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Perfect Storm For Gold & Silver - Silver Surges 6% In Week To $40.28 – GFMS Forecast $50/oz This Year

Tyler Durden's picture


Submitted by Gold Core

Perfect Storm for Gold & Silver - Silver Surges 6% in Week to $40.28 – GFMS Forecast $50/oz This Year

Gold and silver reached new record all time and 31 year highs again yesterday and this morning – both nominal highs. Silver has surged to a new 31 year nominal high of $40.28/oz and may now target next resistance at $50/oz – the 1980 nominal high.

Gold is now targeting $1,500/oz after just reaching new nominal highs at $1473/oz. Gold is higher in all currencies this week but especially the beleaguered yen which has fallen 4% against gold in the week so far.

The gold and silver markets are experiencing a perfect storm due to the heightened level of geopolitical and macroeconomic risk.

Debt concerns in the eurozone and in the US (possible government shutdown), surging oil prices due to geopolitical risk in the Middle East and Africa, deepening inflation and the Black Swan risk of natural disasters (another Japanese earthquake has led to problems at a second nuclear plant - Onagawa) is leading to continued safe haven demand from a minority of astute buyers.

These include high net worth individuals, hedge funds, pension funds and central banks.

“Speculative froth” remains subdued as seen in the COT and ETF holdings data.

The vast majority of the public in the western world do not know how much an ounce of gold or silver bullion is. A small minority know how to invest in or buy bullion and an even smaller minority having any allocation to gold, let alone silver, whatsoever.

The majority of the western public’s only experience with regard to gold and silver is with dodgy “cash for gold” merchants who have lured millions of people to sell the family gold and silver (jewellery) in exchange for fastly depreciating euros, pounds and dollars.

In years to come people will be shocked by the ignorance of the western “cash for gold” phenomenon - while people in the Middle East, China, India and Asia continue to buy gold and silver as timeless stores of value rather than as an “investment” to be timed and bought and sold for commercial gain and profit.

The majority of the western media continue to completely ignore and not report the precious metal markets – especially silver.

Even in the face of surging oil and food prices and deepening inflation and after consecutive days of record nominal high prices, most media in the UK and Ireland barely reported the news – let alone analysed it for the benefit of their readers.  

The notion that silver is a bubble continues to be propagated by many. Indeed, the Financial Times reports that ‘Silver set to reach $50 before plunging in value, study says.’ The study is by GFMS who have been at best lukewarm on silver for a number of years.

Silver’s gains have been sharp but the fundamentals remain very sound due to a very limited supply and a very substantial increase in investment and industrial demand especially in China and Asia.

The GFMS World Silver Survey released yesterday shows that investment demand increased by a very 47% in 2010 and industrial demand is very robust.

Silver’s nominal high of $50/oz is looking like it will be seen sooner rather than later given the degree of demand and momentum. Any sell off will likely be short but sharp prior to a resumption of silver’s secular bull market and silver’s inflation adjusted high of $150/oz remains a long term price target.

The long term silver chart above shows how silver rose from $1.28 to $49.45 (on a weekly basis) from 1971 to 1980 or a rise of 38 times. Given that the conditions today are far more bullish than they were in the 1970’s silver may replicate this performance.

Were silver to replicate the 1970’s performance it would have to rise from a low of $4.10 in 2001 to over $150/oz – which as it happens is the all important inflation adjusted high.
Whether silver will plunge or not at some stage is irrelevant if one is buying for diversification, safe haven and store of value reasons. When silver reached $10, $15 and $20 there were similar warnings which may have dissuaded some of the public from buying for the long term and diversifying.

Rather than attempting to predict the future price movement of markets, the western public would be better served by acting like their Eastern counterparts and buying bullion for long term financial insurance and store of value reasons rather than speculation and making short term returns.

Diversification and wealth preservation is fundamental in these uncertain times.

Max Keiser’s “Silver Liberation Army”

An increasingly important phenomenon in the silver market is that of the “Silver Liberation Army” which appears to be going viral. Former Wall Street broker and current broadcaster and journalist Max Keiser wants to put silver in the hands of the people in the belief that it will stop banking corruption and allow people to take back some of the wealth that has been transferred to bankers.

This is leading to a small but growing minority of hard money advocates and others unhappy with government and banking corruption and abuses to buy silver coins in volume and through the use of viral messages, video etc encouraging the rest of the public to do the same.

The Million Ounce March is a campaign started by Keiser to encourage the public to protect themselves against inflation by purchasing silver. Money printing leading to inflation, hyperinflation and destruction of fiat currencies has been seen throughout history and Keiser rightly believes that silver will protect people from this and other risks posed by the financial system dominated by Wall Street banks.


(FT) -- Inflation concerns drive silver above $40

Silver is the focus of a buoyant commodity complex after the grey metal hit $40 an ounce for the first time since 1980 as traders ride the “bullion-as-inflation-hedge” bandwagon.

