Well here is a view from the cold. We saw in today's Australian that there is a consortium out there formed specifically to offer finance to struggling gold and silver miners. This group of kind souls are interested in seeing the prices of silver and gold fall so that their very rich backer can throw oodles of cash at the embattled miners, maybe even buying the worst ones outright....yes you read it right. These jackals are there to buy mines at firesale prices. They are doing no miners any favours. Now this is interesting for a couple of reasons. 1. This consortium is still coming together but that kind of backing does not just happen over night. Somone has been working on this for at least a few months. 2. As I said previously, why have gold and silver remained high? That is the right question to ask. In a shrinking commodity market with reports of the big manufacturers say that outlooks are bad (Eg China has just reported a third straight quarter of slowing in the sector and has indicated that there is more reductions to come) how has gold and silver not been previously affected? I don't know the answer to number two but the timing of things is not inconsequential. I know the big miners have been preparing for downsizing and a cyclic downturn for at least the last 18 months. That is really important. You can claim that there are ruthless people pushing the prices down but the fact is the whole commodities sector knows that it is in downturn. It is plain and obvious. The fact that the sharks are out trying for the small mining operations is just that they are aware that the prices are finally dropping. Look at copper, the other big money maker and volatile commodity. It has been on a steady price degrade since 2011 (http://www.kitcometals.com/charts/copper_historical_large.html). Same with nickel (though there was a brief recovery this year) http://www.kitcometals.com/charts/nickel_historical.html. Lead and zinc had a spike in 2011 but have settled back down. If I owned a zinc or lead stockpile I would be interested in selling it and buying ailing mining operations in a few months when they fall as well. Alumiunium peaked early (2010) and has been dropping except for a small recovery this year. Everything indicates clearly that commodities, that are driven by the expectation of industry demand, are in for tough times. The prediction is that gold and silver have quite a way to fall yet. Fear not though, like most things, mining is cyclic. Since the US is showing signs of actually recovering, this should lead the way to further recovery across the globe. In turn as a recovery happens money starts flowing and consumer product market pickup. The industries that feed these markets, fuelled by the cheap commodities start selling strongly increasing demand. Demand, within a year or so after the stock market recovery will push commodity prices up again. The biggest miner being BHP Billiton is unsurprisingly suffering the same way as the commodities it is selling. Since August it's share price has dropped below $60 for the first time since 2009. What is different this time compared to other downturns is that the mining companies have fought very very hard, and from very early in the financial crisis, to reduce costs and to pull back development of new mines. The boards have known this was all coming and have been cutting costs and mothballing projects all over the joint. The result of this is that the materials have declined in price steadily but BHP have managed to keep their share price fairly stable (between 60 & 80) for the last 5 years. I think the honeymoon is over. Traditionally mining has always lagged the stock market in fluctuations so when stock crashes it takes a while for commodities to feel the pinch. When stock starts rising the same is true. Commodities continue to dive, but like winter, we know the end is near. This environment is where smart long term investors can make a lot of money if they have liquidity to snap up the bargains that are about to happen. What I am saying here is that more now than ever, silver and gold are tied to the other commodities. Further, that commodities are tied to the general market, but tend to lag that market by 1-2 years due to the inherent inertia of building mines, refineries and smelters as well as expanding them. To a lesser extent is the inertia of contracts and trade agreements etc. My thoughts only. I am not a financial or investment advisor so take my words are nothing more than wind and opinion.
if the mines are going at fire sale prices it's because they aren't profitable at current commodity prices. The fact that someone in the know is willing to put serious money into mining at the moment tells me that they are likely expecting commodities prices to turn around, otherwise why would they buy something that's going to cost them money long term to keep running rather than making them cash? I suppose they could be planning to put them immediately into caretaking mode and flip them when things get better whether that's in 1 year or 10.
I think they are investing knowing that the bottom is about to hit. If they buy at bottom then it is all profit for them on the way up, so long as the cost of production is controlled. The big factor they have is that they do not have finance bill to pay where the original mine operator will have been in lots of debt. To get control the cashed up folks would buy debts at a very cheap factor, stil the mine into receivership and then offer a buyback on shares as part of the bailout. Or some such stuff. I know a bit about finance but am not an expert.
Cool story bro. Sorry I have to be the one that tells you this, but predicting silver is like those people that stand around roulette tables at Crown Casino coming up with fantasy prediction algorithms. Ask the people who bought at $40 how they're predictions are going, assuming they haven't hung themself year ROFL
I got into silver (and other investments) after a couple of rough nights on roulette. I'm only betting on companies, countries and commodities nowadays, and tend to be "losing" money a lot more slowly ever since (haven't sold anything at a loss yet, or gone belly up on any junior miners). Still sitting at the table and the chips are getting cheaper, so I'm a happy punter. I predict my stack grows until there is a profit to be had and it's convertible into cheap acreage as the property market bubble bursts. As long as that happens sometime over the next 30 years I'm happy. I'm building my future house, one PAMP kilo brick at a time.
The US economy is showing signs of recovery. It's always showing signs of recovery. It's got Buckleys.
yeah but he's only going to tell you after the event, what he did, with a nice chart to show you how much you could have made
BS, and I think you know it. It's not like you to roll out the random anti-T/A cliches? I don't post results that I haven't previously indicated.
So you're saying the entire commodities sector and even the general market is now controlled by the elite secret silver/gold cabal to ensure prices stay suppressed so that their global agenda to piss of the permabulls continues? I should write for KWN.
Yeah Ok - but your indications are usually pretty vague though Seriously though I'll give kudos to Silversale for posting a call, with an explanation of the reasoning behind it (whether I agree with it or not) and without the arrogance of past posts
My indications always include a trigger price and direction. Some may conveniently miss them. My exits are always dependent on the market action, not based on hope. While I have comprehensively posted these risk management methods and calculations here before, it is impossible to predict exactly where the exit will be before it is triggered.
I also give kudos to Silversale. He was ridiculed here for his calls all the way down to his target. Good stuff.
