines and reckons it's in their interest to run at a loss if they believe things will eventually turn around. Personally I doubt we will ever see $10 but $15 could be possible IMO.
Pssst1 central banks have a tendency to keep interest rate on deposits below general price increasings rate. The opposite has fun-consequences. The longer the more fun. Pssst2 it's the difference between intrest rates that matters for purchasing power. Pssst3 7% on savings and 10% general price increasings is the same as 0.7% on savings and 1% general price increasings. Pssst4 there is so much money on bank deposits that every % deposit rate rise means a bigger amount extra per year. Pssst5 that's why they started to lower intrest rates in the first place. Pssst6 good luck with your interest bearing assets when they decide to do something about it after noticing that saving people don't easily waste it anymore in the markets they frontrunned (see stock markets record levels). Pssst7 there is some debt out there. I know it's easy to forget.
It requires willingness of current stockpile owners to sell at it. It requires the willingness of buyers to wait for it. How long it will last depending on their amount, expressed in ounces. Every price dollar move seems to correspond to a 70 Moz supply/demand change. Todays price is $20. So 5x70=350 Moz can be bought in the $15-$20 price range. Wherever these Moz come from. The production uptrend (2008+15%) seems to have reverted since 2013's $30>$20, due to its recycling component, that felt back to 2002 level. Mine production should follow. The remaining story being an existing stockpiles ownership shift. From suckers to rinse & repeaters.
I don't have thoughts on that term, since I just stack, based on multiyear data, and only subsequently use such short term data to pinpoint a target price on the days/weeks term. Implied Net Disinvestment 1990 46,4 1991 48,9 1992 99,2 1993 117,3 1994 143,7 1995 93,8 1996 137,4 1997 78,5 1998 47,6 1999 51,1 2000 94,7 2001 1,9 2002 24,9 2003 7,8 2004 67,9 <- price trend pivot of leaving $5 2005 0,7 2006 24,9 2007 53,5 2008 48,1 2009 -61,9 <- disinvestment > investment pivot 2010 -85,3 2011 -69,3 2012 -198,3 2013 -99,7 1990-2003, price sideways, average disinvesment rate -993.2/14=-71 Moz/year 2004-2008, price uptrend, average disinvestment rate -195.1/5=-39 Moz/year 2009-2013, price uptrend>downtrend, average investment rate 514.5/5=+103 Moz/year Conclusions: - sideways needs -71 Moz/year so 514.5/71= enough stock for 5 years. - uptrend similar to 2004-2008 needs -39 Moz/year so 514.5/39= enough stock for 13 years. Note: this ignores government sales, producer hedging and futures because I was too lazy So if you have a first class vacation trip planned over 6-12 months, please don't ask Pirocco, I'm a cargo that travels the ocean not some fishboat hunting the creeks along the coast.
I think that it will take 12 more months to reach the base of the price retraction. There is still no strength in gold and silver with all that has happened in the world. We could see another capitulation very soon to send gold back much lower to finally test the $1000 mark. Perhaps even $930. This will be the point where the last stand should take place. It is here where only the true believers will survive. Below cost production. Companies going bust. Bullion stores closing. This is the end of the start and the beginning of the end. 4 years to bottom ( nearly there), 4 years back to the high and another 4 to the peak.
Oh and by the way, since unlike gold the reported silver supply/demand trend sometimes does not explain the price trend, fishy weird things may happen. Silver suddenly going into the void to suddenly popup again without passing the counters. The last time (2012-2013) was such popup of 216 Moz silver. Which is a future price pushing up, because what has popped up for sale can't popup a second time for sale without being bought again and drive up the price first. Take into account that all my talk here uses start 2014 as reference. We're august.
I was looking for a chart covering the silver price moves over the last couple of days and realised this one is still one of the best. Very accurate.