The same strategy has also on Friday driven gold to a fresh record of $1,469 an ounce, with investors pouring funds into precious-metal exchange-traded funds.

The SPDR Gold Trust, the world’s biggest gold-backed ETF, said its holdings of the yellow metal had risen to 1,217 tonnes, the most since mid-March, while the iShares Silver Trust’s holdings hit a record high of 11,193 tonnes, according to Reuters.

Silver is up 65 cents to $40.16 an ounce, advancing 30 per cent in 2011, while gold is up 0.8 per cent to $1,468 an ounce.

The latest burst of bullion buying seems to be predicated on oil’s surge to its highest levels since August 2008. Worries about supply from Libya and Nigeria, ahead of elections in the large West African exporter, have pushed Brent crude above $124 a barrel, feeding input cost inflation fears.

(Bloomberg) -- Silver 2011 Price Forecast Raised 20% at Morgan Stanley 

Morgan Stanley raised its silver price forecast for 2011 by 20 percent to $31.39 an ounce, according to a report e-mailed today.

(FT) -- Silver set to reach $50 before plunging in value, study says

The silver market is likely to continue its spectacular ascent and to touch a record high at more than $50 a troy ounce this year – but could then crash back to earth, according to new forecasts by GFMS, a leading precious metals consultancy.

The grey precious metal has soared 121 per cent during the past 12 months to touch a 31-year peak of $39.73 this week as investors, disillusioned at the actions of central banks and governments, bought it as an alternative to paper currencies.

“In the short term, things have moved spectacularly fast because of the amount of money from investors,” said Philip Klapwijk, executive chairman of GFMS. “I think $50 will probably be taken out this year.”
However, Mr Klapwijk warned the market could suffer a steep correction if investors were to withdraw their funds because without their buying, the supply of silver would be expected to exceed demand. “When you see prices moving up so fast you have to be careful. There’s no convincing economic reason for why this is happening. It is still a market with a very large surplus,” he said.

Investors ploughed $5.6bn into the $21bn-a-year silver market in 2010, according to statistics published on Thursday by GFMS in its annual report on the silver market published by the Silver Institute, a mining industry group. Mr Klapwijk forecasted investment in silver would rise by about 50 per cent in dollar terms to hit $8bn this year. A surge to more than $50 an ounce would see silver surpass its peak of 1980, when the billionaire Hunt brothers notoriously attempted to corner the market. In its report, GFMS said that there had been “a major move into the silver market by a number of hedge funds”.

Mr Klapwijk said one possible trigger for a correction in the silver price could be a decision by some investors to cash in: “I can’t help but think that if we hit $50 we could see a significant correction driven by profit-taking.”

Non-investment consumption of silver is rising sharply, with industrial usage up 20.7 per cent last year, but supplies are also increasing.

Total supply increased by 14.6 per cent last year, driven largely by a dramatic swing by producers to start a fresh wave of hedging, or selling their output forward at fixed prices, a trend which has continued in the first quarter of this year


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Fri, 04/08/2011 - 07:54 | 1149224 tellsometruth
tellsometruth's picture

I believe we will hit $50 by the end of June, expect a little pull back to come next week to 37-38 where I will buy mooaarr!

Fri, 04/08/2011 - 07:57 | 1149235 tellsometruth
tellsometruth's picture

Will it come to this for Barry Obama/USD? I love the coincidence that the Protaganist in this clip is named Barry too.  (Beerfest Zjay clip)

Fri, 04/08/2011 - 07:59 | 1149242 Long-John-Silver
Long-John-Silver's picture

Paper Silver perhaps but the Chinese are in the process of cornering the physical market. The cornering operation by the Chinese has been so successful the US and Canadian Mints have no Silver for coins.

Fri, 04/08/2011 - 08:43 | 1149369 mrgneiss
mrgneiss's picture

Not saying this isn't the case, but links would be nice

Fri, 04/08/2011 - 08:55 | 1149408 Turd Ferguson
Turd Ferguson's picture

POSX = lousy

WTI = rolling

DrC = rebounding

PMs = continue higher

Fri, 04/08/2011 - 09:18 | 1149489 tarsubil
tarsubil's picture

I remember you saying something about a pull back in silver to about 36 or something. Is that still a possibility?

Fri, 04/08/2011 - 09:30 | 1149537 Turd Ferguson
Turd Ferguson's picture

I'm sorry, tarsubil. I try to keep everybody posted on my ZH-inspired blog.

After about 48 hours of nothing but resilience in silver, I bought back into some May 40s and 41s yesterday.


Fri, 04/08/2011 - 09:57 | 1149612 tarsubil
tarsubil's picture

Ah crap!

Fri, 04/08/2011 - 09:49 | 1149589 RockyRacoon
RockyRacoon's picture

It's back to the drawing board with ye, Long John.

U. S. silver coins are required by law to be made from silver mined in the U. S.

So the foreign silver markets have no direct bearing on that.

