So the questions remain.. Are we in a bull trap or a bear trap? It seems the market's a bit sluggish as everyone is waiting for everybody else to make a move... We're already seeing a sustainable margin between spot and the actual trading price of physical. Will this close again with supply, or establish itself as a permanent margin? I'll admit, I'm unsure if I'm I want to hedge or punt this week... :/
yeah I think were all in the same boat. July will be the fork in the road, If it heads north in July I will buy ASAP. If it heads south I will wait and see if $30USD is crossed.
We've all recently had at least two great opportunities to buy, ie Bulliondeals group buy and the new and sexy SC bars. Seems everyone was very keen to jump in and spend a bit of cash regardless of the spot price. That's the way I've been looking at it recently. Spot may go much lower, but you grab your opportunites when they arise...
In other words they are saying that the world will go into Hyperinflation !? Its not that far-fetched now.
Turd has an interesting comment on the results of the price drop http://tfmetalsreport.blogspot.com/ He makes for a good read
Stedlar - Thanks for the link For what is worth I think Turds right with : Lastly, here is silver. The fact that it turned on a dime this morning near $34 and that it couldn't muster additional downside momentum is just another clue that the bottom of this manufactured "correction" is now in. It, too, will dilly-dally and fiddle around a while longer between 34.50 and 36.50 but, once it clears 36.50, shorts will be forced to cover while new buyers rush in. It will spring from 36.50 toward 39 in very short order. I expect this to also happen by the end of May. I'll have to eat my words but can't see Ag drop much more than currently - there's too much 'sideline' cash looking for a home and ready to pounce. Reckon the climb will be slow and steady (with the standard volatility drops along the way) to the end of the year.
It all makes sense what was written above, but it made sense when spot was $49 - true heavily overbought and unsustainable price increases week afta week - but why the large fall in price. Paper trading has to big of an effect and influence on spot . I read all the price forecasts now with a bit of a larger grain of salt. i dont expect silver to fall below $33 - but wouldnt be surprised if it hit $25 or $60 in 3 weeks from now.
Overheated virtual (Futures) trading is the reason for the continual volatility IMHO. A few big paper investors got the jitters when the physical holders started cashing in, then Comex chipped in with highers margins in effect suppressing the market value. I don't think Silver will be this cheap for long, as soon as industrial shortages take play the price will resume hist. 16-1 AGR. $90 ozt should be the true market price. Not the suppressed $35 mark we're currently in.
Personally I think anything is possible when it comes to silver. I wouldn't be surprised if it went either way or if it continued to languish around the current price, which is why I've been buying after this last correction. If it falls further, no drama, I'll buy more there too. I'm very bullish long term, which I know most of you guys are, so buying at the current price is absolutely justifiable. Any opinions on why (if you guys are right) we're heading into the 20's?
Silver is currently mostly used in Industry as an Industrial Metal. Historically it has really only been used in Silverware and coins. Silver could possibly go down to 20's if Silver's industrial demand (mostly China) falls, the demand for silver would drop leading to an excessive supply and a drop in market price (presumably).
fishball valid point, but isn't the general Chinese public becoming net longs for physical silver? I think I read somewhere a large solar panel used something like 1/2 oz during the manufacture...other devices use far less...point being as investors (if they are) buying physical, would offset the industrial demand and support low to mid 30's? Don't know...just a thought.
I'm with you Ag, if the demand for Silver investment declines China will continue to support the industrial demand & support the silver value long term. Surely they understand the price manipulation is working well in their favour right now. Silver is ridiculously cheap compared to other less applied precious metals.
Dynoman - Yep - thinking investment demand will pickup any slack in industry...ie as one declines (industry), the other increases (investment). So if solar panels is one of the larger users at 1/2 oz each, how many power stations can this forum create
Would certainly be interesting to know the total of just how much physical silver is held by members of this forum. Hard to do with confidentiality though
The Chinese seem to be more of long Gold than Silver. If China's economy tanks all of a sudden, both investment and industrial demand for silver will crash. When you're worrying about how to put food on the table the last thing you would be thinking is "hey silver's pretty cheap right now!". Also, the salary level of China is not high. To put this into perspective they average around 6k RMB a month (used to be like 2k; old data: http://www.worldsalaries.org/china.shtml) which is < 1000 AUD a month. They don't see Silver as 'cheap' like us, if anything they would see it as a massive % of their salary. Their costs are rising just as badly as ours over here with necessities such as fruits, veges among other things. Other countries would probably pick up the investment portion of the Silver but China probably won't be the one doing so unless the Chinese billionaires start to enter the market.
