OK all you analytical Stackers, can someone please explain to me why Silver, a precious, rare metal is so cheap ? A few months ago I was expecting Ag to reach the sky & here we are watching it fall again. Just doesn't make any sense to me ?
heres my thinking the powers to be are making so much money out of silver they will never allow it to go to where it should be just my thinking anyway
Put silver next to the other common pm's. Particularly Palladium & Platinum. It's almost as rare. Has dozens of industrial applications & it's running out. Is the price manipulated by the big players to generate return. Is speculation the key to the low price? Profit taking thumping the price whenever it starts to get a good head of steam? When will consumer demand overtake profit taking?
Silver and Gold Drop because Euro is push up by the Chinese. The Chinese buy up some of the debts of the Euro zone. That's why you will see stock market rise in Euro, PM Price drop.
Its amazing isn't it, theres shortages world wide for physical silver. Yet the paper spot price keeps dropping. Its pretty clear manipulation, if demand was high on an item you would want to sell it for more right? But here we have more short contracts, someone is selling up big to force the price down. Obviously they are selling paper silver to force the price down. I think whats happening is that the smart people are keeping on the sidelines, letting the paper shorts do their thing. They are waiting for a signal mid to late February and will start buying up big for the March 1st delivery. So its going to be a wild ride between now and March 1st. I think its about time, some traders are sick of these games and will demand physical delivery this time around. The Comex, JP morgan, HSBC and LBMA are setup to lose more fiat in this process. Maybe they know that the currency will collapse soon, so shorting and losing 10s of billions will mean nothing to them to keep the game going for a while longer. In the mean time, just take physical delivery of what you plan to buy. This scenario can't last very long, market forces will kick in. Physical silver will be demanded the longer they play these games. Or they will need to give premiums of up to 30-40% to those that bought in at a high price. Slam
Here's a question to consider. Is Silver really that cheap? Yes silver mining is mostly a byproduct from mining other metals. However I remember it being stated somewhere that the all in cost of production (as opposed to cash cost) for silver is around $14 to $15 per ounce for mines that are predominantly silver focused mines. For gold however from what I have read from various commentators, the average all in cost of production is around $1000-$1100 U.S. per ounce. Hence based on average cost of production gold is potentially cheaper. Yes I understand the byproduct mining argument complicates things, but it is still something to think about.
Yeah Slam, and if the Arabs get into the market big they will definitely want physical. That will drive the price up, surely? Instead of building sand islands & hotels nobody wants to sleep in for example. And silver has been a symbolic trading medium for thousands of years in the Middle East. It must happen soon.
If they get involved I'm pretty sure this roller coaster ride will get pretty interesting, look like I might have to fasten my seat belt
I'm more thinking the asians will get involved. December contracts were settled with 25% premium, I'm sure the gang and their buddies will come back for more in March. But given the spot price is volatile, they want more bang for buck. So they wait it out until mid late Feb to start the buying. I feel that there is not much big activity out there, which is why the banks can get away with forcing the price lower. Give it some time, the big buyers will buy up, the banks will have to reverse the trend and also cover for some of their shorts. Slam
They say things are worth what people are willing to pay for them. Some people say there is no manipulation. Some say there is no shortage, Some think the world economy is going down hill and silver will have less industrial use. Many people get caoght up in daydreams about getting rich easy . If it is such a good buy why arn't people buying?The rich I mean,the cunning ones. Not saying Silver won't go up,but its the market that will decide,not us. Be sure of nothing.
My original thought coming into the silver market was that it would be a great way to invest in a relatively safe PM & have some fun at the same time. A number of my wealthy friends were telling me to get into it as well.
Dynoman, there are many theories out there on price manipulation in the silver markets, the most notable being theknown huge short position held by JPM. Many people are scratching their heads and wondering how and why this short position has occurred and been permitted to occur, and also how it can be unwound , or how it will end. Ted Butler and Harvey Organ amongst others are postulating that the Chinese are behind the short position. A very good summary of this is given in simplistic terms by Jesse at his blogspot dated yesterday titled "An Interpretation of the China Silver Short Theory and Fractional Reserve Bullion " From where I am , I cannot post the direct link, but try http://jessescrossroadscafe.blogspot/ It makes interesting reading and tries to offer an explanation to your question
I am more worried about the future of currency than that of silver. In any currency devaluation or inflation or currency collapse, paper loses, metal wins. It just depends on which risk you regard as the greatest - "savings" that is nothing more that an entry in a computer in a bank (and we know that all banks are dishonest and VERY exposed to risk at the moment), or tangible physical assets such as bullion or land or business equipment. Choose your poison.
Maybe investors are starting to take profits. From $20 - $30 is a huge run up, there bound to be some profit taking happening. It also may have to do with a Start of a new Fiscal year in China (Jan 2011 - Feb 2012). People are taking profits after the end of last fiscal year so they can roll their income tax to the next fiscal year.
Silver is currency, I mean an ounce of silver still buys you a goat etc. Gold, well you store Gold for wealth protection.