This is one of the goals of Dr. Paul's inquiry into the coinage problem.


Bullion Demand Overwhelms US Mint
Fri, 04/08/2011 - 10:56 | 1149842 DosZap
DosZap's picture


They are NOT using Silver from US mines 100%

They are using a foreign contractor for silver blanks.

They are breaking the law.

Fri, 04/08/2011 - 11:13 | 1149941 Questionmark
Questionmark's picture

AFAIK the law only states that they have to use US silver so long as there's still any available.

Fri, 04/08/2011 - 11:32 | 1150038 RockyRacoon
RockyRacoon's picture

U. S. silver is shipped to manufacturers in Australia to be made into planchets and then back to the U. S. for coining.   I won't comment on the insanity of that, but it is the case.

Fri, 04/08/2011 - 11:12 | 1149922 Pool Shark
Pool Shark's picture


Hey Rocky!

I'm lovin' those US Mint proof AB Quarters I got a few weeks back. Who'd have thought I'd already be up on the deal? Proof US Mint silver coins worth more in melt value than I paid for them just three weeks ago!

After increasing the price from $32.95/set to $39.95/set, I see the Mint has now pulled the new price!

Silver is increasing too fast for the Mint to keep up with it!

btw, you trolls out there: here's $5; dig me some silver out of the ground...   ;-)


Fri, 04/08/2011 - 11:38 | 1150051 RockyRacoon
RockyRacoon's picture

I'm glad you took advantage of the situation.  I loaded up at $32 and again at the last price.   Can't go too wrong with .9 oz of pure silver in 5 proof quarters. 

Heads up:  Take a close look at the 2011 issue of the silver quarters:

2011 United States Mint America the Beautiful Quarters Silver Proof Set™ (SV5)

Price: $41.95
Fri, 04/08/2011 - 10:11 | 1149653 bbq on whitehou...
bbq on whitehouse lawn's picture

I have been wondering about this myself. If China were to try for a resurve currency and back it with silver not gold. That would be a game changer. Possably war.

If your going to create a reserve currency you need to make sure you have control of it. Buying up all the silver would do that.

Fri, 04/08/2011 - 07:52 | 1149225 psyclopz
psyclopz's picture

Rubbish report from mainstream papers. In the long haul, the sky is the limit for silver..

Fri, 04/08/2011 - 08:52 | 1149392 Pladizow
Pladizow's picture

Look out below - DXY breaks 52 week low!

Fri, 04/08/2011 - 08:53 | 1149404 overmedicatedun...
overmedicatedundersexed's picture

Pladizow, please hit the enter key more so we all can get the benefit of those tata's

Fri, 04/08/2011 - 07:56 | 1149229 Long-John-Silver
Long-John-Silver's picture

Mr Klapwijk is an idiot.

Mr Klapwijk warned the market could suffer a steep correction if investors were to withdraw their funds because without their buying, the supply of silver would be expected to exceed demand.

Fri, 04/08/2011 - 08:04 | 1149258 Snidley Whipsnae
Snidley Whipsnae's picture

Klaptrap is obviously unaware that billions of SE Asians, Indians and Mid Easterners are buying PMs. Another example of an Americacentric 'economics advisor'...

Fri, 04/08/2011 - 08:11 | 1149272 EscapeKey
EscapeKey's picture

"If people stop buying AAPL, the share price will drop".

That's some mighty fine work, Lou.

Fri, 04/08/2011 - 07:55 | 1149230 aVian
aVian's picture

great time for an IRS tax audit

Fri, 04/08/2011 - 07:57 | 1149231 DavidC
DavidC's picture

Hmmm, while every time a Tomahawk missile gets fired and obliterates kiolgrams of Silver, I'll stay long.


Fri, 04/08/2011 - 08:11 | 1149275 EscapeKey
EscapeKey's picture

I still haven't seen the actual source for this. Every time I search, I get into a circular list of links, with no actual source backing.

Fri, 04/08/2011 - 08:56 | 1149388 silvertrain
silvertrain's picture


Fri, 04/08/2011 - 10:19 | 1149684 Vendetta
Vendetta's picture

There was an article over on SilverBearCafe that wrote this, again is was without a reference.  However, it is irrelevant to the silver market except war in general is bullish for PMs.  I was a rocket and missile engineer years ago and there is not that much silver in the systems.  Batteries were regular 'ol lead acid type (good quality) and only had to last 5 to 10 minutes (enough juice for some ground testing and enough to last the 'mission'). Transmitters and receivers had gold plated connectors, not much silver and it doesn't take much gold to plate the connectors and contact surfaces (even on circuit boards).  I'd guess there is less than 1 ounce of silver in any of the systems unless the warheads require it which I doubt. 

Fri, 04/08/2011 - 07:57 | 1149233 Debtless
Debtless's picture

"Morgan Stanley raised its silver price forecast for 2011 by 20 percent to $31.39 an ounce, according to a report e-mailed today."


