Posted on 04/11/2011 5:39:25 AM PDT by DeaconBenjamin
SINGAPORE: Spot silver may surge to record highs above $50 an ounce by the end of 2011, based on technical chart observations by Reuters analyst Wang Tao.
Silver was one of the strongest performers of 2010 and has rallied by a third so far in 2011, to trade at a 31-year high of $41.93 on Monday.
"The super bull cycle appears to have started from a low at $3.53 in 1993, rising during the subsequent 15 years to the 2008 high at $21.24," Wang said.
"That can be labeled as wave "A", and the subsequent sharp drop to the 2008 low at $8.42 labeled as a wave "B"," he said, adding that prices could continue to rise toward $55.
"Wave "C" could take silver to $54.78, the 261.8 percent Fibonacci projection level of the 1993 low to 2008 high."
Elliott wave theorists try to predict market moves by recognizing repetitive patterns or waves on the chart.
Those waves form in almost all types of markets form stocks and foreign exchanges, to commodities and real estate.
Wang noted the current wave "C" is part of the "A-B-C" corrective wave cycle, which often travels much further than the wave "A", a phenomenon called extension.
"The projection of the extended wave "C" based on Fibonacci ratios takes the price of silver to $54.78, which is likely to happen before the end of the year," Wang said.
Waves basically fall into two types, the impulsive wave, which is typically composed of five waves marked in numbers, and the corrective wave which is essentially broken down into three waves labeled with letters.
Fibonacci sequences -- named after the Mediaeval mathematician Leonardo Fibonacci, who identified a sequence of numbers created by adding the previous two numbers -- form the basis of the golden ratio, and a method to predict future market moves.
Examples of the numbers are 3, 5, 8, 13 and so on until infinity. If two adjacent numbers are used to divide one with another, the ratios work out to be 0.618 or 1.618. The larger the pair of numbers, the closer the result to the golden ratio.
"The wave "C" has surpassed the 161.8 percent Fibonacci projection level at $37.07, based on the length of the wave "A", and it is highly likely for the uptrend to extend to the 261.8 percent level at $54.78."
However, the bullish outlook may break down, Wang said, if prices retreat to below $37.07.
"It seems the current sharp surge is due for a correction and a deep fall from here could trigger a bearish reversal if we break below $37."
It’s cyclical. Silver’s rise will start coming to a halt when 1 oz of Gold can buy the DOW, and will almost certainly have ended when 1/2 an oz of Gold can buy the DOW.
Between 1oz and 1/2 oz/DOW, FReepers with silver should start selling (most of) it and putting the gains into real estate or stocks.
The endpoint for silver will come between 800 and 1200 dollars/oz in today’s dollar’s buying power. This point is two or three years off.
Silver will continue to rise as the $$ falls, but reading sheep entrails won’t make it so. The technical analysis is trash
Cut the money supply? Ha ha!
Pay down our debt? We’re past the point of no return on that!
Ha ha ha ha ha... (laughing hysterically)
B.S., you can't eat silver so it will only rise to $54.76
I estimate that silver will be approximately $85/oz by the end of 2011.
And that would still be cheap.
I can’t figure out the fast rise in silver...has to be some kind of Comex short squeeze. If you buy into Sprott silver bullion fund in Canada you have to pay a 20% premium to get in. This is like buying a US Silver Eagle coin and paying $48 for it when silver spot is at $40
Sprott is 100% backed by physical silver. They publish the bar list. You can buy SLV the silver ETF without any 20% premium. Sprott silver is doing great so obviously many don’t trust SLV since it owns silver bullion plus significant “paper silver”. Obviously many are willing to pay that 20% premium just to be sure
Market cap on SLV= 14 billion
Sprott is just short of = 1 billion
This seems to be a good reason.....
Here is the US$ index.......... falling against the world’ currencies
http://www.fxstreet.com/rates-charts/usdollar-index/
Silver took off growing at about 10% a month in September 2010. The gradient has slightly steepened since then, but whatever the change was happened in September.
Big money started buying Silver, either because it has to (due to a short squeeze) or in sober anticipation of profit. I think it’s both.
Great for silver. Gold has not gone up at much...How do you account for that. We always had gold bugs. Now we have silver bugs?
BTW do they charge sales tax on them where you are?
Thanks for reminding me. Here in the UK they charge 20% VAT. 20%! It’s like removing teeth.
But even her Majesty’s customs and excise haven’t got between me and the vast, easy profit to be made on silver - and what’s true for me is even more true for the rest of silver investors.
Investors see the following:
* a floor under the price from China/India demand
* they see that silver stocks above ground are sharply diminishing every year. The amount of investment silver (bullion + coins) is currently 1/3 that of gold by mass.
* silver demand from industry is increasing year on year, and in most cases no substitutes are available. Effected industries will move to hoard if they haven’t done so already.
