This page has been archived and commenting is disabled.
Despite Gold and Silver Reaching Records...
“Gold has gone up too fast too far...” “Silver
is in a bubble!” We are starting to see more and more of these warning
statements in the past couple of days. But sentiment and underlying indicators don’t
point at major positivism in the segment at all, on the contrary, investors are
still wary of this asset class.
Despite gold and silver reaching new record highs
every day, sentiment in gold and silver mining shares is far from bullish. Especially
junior mining shares are underperforming significantly nowadays. Senior gold
stocks such as Barrick Gold, Goldcorp and Newmont Mining have performed nicely,
mostly in line with the price movement of gold.
So what’s the deal?!
According to top gold fund manager John Hathaway of the Tocqueville Gold Fund – who was recently
interviewed on King
World News – this may change in the short term. Many hedge funds are short
junior mining stocks, and are investing in the senior stocks instead. Many
investors, including savvy professionals, are still sceptical of the baffling
performances junior mining stocks had in the raging bull market during the ‘70s.
But Hathaway believes these short sellers will get burnt by the upcoming bull rage
in junior mining stocks. They will be forced to buy back positions, setting the
stage for incredible performances fuelled by even more fear, greed and panic.
We at Smart Money Europe are confident the
junior stocks will eventually outperform major gold stocks. But due to a lack
of risk appetite, professionals are still flocking to the seniors.
Under the radar screen, M&A activity in the
junior gold and silver field is picking up. On April 4th, New Gold
agreed to acquire Richfield Ventures for a 46% premium based on the company’s
20-day weighted average price. The average premiums paid by seniors to acquire
promising junior assets are quite high, meaning that the juniors are still very
attractive and far from overvalued.
We expect the gold and silver rally to
continue. Gold is set to take out 1500 USD in the short run and silver is on its
way to 50 USD. If gold and silver would be near a intermediate top, as some
pundits are proclaiming, we wouldn’t be seeing the current ‘steady as she goes’
pace of both metals. Daily price performances in the PM complex would run wild,
with percentage gains up in the double digits for the equities of senior gold miners,
and the junior gold and silver stocks going ballistic!
Today, we aren’t
seeing any of such price action whatsoever. So be right and sit tight, the
famous Jesse Livermore once said!
Follow us on Twitter: @SmartMoneyEU
- advertisements -
I have been buying dust and small nuggets off eBay, and show a lovely profit to date. Problem is, I had to buy a good Ohaus milligram scale to make sure I wasn't getting screwed on the weight, which often happens. Soon as that is paid for, I'm good as gold.
Silver is $40.71 per oz... They Print and Silver will see $100 an Oz... easily, quote me.. bubble the printing machine.. silver has not gone up, the dollar has gone down in value.
When you have leading Obama administration "academic intellectuals" like Christina Romer publicly stating that a weak dollar is good for America and needs to continue to get weaker as an adminstration policy objective, what more can one say?
Sell in May.............................
Has been for 20 years and will be again. Anyone doubt that? Well you'll find out.
And no I'm not short - family's been long for 100 years. But, when elmer fudd public starts becoming a fucking genius then you know where the trade is.................
No bubble in silver. The price of blue jeans and the price of silver have risen at a 1:1 correlation in response to inflation since the introduction of blue jeans in the 1800's. Good pair of blue jeans about 40 to 50 so silver should be about 40 to 50.
I suggest you start reading the Sheeple Times
thesheepletimes.com
You are obviously in the sheeple crowd.
"So be right and sit tight, the famous Jesse Livermore once said!"
I think he said, "BUY right and sit tight."
He said there is no buy side or sell side, only the right side. Meaning that either one is appropriate at the right time.
Could rumours the FED is going to be totally changed/liquidated under the government which will win 2012 elections and gold standart implemented ( or silver) or some form of it lead to scooping of silver and gold without hyperinflation ? That explains a spike during Republican primaries election time ( at the same time USA 2012 q1 recession will be announced).
http://saposjoint.net/Forum/download/file.php?id=2673
e.g Tea Party candidate winning, as a third party candidate, and then following takeover of house and senate by the Tea Party and Ron Paul having a free go on monetary issues?
Would that push silver up again without hyperinflation? Or , when recession hits, hyperinflation is imminent due to too much money in the system vs. too little economic activity?
.
The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.
The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls
OR
When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.
http://www.marketoracle.co.uk/Article24581.html
To check the pressures for buying and selling try Google ...