Fri, 04/08/2011 - 08:51 | 1149398 Vagabond
Vagabond's picture

I got a good giggle out of that too

Fri, 04/08/2011 - 07:56 | 1149238 tek77blu
tek77blu's picture

excellent interview with peter grandich on silver, gold, and the mining stocks:

Fri, 04/08/2011 - 08:03 | 1149253 Snidley Whipsnae
Snidley Whipsnae's picture

'Excellent interview'??? If you want to hear Grandich's life history, his favorite pro sports players, his views on spirtualism, his advice to sell anything that has gone up triple digits, etc.

Fri, 04/08/2011 - 07:58 | 1149240 gordengeko
gordengeko's picture

Don't forget, all of the MSM on the planet is owned by 5 companies.  They are all in with the large banks with financial interests in fiat.  It wll be impossible for them to ignore soon and they know it.  Silver is their worst enemy, not gold.  This is a financial battle, their recourse will be to crash the market again unfortunately and insitute a global currency controlled by them again.  Just my opinion

Fri, 04/08/2011 - 09:03 | 1149431 gordengeko
gordengeko's picture

for the junker, all it takes is a little initiative to do some research and you will see for yourself.  Unless you are a troll, which case you know the deal already.  And for those of you who think you are free and that these people don't know everything about you already.  go to and type your name in.  Anyone can pay a few bucks and know more about you than you know about yourself.  Imagine what you could do with a little intelligence and unlimited fiat??  FYI for to the privacy tab at the bottom to remove yourself.  Fuck this, it's time for a change.

Fri, 04/08/2011 - 09:06 | 1149440 overmedicatedun...
overmedicatedundersexed's picture

I will call a top in PM's when we can call a bottom in sooner.

Fri, 04/08/2011 - 11:21 | 1149996 Triggernometry
Triggernometry's picture

I warned all my family, friends, and colleagues about spokeo when I first heard of it last summer. Some took it seriously, others blew it off. Third party info policies allow aggregated data of individuals to be traded between marketing firms.

I've always had my facebook locked down, so I actually couldn't find myself on spokeo, but I found my father and he's never touched social media. The data on him was undoubtedly collected from various open sources- local tax filings, magazine subscriptions, etc, but its scary to think what will come next.

As for your previous post on mind control; the more innocuous term currently in use is "social influence." You can find a declassified CIA research on the subject at the research was done at Stanford by none other than the famous Dr. Zimbardo. If you recall, he devised the inmate/guard experiment which was forever banned because the "guards" immediately began abusing the "prisoners." The paper on resisting social influence is a great read for anybody interested in strengthening the mental defense to being misled/misinformed.

Fri, 04/08/2011 - 12:19 | 1150240 LudwigVon
LudwigVon's picture

the privacy tab at the bottom to Verify yourself

Fri, 04/08/2011 - 09:50 | 1149598 Creed
Creed's picture



remember the full court press in the media about how pm's were overvalued blah blah blah back in what, January?

Then there was a correction lasting 1-2 weeks.

They'll either jawbone it down again or pull liquidity to rein the markets in, same result.

Fri, 04/08/2011 - 10:24 | 1149713 gordengeko
gordengeko's picture

Remember it very well.  Caused a tremendous buying op in AGQ at 118-130, I was trying to get a few people to buy physical but only 1 did the rest bought AGQ.  They will believe me soon and transfer that wealth (or at least some of it) into physical.  Which is why I believe we won't see 30's again, the average investor doesn't quite understand whats going yet.  Greed will set in and we'll see 50 very soon.

Fri, 04/08/2011 - 11:07 | 1149893 Creed
Creed's picture

yep, and addenda

I mentioned on a thread last night that Mr. Walmarts statement concerning serious price inflation due over the next several months may be the awakening that brings the herd to the sparse pm table

(not that there hasn't already been serious inflation over the last few years alreaduy; I suspect that joe 6 pack is about to get slapped in the face with it; I'm even shocked and I expected this;

3 WEEKS after Katrina '05 some items we buy regularly at Walmart went up over 20%)

Fri, 04/08/2011 - 08:01 | 1149244 Snidley Whipsnae
Snidley Whipsnae's picture

To the moon with PMs. The train is leaving the station...get on or stay home.

Fri, 04/08/2011 - 08:02 | 1149247 ParaZite
ParaZite's picture

50 dollars an ounce for silver.

I have the strangest boner right now. 

Fri, 04/08/2011 - 08:14 | 1149279 Long-John-Silver
Long-John-Silver's picture

I was up last night watching Silver break $40. Strangely, it was like watching exceptionally good porn.

Fri, 04/08/2011 - 08:25 | 1149320 youngman
youngman's picture

That shows us just how old you are.....

Fri, 04/08/2011 - 13:54 | 1150636 OldTrooper
OldTrooper's picture

Wise, not old, youngling.

