Posted on 05/05/2011 8:08:13 AM PDT by babble-on
(summary deck only) Silver futures contracts fall $3.19, or 7.5%, to $39.38 an ounce, their third consecutive decrease since hitting a record $48.58 on Friday. Most other commodities also retreat.
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A speculative bubble that's bursting.
Simple reason for the fall: new regulations in regards to silver futures pricing at the Chicago and New York Mercantile Exchanges. They need to apply that to crude oil pricing and watch the price of crude oil drop to US$70/barrel in about a month.
A little pre-mature I think...
Raising the margins sucked alot of air out of the room.
I said last week when it peaked that it was parabolic and speculators be careful you don’t get whipsawed. Rule #1 in markets - never argue with the ticker. Movement combined with volume never lie.
If you bought silver under $10 bucks and are holding long, you’re good.
Could silver be the sucker punch commodity?
Many buy silver as they can not afford gold,
and the traders know this.
Are they just playing the smaller fish?
Metals are not an “investment”...
that’s where many make their mistake.
I heard an investor today on the tube who made a boat off of Silver by selling at or near the top. He said if Silver goes back up that will signify fundamental problems in the global economy. I’m buying more at $28.00.
Ding! Alternative currency due to devaluation, and store of value till the storm passes. That’s why people should be buying silver.
This crash will allow me to buy maybe 1.5 times as much silver this month as I ever expected to, assuming it goes down to 33. This is terrific news!
I’m expecting the price to ramp up again sharply after the 20th May. June and July are COMEX delivery months, and holders of silver in COMEX warehouses are withdrawing their silver from salable status: 20% in just one week. There is a run on physical silver and COMEX only has enough to meet maybe 6600 contracts. This is extremely bullish.
If the COMEX defaults on delivery in June then silver will go to 100.
If the COMEX staves off delivery in June by paying cash premiums, but then defaults on delivery in July then silver will go to 100.
May has handed us the most enormous opportunity in Silver. It’s like JPM just dropped a crate of silver bars on my doorstep. Thanks guys!
I saw a report that Mexico’s central bank bought 93.3 metric tons of silver since January. They are taking a huge hit right now.
Every component of the CRB index is down sharply. Even crude oil close to breaking back below 100 bucks. Maybe the Fed was right about commodity inflation?
Good point. They raised margins five times in a week or so. The only reason for doing that was to wipe out small investors who brought on margin.
Not a problem for me (I’m glad to say). Margin-buying in Silver is a Venus flytrap that will eat you alive. Only ever buy what you know you can pay for.
That's the point I was making, whether the current price drop proves to be a total crash or not. An investment has value and the potential to generate income of itself, not simply because the buyer hopes to sell it to someone else at a higher price.
With tulip bulbs, you could at least plant them and enjoy a pretty flower ... and you can make your silver into something attractive or useful, if you have the tools and skill.
Glad I sold some of my silver when it was kissing $50 an ounce.
Most of my silver is in collectible coins; I'm a numismatist. For me, it's a hobby and an investment - but not the major part of my portfolio, to be sure.
The dollar just spiked up due to Trichet’s refusal to raise the Euro rate (which rate-hike had already been priced into the market). Maybe that’s what you’re seeing, depending on the timing?
True, the metals are prone to this, but this is a metal smack down to protect some serious silver shorts of the TBTF banks.
The CME has raised margins FIVE TIMES in less than two weeks.
That is causing the silver price drop.
I would turn my silver into anti-biotics before I’d be able to make anything “pretty” out of it.
What’s your low end strike price?
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