Search "buy gold" About 21,700,000 results
Search "sell gold" About 446,000,000 results About twenty to one in favor of selling. What's the contrary position?so lets run with this. the total number of pages youve used don't mean anything these days, they are uber unreliable and change by factors of ten on a weekly if not daily basis.
these below are better searches anyway as they indicate the number of sites trying to rank for those terms (ie kws in pagetitles) rather than just documents with those 2 words on somewhere, maybe not even in context.
so search(Google.com)
allintitle:buy gold - About 13,900,000 results
allintitle:sell gold - About 2,210,000 results
still doesnt say much, are the sites saying "we buy or sell" ? or "you wanna buy or sell" ?
and then you have to take into account pro gold people have been writing about gold on websites for very much longer than the johnny-come-lately "we'll buy your gold for fractions of it's price" lot, theyre a relatively recent thing in internet time.
I dont think this tells us much about indicators, contrary or otherwise to be honest
"Facts" are very fickle things, aren't they? Thanks for your clarification.
I am long physical and jr miners and am quite happy with my 4X appreciation in just 3 years. The only problem I see in the future is total governmental nationization of mines. We all should be aware of the silver scarcity issue, and the use of silver by the US military in weapons systems. I see a "national security" issue with silver coming within 5 years. I don't think that it will be outright confiscation but it most likely could be taxed to death by all countries with no place to hide.
I believ that, with the U.S. adding over $1.6 T to our debt, and congress hagleing over cutting $30 B or $60 B, it has become obvious to even the most pollyanish that the dollar is most definately heading for 0.
Long and strong. Worked for Harry Reems et al . . .
Timing parabolic moves too hard for most of us . . .
Last year silver held strong during the end of QE and the crisis in Europe. Despite a short rally for the US Dollar, silver traded sideways until QE2 was leaked. Then we all know what followed.
http://silvercointrader.com/2011/04/how-will-silver-fare-the-end-of-quantitative-easing/
I like real money...period. I buy for value...not priced in dollars so eat me?
Gold and silver are not changing in value at all. What we are witnessing, what most people fail to realizes, is that the paper fiat currencies are losing value. Precious metals appear to be increasing in value, but that is an illusion. If you stand on the sold ground of precious metals and not on the flimsy raft of paper, the real picture becomes apparent.
As I understand the Fed's position, it's trying to 'stabilize' the amount of dollars in the system around 2008. As banks lend less (higher reserves, conservative), there is less velocity to the money and so less dollars chasing the same assets causing deflation. The problem seems to be that 1) the US had too much velocity of cash in 2008 and so over inflated asset values and 2) the money being printed by the Fed to replace 'the hole' is not going into real estate, but speculation in commodities. But, the US has the same amount of assets as in 2008 and probably still less total cash (no net increase in Fiat currency) as seen by the significant devaluation of real estate by 20-40%.
So, I believe we actually have less total currency in circulation (due to less lending despite fed printing), but it's now been reallocated to commodities from real estate. Maybe that's the right answer, but I feel the increase in silver/gold is more due to a rotation of assets than an actual increase in total Fiat - for now. The risk is what if people reallocate back to real estate and the total dollars is still less than 2008 - lower commodities and still no return to 2008 real estate prices?
Silver has the potential to go far higher than forty here people. When all the paper is pulled from the equation, there simply is not enough above ground silver to satisfy demand. If all "paper silver" [unbacked ETF bullshit] disappeared tomorrow, you would have 400 dollar silver. Paper silver exists solely to remove demand away from physical.
It could go higher than a 10 bagger...
I don't doubt that it might pull back but Oil is not the same as PMs in that the Oil market is global and a massively larger than the Silver market.
If it's true that less than 1% are invested in PMs then a mere 1% increase could more than double the price. Now if 10% of the population suddenly becomes aware, or if PMs once again return as money, that 1% turns to 100%...where will the price be?
Anyway I think, unlike many, that the pullback in silver and gold will not be nearly as severe as the 2008 market collapse. People know better now and the DOW is underperforming PMs. Paper will only seem to lower the price but I guarantee that if the paper price of silver drops to $20 the ebay and dealers price will still be at the highs or they will increase the premium to own by 200% or whatever it will be. I said the same when the bears were screaming that gold at 1035 was too high even though the Indian CB had just purchased at that level and the bears thought there'd be a pullback to $800s...and they were wrong. The reason I gave is the same as now...people are waiting for pullbacks and they are buying physical and taking it off the market. What sane person, who themselves thinks there will be a pullback and is ready to buy, can't understand that other people are doing the same and that the pullback will be offset buy new buyers at levels that are higher than you anticipated and had previously purchased at? It's not like a stock in that actual silver is running out and can be extinct by 2020 (according to a USGS report).
This time there will be no major pullback because unlike the markets people that buy and own PMs are not going to get scared and suddenly try to get paper for their real physical assets. I hear the drop will be from $50 to $20 from lots of sources...sell and buy in again they say. I say I bought and keep buying and will not sell but rather buy more regardless of the price.