Fri, 04/08/2011 - 08:22 | 1149312 Al Gorerhythm
Al Gorerhythm's picture

Does it look like a hockey stick?

Fri, 04/08/2011 - 08:03 | 1149256 ak_khanna
ak_khanna's picture

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


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.

Fri, 04/08/2011 - 08:13 | 1149274 Snidley Whipsnae
Snidley Whipsnae's picture

PMs are moving up on fiat printing, instability in Mid East, Japanese disasters, extremely heavy buying in SE Asia/India/Mid East, etc. If the 'banksters' could stop PMs in their tracks they would do so. No central bank's currency looks good when PMs are rocketing up.

Fri, 04/08/2011 - 08:14 | 1149282 Long-John-Silver
Long-John-Silver's picture

Very soon no one will exchange PM's for Fiat Bank Paper.

Fri, 04/08/2011 - 09:12 | 1149472 Pladizow
Pladizow's picture

AMEN - and fuck the hired junker trolls!

Fri, 04/08/2011 - 10:28 | 1149729 Vendetta
Vendetta's picture

they forgot to incorporate the black swan PM price control algorithm into the shake and bake software package.

bool controlAgPrice ( short AgControlParam)


    if didnotfakeeveryoneout

       call JimCramer



       return true



     return true


Fri, 04/08/2011 - 15:24 | 1150995 sullymandias
sullymandias's picture

what is that PHP?

Fri, 04/08/2011 - 10:30 | 1149741 Vendetta
Vendetta's picture

they forgot to incorporate the black swan PM price control algorithm into the shake and bake software package.

bool controlAgPrice ( short AgControlParam)


    if didnotfakeeveryoneout

       call JimCramer



       return true



     return true


Fri, 04/08/2011 - 08:04 | 1149257 tarsubil
tarsubil's picture

My totally unqualified opinion is that silver is playing catchup to gold and will slow down in a couple years.

Fri, 04/08/2011 - 08:06 | 1149259 Twindrives
Twindrives's picture

Thanks Ben.  You da' man!        

Fri, 04/08/2011 - 08:06 | 1149264 Vlad Tepid
Vlad Tepid's picture

A pull back would be so cool.  <Fingers crossed>

Fri, 04/08/2011 - 08:10 | 1149270 TaxSlave
TaxSlave's picture

Where's the effin' dip???  Cash piling up.

Fri, 04/08/2011 - 08:15 | 1149288 Long-John-Silver
Long-John-Silver's picture

The train has started moving. If you run now you MIGHT catch it........

Fri, 04/08/2011 - 08:16 | 1149284 overmedicatedun...
overmedicatedundersexed's picture

people(countries & institutions) who are awake are using the PM's as has been said often here on ZH as wealth protection vs paper..why would we sell if that is the reason we buy??

no major correction for as more sheep awake more buyers appear.

they should force all to watch that Romer interview posted will chill even the most slumbering good citizen.

Fri, 04/08/2011 - 08:30 | 1149340 tarsubil
tarsubil's picture

Wealth protection is essentially for savings. Sometimes you need to buy stuff (like small arms, Pb, water filtration systems, TP, seeds, etc) and take it out of savings. That would be why people sell. You don't have to pay more to buy back in, you just get less oz's. It will still be a better way to save then a 1.19% savings account (wow, really American Express? 1.19% when inflation for food and fuel is over 10%? what a deal? do you want me to grab my ankles now?)

Fri, 04/08/2011 - 08:17 | 1149286 Internet Tough Guy
Internet Tough Guy's picture

The cartel could cap silver advances the same way they do gold. The fact that they don't makes me believe they are using silver as a pressure release to prevent more buying in the real threat, gold.

Fri, 04/08/2011 - 08:17 | 1149287 Psquared
Psquared's picture

My family owns a lot of silver in the form of flatware, serving pieces, cups, coffee pitchers, trays and the like. Most of these are stirling silver and anywhere from 50 to 100 years old. Its the real stuff.

So I am wondering ... is that a good way to hold metals as an investment? My guess is we have over 100 pounds of stirling silver. It is not coins and not buillon, but if melted down are these items worth $40+ an ounce?

Fri, 04/08/2011 - 08:21 | 1149302 Long-John-Silver
Long-John-Silver's picture

Silver is Silver. It makes no difference what form it takes. If it has a number like 925 and recognised brand name it's value is $40 per ounce if melted.

Fri, 04/08/2011 - 08:23 | 1149311 Internet Tough Guy
Internet Tough Guy's picture

Smelter will pay you less than melt. They have to make money too.

Fri, 04/08/2011 - 08:32 | 1149341 Long-John-Silver
Long-John-Silver's picture

Yes of course and it's not 999 Silver. It's intrinsic value must be taken into account however. I would be more than happy to pay more than spot melt value simply because I would enjoy using it for what it is.

Fri, 04/08/2011 - 08:35 | 1149349 tarsubil
tarsubil's picture

Why melt it? Their utility and age add value on top of the price of the material.