* demand for silver due to its monetary properties is remorselessly driving the Ag/Au ratio back towards 16:1.
* the silver price has been suppressed by leasing and by the creation of ETFs unbacked by physical. This means that silver is extraordinarily cheap right now.
All these together make for a perfect storm in silver. The headwinds are as follows:
* When silver reaches certain prices then silver reclamation will kick off with an ~ 18 month lead time.
* When silver reaches certain prices then new silver mining will kick off with a ~ 7 year (!) lead time
* All the way up the curve, the general public will sell non-bullion silver into the market, depressing the price somewhat.
In the end the high price of silver will be done in by ... the high price in silver. New mining, reclamation and profit-taking will kick in. But that time is 2013 at the earliest.
http://www.commodityonline.com/news/China-eager-to-buy-silver-at-over-$30-per-ounce-37425-3-1.html
A good article on Chinese consumers loading up on silver. China used to have silver coins in circulation (early 20th century) and kind of a silver standard. Gold was too expensive for China (then a poor nation) for common usage and now too
Silver is becoming a monetary metal again as you say. It is poor man’s gold not just in America which is what I was thinking. It is poor mans gold everywhere as gold gets too expensive
Late Imperial China maintained both a silver and a copper currency system. The copper system was based on the copper cash (wen). The silver system had several units which by the Qing Dynasty were: 1 tael = 10 mace = 100 candareens = 1000 li (silver cash).
In 1889, the Chinese yuan was introduced at par with the Mexican Peso and was subdivided into 10 jiao (角, not given an English name, cf. dime), 100 fen (分, cents), and 1000 wen (文, cash). The yuan was equivalent to 7 mace and 2 candareens (or 0.72 tael) and, for a time, coins were marked as such in English.
The earliest issues were silver coins produced at the Kwangtung mint in denominations of 5 fen, 1, 2 and 5 jiao and 1 yuan. Other regional mints were opened in the 1890s producing similar coins. Copper coins in denominations of 1, 2, 5, 10 and 20 wen were also issued. The central government began issuing its own coins in the yuan currency system in 1903. Banknotes were issued in yuan denominations from the 1890s by several local and private banks, along with the "Imperial Bank of China" and the "Hu Pu Bank" (later the "Ta-Ch'ing Government Bank"), established by the Imperial government.
The Republic of China was founded after the Xinhai Revolution toppled the Qing Dynasty. The Nanjing Provisional Government urgently needed to issue military currency for use in place of the previous Qing currency. Successively, each province declared independence from the Qing and issued their own military currency. In 1914, the National Currency Ordinance established the Silver Dollar as the national currency of the Republic of China. Although designs changed compared with Imperial era coins, the sizes and metals used in the coinage remained mostly unchanged until the 1930s. The majority of regional mints closed during the 1920s and 1930s, although some continued until 1949. From 1936, the central government issued copper ½, 1 and 2 fen coins, nickel (later cupro-nickel) 5, 10 and 20 fen and ½ yuan coins. Aluminium 1 and 5 fen pieces were issued in 1940.
Unfortunately, the 1920s and 1930s saw the price of silver appreciate in the international market. This led to a massive efflux of silver out of China and the looming prospect of the collapse of the national currency. It became evident that China could not retain the Silver Standard. The situation was exacerbated by the multitude of commercial, provincial and foreign banks issuing currencies all at different values.
In 1935, the Central Government enacted currency reforms to limit currency issuance to four major government controlled banks: the Bank of China, Central Bank of China, Bank of Communications and later the Farmers Bank of China. The circulation of Silver Dollar coins was prohibited, and private ownership of silver was banned. A new currency issued in its place was known as 法幣 (Pinyin: fǎbì) or "Legal Tender".
Interesting, thanks for posting.
China silver buying is huge factor... Claims of imminent Comex short squeezes with lack of physical metal to deliver been going on for gold for a few years Now we have claims of COMEX silver having that problem. How come no one has posted on the internet a copy of the papers showing how he was bought out of his silver potion at a 30-50% premium?
The story goes Comex will buy you out at a premium rather than hunt down the 1000 oz silver bars to deliver to you
I heard they’ve paid up to 80% premiums to get out of redeeming in physical silver.
Which makes sense for both sides. The COMEX has no silver - or not enough to satisfy all buyers - and doesn’t dare default. The buyer doesn’t want to be treated as an unsecured creditor, so settles for an 80% profit rather than for physical.
Disclaimer: not completely sure of my facts here. I need to check my sources.
Here are some silver stuffs you may or may not know about
http://tfmetalsreport.blogspot.com/ .... very good educational insider. The posters love him at zero hedge
http://www.youtube.com/watch?v=Et02g9OQ-LM ... hilarious
http://www.youtube.com/user/silverfuturist -— very entertaining
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