I get gold, gold, gold, but gold and silver have doubled, tripled, quadrupled - does this imply the dollar is worth 1/2, 1/3, 1/4 of what it was over the last decade? Surely the price of cars for instance hasn't even doubled. Has the Fed printed twice as much cash? Four times? What is the upper end of the dollar drop? Is gold really an anticipation of printing more dollars and if so, how many? Can someone calculate an upper bound of the value of gold in today's dollars and under future Fed printing scenarios?
This is not investment advice.
I'm long physical silver, but am 100% cash right now.
This market is being goosed with QE2 funds via Wall Street. This massive liquidity wave is being sloshed around the globe seeking the highest yield it can find and the commodity bubble is where it is at. IMO, we are going to see a massive, massive market crash so I'm sitting tight... as hard as it may be to sit through this bubble madness. If you doubt my comments about a bubble, consider this: charts don't work; correlations pre 2009 don't work; tsunamis cause markets to rise; robot trading accounts for 89% of all NYSE trading; average holding of a trade is 11 seconds; ETFs have taken over the markets.
When the market corrects, get in big in Sprott and other bullion backed funds... then wait for the collapse of the US dollar. It's coming, but this is only Act 1, not Act 2. When the collapse of the US dollar hits, we'll see hyperinflation start within weeks. Hyperinflation is a different phenomena than inflation because it is based on velocity of money. So when the crash comes, watch how trillions of dollars are dumped and the impact this has on inflation. When this happens, the ONLY tool the US Govt' has is tying the value of the dollar to gold and silver. Despite the position of the US, the US has tremendous resources and human capacity... this won't last for ever.
Your point of silver up x4 versus the dollar down by 75% is spot on. By the way, hyperinflation destroys all forms of government debt.. meaning that the US emerges from hyperinflation with an almost clean slate.
Do you really wonder why Main Street hates Wall Street?
Good luck with your plan. Timing the moves will be tricky. What will the world use as money after the US dollar era? Do you think there will be a new fiat currency unit? Or will there be a paper money backed by something other than a fully unfaithfull government?
Good questions...wish I knew the answers. My gut tells me if the dollar goes to zero, the world trade system will collapse and there won't be much trade for a while. But, isn't gold unlikely to be the answer as the $70 trillion world economy would require gold to trade in millions/ounce? Wouldn't that give an unreal advantage to any country (person) that could mine gold...imagine how many people would be tearing down the mountains for an ounce - or killing people for the fillings in their teeth. Perhaps new system based on baskets of many commodities like oil, wheat, metals?
Things get revalued. When gold is $100/oz, bread is 20 cents a loaf. It's still a relative thing. Don't get all balled-up in maintaining current valuations of anything. Have you not been reading that those in cash will buy cheap farmland? Same thing, different asset classes.
I basically agree. I guess my gut tells me that there will be self-correcting aspects to any assets rise in price. For instance oil hit 140 and then fell to 35. If gold/oil/copper goes up and the dollar down, we'll all start consume less (I am now). The US is awash in cheap clothing, furniture, cars - check craigslist or a thrift store and buy a $100 shirt for $2. If the dollar goes to zero, won't we just stop importing most things for a few years?
Won't the demise of the dollar collapse world demand and commodity prices? Who would buy gold in America if it was $20k/oz? (unless their salaries were immediately bumped up by a factor of 10-15). Also, a meteoric rise in commodities would reopen mines, farmland etc. Increase farming? - there's a load of land that's not put into production in the US and 50 lbs of rice at Costco is still like $10 bucks - and most of us could eat a lot less to stay healthy. Most mining in the US and even Canada has been shut down or hobbled by environmentalism... easily revisable in a real crises? The Japanese have been developing a ship to mine metal rich nodules off the sea floor - gold, silver, manganese etc.
I guess it's easy to see gold doubling at small levels, but like all exponential systems, they become progressively harder to sustain - and we're past the easiest money...what's the endgame?
Here's what I see likely happening.
Once the US dollar is dumped on mass (in effect defaulting) due to some tipping point event, we'll see massive panic which is almost impossible to stop. The only option the US gov't will have is to tie currency to PMs or other storehouses of value. This will be step one to reassert some fiat of exchange so the economy can function, if you can call it that.
The movement of money resulting from the dumping of US treasuries will cause a flood of liquidity to move around the globe seeking safety first, then yield. This is likely where hyperinflation come from. The movement of this volume of money will be a catastrophic event. Gold and silver are good storehouses of value for a period of time. Hyperinflation should erase the majority of US debt... then you'll likely see the G7 (who will mostly have seen its own debt erased via hyperinflation) reset... likely with the US dollar as the reserve currency again... but as one of several (the yuan as a competing reserve currency).
So... gold and silver will be great for a period of time. It's too far ahead in the future to know when to get out, but by then, we'll be living in a very different economic world...
While not trying to sound like a nut, we're in for some social unrest.