Fri, 04/08/2011 - 09:56 | 1149613 RockyRacoon
RockyRacoon's picture

Kinda like a 1932D quarter.  You wouldn't want to melt that little jewel.

"Utility" has more than one meaning.   There is the use as a sugar/creamer, or as a space filler in a coin collection.   Both are valid.

Fri, 04/08/2011 - 08:44 | 1149373 johnQpublic
johnQpublic's picture

i'll take 50 lbs of it if you want to get rid of it....and i'll pay spot for that sterling.....925 like its .999

Fri, 04/08/2011 - 08:46 | 1149377 mogul rider
mogul rider's picture

When the zombies come and take your family to the camps, I'm not sure that'll get you out of the concentration camp like a Silver Maple or Eagle will.


Your call.  (sarc)

Fri, 04/08/2011 - 14:41 | 1150818 Urban Redneck
Urban Redneck's picture

Once it is melted down it can't be turned back.

And it can always be melted.

100 lbs of flatware weighs the same as 100lbs of bars, unless there is some pressing volume issue.

Fri, 04/08/2011 - 15:27 | 1151007 sullymandias
sullymandias's picture

You've got it now - hold it. Selling it to buy silver in another form is just a giveaway to your dealer.

Fri, 04/08/2011 - 08:19 | 1149300 X. Kurt OSis
X. Kurt OSis's picture

This trade is far from over at $50. The fat pitch was last September but this is not over. I don't think we're going to get a pull back. I think we'll pass the point of no return if the asshats in DC shut it down, at which point we'll officially be in the end game.

I would have thought we'd get a big reversal if there was a massive risk off move in everything but markets don't seem to care about black swans anymore. This bitch is on autopilot now.

The fuckers at the top of this ponzi are rearranging the deck chairs on the Titanic. Time to grab a life vest and head for the rails.

Fri, 04/08/2011 - 09:21 | 1149500 Pladizow
Pladizow's picture

Were watching the dismantling of an empire. When an empire implodes it first collapses at the fringe - this is what is going on in the middle east.

Add this to the fact that Wasington cant even stay open for business after they have been given more money then god.

Good game America - thanks for coming out!

Buy and hold PM's unill there is world peace and zero dedt!


Fri, 04/08/2011 - 09:50 | 1149599 X. Kurt OSis
X. Kurt OSis's picture

Despite the heavy distraction of your avatar, I was able to read your reply and this is well said.

Fri, 04/08/2011 - 08:21 | 1149301 yabyum
yabyum's picture

I walked im to the coin guy's shop on the day AG hit 30$ and wished him "happy thirty day". He rolled his eyes and took my order....I should pay a visit today;)

Fri, 04/08/2011 - 08:31 | 1149338 Scoobywan
Scoobywan's picture

When I cashed out at 37, the guy at the coin shop didn't seem to0 ticked off that I had made $24/oz minus premiums off him in 3 short years.

Never very busy at this place and its the only game in town when it comes to buying and selling PM's. I asked about the buying activity and he said it was strong.

Hell, he even rounded up the spot price to make the $/oz an even number after subtracting premium. I paid $.95/oz to sell.

That seems like a more than fair premium.

I want to jump back in badly, but something looks fishy. I know I know the fundementals are there, but like I said, something looks fishy.


Fri, 04/08/2011 - 08:45 | 1149368 mogul rider
mogul rider's picture

well played - it's only profit if you take it.


relax, wait, and enjoy the carnage as the fish come in the pool.

Fri, 04/08/2011 - 09:10 | 1149450 Bicycle Repairman
Bicycle Repairman's picture

"When I cashed out at 37"


Fri, 04/08/2011 - 11:38 | 1149624 RockyRacoon
RockyRacoon's picture

You didn't "make" anything off the coin dealer.  You made your money off the market.  Or, more realistically, you could say that you were successful at treading water.  There is not a "profit" as the dollar is dropping.

Rest assured that the dealer sees these things as merchandise.   You'd be better off doing the same.

Fri, 04/08/2011 - 15:30 | 1151023 sullymandias
sullymandias's picture

That's right. A dealer makes money making deals.


A dealer has to maintain an inventory, and so has what can be considered (if business is not growing or shrinking) a constant long position the metal. So they are mildly happy to see the price go up, but they are happier to see you come in the door (and keep coming back).

Fri, 04/08/2011 - 16:22 | 1151253 RockyRacoon
RockyRacoon's picture

Yep.   The price goes up and I'm buying more than selling, and visa versa.  It's all in a day's work.

Fri, 04/08/2011 - 10:47 | 1149810 Vendetta
Vendetta's picture

I agree that things look fishy.  I tend to think the decepticons are setting the stage for a big takedown of all the markets including a big clubbing of the PM markets for their last hoorah.  While everyone is in shock, pain and anguish panicing over their losses, the 'little people' see the PMs crashing too (all the while shortages still exist) and don't see an escape from the carnage.  Then, after a calculated pregnant pause, the decepticons swoop in to physical PMs buying anything and everything physical that isn't nailed down while laughing at the destruction they've wrought.

