Posted on 08/08/2011 1:33:39 PM PDT by OB1kNOb
As I type this, the Dow is down over 600 points. Gold shot from $1,660 on Sunday to $1,717 currently, while silver dropped last Friday to $38.32, then up to above $40 on Sunday, and has dropped today down to $38.94 currently.
What's driving the whipsaw pricing on silver? Thoughts were Friday's downturn was driven by forced sales of silver investors needing to cover other positions, then Sunday saw overseas markets drive price back above $40. Is today's market slide causing more forced silver sales to cover other positions today, or are there other dynamics at work? I read earlier today that this is similar to the market meltdown of 2008 where silver tumbled down from $20's? down to $9 on anticipated lower industrial use caused by market crash. the article speculated that silver may drop down to $20 range this time. What are FReeper metals investor thoughts on this matter? I'm vacillating between buying now at the dip below $40, and waiting to see if the 2008 scenario plays out again. Thoughts?
Silver hesitated because both are due for a large correction sometime in the next 2 weeks
Manipulation via paper silver with no metal behind it. Get your silver while it is cheap. The manipulation has to come to an end at some point, probably a very expensive(to the manipulators) end.
The first is the method of the second.
You posted a long diatribe about gold and silver and its value.
Do you actually own any gold and silver of substance? Because based on your comments, you don’t seem like a precious metals investor.
Everyone should put at least 5-10% of their money into physical silver.
$50 in 1980 is not the same as $50 in 2011. So even if silver hits $50 it is still no where near its all time high in value. Furthermore, there was way more silver lying around in 1980 then there is now. Silver gets consumed industrially while basically all the gold that has ever been found is still around.
I own hundreds of pounds of silver and unfortunately, less than 10 oz of gold.
I maintain a very sober and detached view of PMs because I have studied them for ten years, I have heard it all, and I try to remain apart from “gold standard” “end of the world” “JP Morgan manipulation” frenzies. I know a lot about the production of and trading of the metals, but I am not a trader nor miner nor refiner (though I woud like to be) of same.
When I first began to acquire silver it was from the school lunchroom gals who made change at my jr high cafeteria, in 1965. I exchanged dimes and quarters for dimes and quarters, at face value. I eventually saved about $175 which was a serious pile of money for me at the time. One day, my very own silver window snapped shut and I stopped getting any change after school.
In 2001, I could see that one could not get silver out of the ground for $6. Same with $265 gold. It had NOTHING to do with being a precious metal. It was a price that was below the cost of production for something that I liked. It was like buying a slice of baloney for a penny. You can not birth the cow, feed the cow, raise the cow, slaughter the cow, and bring the product to market for one cent. I happened to like silver and began buying it. I wish I had done so for gold.
Silver is money too. The Silver market is much smaller and much easier to manipulate. The govt will try to manipulate precious metals to save fiat currencies. The will raise margin requirements and other things. Gold is harder to manipulate.
The final govt action is what FDR did - confiscate it. It will be a “patriotic” thing to do.
Agreed.
Via silver derivatives, the big boys have manipulated the market in order to profit on silver’s volatility.
Physical silver will have it’s day.
The house of cards has to fall eventually.
This blog will help you understand the demand for silver
http://harveyorgan.blogspot.com/
It has not been updated today yet. Usually around 7pm EST
Silver is absolutely money and has always been used as, and considered, money.
Wikipedia Quantitative easing is a good place to start. There's loads of references at the bottom of the page.
Ping
I think you are partially correct. It also is being held back by virtue of the fact that silver is heavily used in industry. Industry got a punch in the gut. All of the idustries, across the board, lost huge today. No confidence in the future of the economy. Therefore silver will not used as much for industrial uses, and therefore did not rise like gold. The same thing for platinum, palladium, and copper.
For years, I have read Ted Butler and Dave Morgan’s (and Harvey’s for about a year or so) analyses of COMEX contract changes, up and down and in and out, and frankly, find it somewhat less than useful as a predictive tool. I am not claiming I know more than these guys do; and any silver investor should know these guys and their writings and be glad that these guys stood alone in the wilderness basically for 20 years while nobody gave a crap about silver.
I must have read a hundred times that this many contracts traded and open interest declined this much which means there must be a shortage and I have been reading this type of thing for at least 7 years, when the price was $7 and $8 and one of these days the price was going to skyrocket and the COMEX was going to default.
I have a simpler way now. The price does what it does. I don’t really try to interpret it other than technically, meaning via chart. I usually buy silver at coin shows, or if I have some spare money, I will buy 20 or 40 ounces. I actually just bought 40 rounds from APMEX about 60 days ago. They were $36.low but cost $38.15 delivered. APMEX has these one-day “99 cents over spot” sales now and then. makes it modestly worth it to sign up for their alerts.
Which illustrates my point. Of course, I have the luxury of cost averaging with 6 and 7 and 11 and 13 and 15 and 17 and 21 and 24 and 29 dollar silver. A newbie does not have that.
But after I, experienced silver buyer, bot my $38.15 silver it went down to the 35’s. I didn’t care then and I don’t care now. I’m not in it to make $2 an ounce. I know I am on the right side of this trade and as long as I don’t go too crazy, I should do OK.
The Bible -- the inspired Word of God -- makes many references to both gold and silver being money. Jesus himself was betrayed for 30 pieces of silver. Acts 3:6 "Then Peter said, Silver and gold have I none; but such as I have give I thee: In the name of Jesus Christ of Nazareth rise up and walk." In fact, there's about 160 verses that use both gold and silver.
Note that the Bible says many things are more important that gold and silver... wisdom, eternal life, your own soul.
It's also interesting that the Bible records a time when silver was not money, which was when gold was in abundance. 1 Ki 10:21 "And all king Solomon's drinking vessels were of gold, and all the vessels of the house of the forest of Lebanon were of pure gold; none were of silver: it was nothing accounted of in the days of Solomon."
But the bottom line is that man's attempts to go beyond the Word of God and declare other things are money without a foundation of gold and silver will ultimately fail, just as man's attempts to justify all other sin and disobedience.
The price of gold........who can really afford it now except the heavy investors? 3 oz. for approx. $5,000.............?
Silver has been cut out of the photographic industry for years now. That was the majority of its industrial use in the past. I used to be in the silver recovery business and bought tons of scrap film.
The problem is that the large players have put new dampers on trading and forced future buyers to put up much more money to buy on margin. These new rules have hampered trading, but actual deliveries of real silver are going through the roof.
We are being told there is much more silver available physically than actually is on the market and it has forced the spot price down. It does not have the same sex appeal as gold, but silver sales are hot and it is under priced now; especially in the ‘Morgan’ silver coins.
I am unconcerned that the price is floating where it is. We will see the truth of its value as the dollar continues to tank. The average person cannot affort $3,000/oz silver, but a $10 silver dime or $20 quarter works fine as a medium of trade. Just a matter of time now.
Precious metal when the economy is fearful.
What I currently fear the most in the short term is Bank of America.
In the intermediate to long term it is America.
In the long term it seems to me that silver will be the small denomination of consumer transactions. At the same time its industrial use will be very curtailed.
I pick silver as a good long term buy, ignoring what the Sunday night spot quotes might indicate.
On the other hand it was around $33 a little over one month ago.
Silver hesitated because both are due for a large correction sometime in the next 2 weeks
PLEASE elaborate!
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