What You say is exactly visible in this march 13th silver price prediction:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=40#p31020
http://saposjoint.net/Forum/download/file.php?id=2673
Hyperinflation and/or perception of coming gold standard will hit on Q2 2012, so 1 year from now. In the mean time silver an gold will corrrect by about 40%, no later than early May.
A massive correction is coming, but it is very, very hard to sit back and watch the continued run up.
I learnt a long time ago that before I move into any investment, that I set my pararmeters up in the calm of rational thinking... so when times like this hit, I execute according to plan. I got out of all of my Sprott (physically backed bullion) at $37/oz. Sure I could have hung on, but I know what's coming, so I am happy with my decision. I'm sitting on six-digits of cash waiting for silver to hit approx $20/oz, then I'm in until US dollar defult.
Everything that I'm seeing in the commodity space and the broad trends tells me that I'm right. In terms of timing, you'll never time a bottom or top right on... but if you can be within 70%-80% of either, you'll do very well.
But... it's hard to sit and watch as silver continues it's momentary climb.
You're not right. you're wrong. you don't tell the market what to do; the market tells you what reality is. Your "correction" to $20 will not occur, and you will then be in the typical amateur speculator position, of "what do I do now?" You'll be luckier than you deserve if you ever see $37/oz. again; you have no idea what you're dealing with.
Well have this chat again when silver dips as I have stated.
It would do you good to take your IQ, step back from the trees and look at the broad trends in play. Market volume and data doesn't support your amaturish wish. When the stock market turns, you're going to see a shit load of stops taken out, driving PMs down... and they are going down temporarily.
Don't allow your delusional dreams to take over common sense. You're also not the only one who has an IQ above 145.
Could rumours the FED is going to be totally changed/liquidated under the government which will win 2012 elections and gold standart implemented ( or silver) or some form of it lead to scooping of silver and gold without hyperinflation ? That explains a spike during election time ( at the same time USA 2012 q1 recession will be announced).
http://saposjoint.net/Forum/download/file.php?id=2673
e.g Tea Party candidate winning, as a third party candidate, and then following takeover of house and senate by the Tea Party and Ron Paul having a free go on monetary issues?
Would that push silver up again without hyperinflation? Or , when recession hits, hyperinflation is imminent due to too much money in the system vs. too little economic activity?
Silver is up 60% in three months. Nothing goes in a straight line folks. This is an accident waiting to happen
Dollar straight down totaly justifies it, the disaster waiting to happen is the massive equities bubble. 50% overvalued minimum.
Have you ever noticed on the big down days for the S&P that silver follows suit?
The DOLLAR is an accident waiting to happen. At least silver will retain SOME value.
True, the dollar is a "long-term" accident (10 years).
Silver will be a short-term accident (1 year), but an accident none-the-less.
Which part of 38 don't you understand?
Which part of "nothing goes straight up" do you not understand?
I am more than bullish on commodities, but you newbs need to learn that things get frothy every couple of years or so in this ten year bull market.
A correction is coming, it will begin sometime within the next four weeks....and it will bring pain.
I'm so glad you specified a time line for your "correction"; now I can come back and laugh at you four weeks from now; you are utterly and completely wrong.
Let me guess, you bought silver at over $20?
You're a comedian right...Dangerfield time.
So funny when people think they're the only real deal out there. Certainly you are the only one on ZH that knows anything about markets. Nobody ever would think something rises and falls but you.
Insults are the last refuge of those with a losing case.
Of course things go straight up...The price of real estate after the U.S. won WWII. The price of Plutonium and Uranium after the U.S. dropped the bomb. It's called paradigm shift/phase change/orbit. Open the door on an airplane in flight. The return to equilibirum comes swift.
Or Real Estate from 2003-2007?
Or gold and silver from 1976-1980?
Or the Nasdaq/Dow/S&P from 1980-2000?
Or the Nikkei from 1974-1990?
The paradigm shift you are speaking of is the full life-cycle of a bull-market. That is normally a 20 year evolution, of which we are only halfway through. Even those bull markets end badly for people who overstay their welcome. This is the same thing, on a smaller scale.
Your logic would hold true for the market in stocks as well. Are you as confident that that market is also due for a major correction? If so, then carry on.
Yes, the SPX looks toppy as well, although I would not call the S&P as being in the middle of a bull-market like commodities are, so it is a different animal.
Still, the S&P looks like it may be making a double-top and it is definitely in need of a correction. Add in the enormous number of dollar bears out there and that should be enough to make anyone nervous to be in anything except cash.
Well, anyone paying attention.
Check out the long bond yield, closing in on 4.7%. Stocks are about to get toasted, as the Fed has to drive money toward Treasurys to keep yields from running away.
Just when everyone is sure the market can only go up, the market is about to take a machete to the fools.
BTW, corrections are only painful if you think they're something other than a correction, and sell your silver. When silver went from $21 to $9, I wasn't crying. I was down there with a bushel basket.