Fri, 04/08/2011 - 11:39 | 1150074 RockyRacoon
RockyRacoon's picture

Thanks for your comment, but the same thing has been said since silver broke $12.  And they'll be saying it all the way thru $60+.

Fri, 04/08/2011 - 15:33 | 1151035 sullymandias
sullymandias's picture

Letting silver go >$40 as a setup for a big takedown is something like, Idunno, attempting to harness energy from a "contained" nuclear reaction.


So long and thanks for all the radioactive fish

Fri, 04/08/2011 - 08:21 | 1149310 Scoobywan
Scoobywan's picture

I don't see how they can continue QE with the PM's doing this shit. They talk about food and energy and consumer goods, but they can't speak of what really concerns them (the PMs), that will just create more price rises.

At the same time I don't see how they can end QE either, they are in a corner for sure.

I'll just sit on my ever more worthless pile of cash for the moment, 40/oz is too rich for my blood, and last I checked every company I do business with doesn't accept anything but FRNs or some form of them.



Fri, 04/08/2011 - 08:49 | 1149383 SonnySkyy
SonnySkyy's picture

With the Fed buying 70% of treasuries before the second-largest foreign buyer was swallowed by the Pacific Ocean, I don't see how QE3 can be anything but a mortal lock at this point.

Fri, 04/08/2011 - 11:10 | 1149921 DosZap
DosZap's picture

There willl be no QE 3(right away).

Metals will crash, and equities will follow (short time later).

Then, the people will scream bloody murder, and demand something be done........then we get QE3, and before that you back the truck up on the correction(it will be a doozy).

Sat, 04/09/2011 - 18:51 | 1153971 SonnySkyy
SonnySkyy's picture

I'm considering that possibility as well, but I have a question.  If they do announce no more QE after June, most PMs investors already know it's a delay and not an end.  The numbers don't lie, we don't have buyers for our debt. When spot prices crash with stocks, equities and everything else over the summer, there's going to be a mad rush on physical.  At that point, will the fiat spot price have any bearing on actual value?  I know if silver fell to $30 overnight tomorrow, there's no way in hell I'd be able to get it at that price on eBay the next day.  Won't that hold true for our PMs dealers when spot is falling, we're still buying with both hands and they aren't able to keep any metal in stock?  Doesn't the falling spot price go out the window when it becomes scarce are we're all willing to pay premiums to get it?

Fri, 04/08/2011 - 09:10 | 1149460 Bicycle Repairman
Bicycle Repairman's picture

"I'll just sit on my ever more worthless pile of cash for the moment, 40/oz is too rich for my blood"

Another howler.  Do you write your own stuff?

Fri, 04/08/2011 - 10:17 | 1149688 Scoobywan
Scoobywan's picture

Last I checked, I wrote that.

I'm not sure what part of my statement offends you. When you watch something triple in price over a couple of years, I get skeptical of it continuing.

I read all the time on here about the AAPL and NFLX stock doubling, tripling in equal time frames, but its all manipulation and HFT, but for silver its fundementals and global demand?

Pardon me for being anchored to reality. Like i said earlier I would love to be buying now, I am sure silver is going higher, but at 40/oz the risk/reward is too high for me, and as the price goes up the amount of people that see it my way is going to increase.

I hate to be the bearer of truth, but people with mortgages, car insurance payments, kids and bills outnumbers die-hard gold/silver bugs 1000 to 1.

I can also guarantee that every gold/silver bug isn't a farmer or blacksmith, doesn't generate his own power or lives in the woods surrounded by natural resources.

I am jealous of those people, I truly am, but that isn't the hand I or alot of people were dealt. The rest of us have the play the game and get our nuts while we can.

And selling out and taking profits is part of that. I don't think I'm going to miss out on much upside, and I did save a few ounces for the true SHTF moment, but when that time comes, we will all have bigger problems to deal with than dogging a guy who "cashed out at 37".


Fri, 04/08/2011 - 12:38 | 1150354 LudwigVon
LudwigVon's picture

 at 40/oz the risk/reward is too high for me

This assumes you know the risks and the rewards.

You also studied the risks and rewards of being invested in FRN's ?

You became less diversified, good job ! Diversification is well known way to decrease return.

Why put capital into your second best investment idea(silver)?

Proud that you got committed to a trade and put all your eggs in the FRN basket (and will watch the basket closely).

Fri, 04/08/2011 - 08:25 | 1149319 Mr. Mandelbrot
Mr. Mandelbrot's picture

The "cash for gold" business is disgusting in its shameless predation on people's ignorance about the value of their precious metals.  Traditional pawn shop payouts of 50-60% of melt value are lucrative enough, but many of these national "cash for gold" companies are paying out 25% of the melt value or even less.  Wouldn't it be the same thing if there were a "cash for euros" industry preying upon people's ignorance about exchange rates?  Dear John Ignoramus Doe, here's a $35.00 check for the 100 Euro note you mailed us.  Thank you for using Cash for Euros . . .  

Fri, 04/08/2011 - 09:24 | 1149515 Pladizow
Pladizow's picture

A fool and their money are soon parted.

Fri, 04/08/2011 - 10:04 | 1149639 RockyRacoon
RockyRacoon's picture

Hey, not to praise those scumbags, but they ARE doing the dirty work for us by supplying the market with low-cost silver/gold.   You and I benefit from their thievery when we buy a newly coined bullion item.

Fri, 04/08/2011 - 10:56 | 1149847 Vendetta
Vendetta's picture

the gold coins sold by moneyline on beck's show were selling 15 mg of gold (spot price value at the time: 55 cents) for around $10. Another "bigger" coin with ~32 mg of gold were selling for around $30 (gold spot price value of 32 mg at the time: $1.27). When gold breaks $20k/oz, the people that bought the stuff will break even. I'm not even sure those people figured out that they've been robbed .... yet. I guess that's the penalty for watching beck

Fri, 04/08/2011 - 11:18 | 1149977 DosZap
DosZap's picture

It's called due diligence.

No fool go to a Auto Dealer and pays sticker for a run of the mill model.

Or a Refrigerator, or any other  item that's high ticket.

If you are buying collectable coins in THIS mkt, you had best be an expert.

And if you are not, then your going to get far less gold for your frns.

Fri, 04/08/2011 - 11:41 | 1150082 RockyRacoon
RockyRacoon's picture

As a coin dealer I get blamed for peoples' shitty "investments" over time.  I didn't sell it to 'em but I get the crap for not giving them back their hefty premiums.    Eff 'em.

Fri, 04/08/2011 - 08:26 | 1149326 Tense INDIAN
Tense INDIAN's picture

Dollar breaks trend line support ..........

Fri, 04/08/2011 - 08:29 | 1149336 Mr. Mandelbrot
Mr. Mandelbrot's picture

Here's a link to the hilarious letter that Cash4Gold sent the prankster who kept mailing in "gold painted rocks" . . .

Fri, 04/08/2011 - 09:00 | 1149419 Sabibaby
Sabibaby's picture

I'll be sending in gold wrapped chocolates. Sending painted rocks is just rude!

Fri, 04/08/2011 - 08:32 | 1149347 sudzee
sudzee's picture

US debt downgrades coming. The FED is out in full force over the last month trying to play up "all is well" before the crunch. Gold up as CB's try desperatly to replace paper gold with physical with "free fiat". This could quickly get ugly for them.

Fri, 04/08/2011 - 08:41 | 1149360 mogul rider
mogul rider's picture

To the newbies who believe silver will go to 50. Remember 2008. Just when you have the silver market figured out the banksters and pumpers ruin your fucking day.

Healthy skepticism is called for. Don't be afraid to take profits if you're unsure. It ALWAYS corrects.

The blogosphere is now full of brain surgeons who prophetized 40 buck silver while they ran for the exits at 28 and silver went to 7. The pump and dumpers are here now. 


Be careful. You sell the rise not buy the rise

Disclosure - I have trailerfuls and have a 100 year view so I'll never sell and can afford to hold. Many of you can't so be forewarned. These markets kill the stupids. Don't be one

Fri, 04/08/2011 - 09:10 | 1149443 bingaling
bingaling's picture

The only way they can do it is by deflation which would recreate 2008 or worse. Call me when Bernanke and crew get a clue according to them this is all transitory and that is why they will keep to the plan of printing . Dont sell buy and hold. On top of that ,there is rampant inflation worldwide the buyers aren't going to go away they will just buy more when there is a price drop.

Fri, 04/08/2011 - 09:14 | 1149470 SonnySkyy
SonnySkyy's picture

I'm definitely a PMs newbie, but I got into this with a 100 year view myself.  My wife and I decided to start buying Ag in January, 2009 as a SHTF fund, with the hope that we'd live long and happy lives and add it to our retirement if things don't go to hell they way we're expecting.

The one thing we have been considering is trading in for gold at some point, if the ratio falls below, say 30.  We're holding about 250oz of physical silver right now.  Would that be advisable?  We're not looking to make huge profits... just trying to secure some piece of mind for our family in the event of a worst-case-scenario. 


Fri, 04/08/2011 - 09:34 | 1149540 PlanForTheWorst...
PlanForTheWorstHopeForTheBest's picture

Would hold silver and buy fresh gold.  Don't trade for gold.  Ratio has gone from 60:1 to 37:1 in 7 months.  Gold for the most part has been dormant.  It should pick up and the ratio level off.  I would wait until 15:1 to trade, if at all.  Just buy more gold and hold silver.  Question: why buy gold?

Fri, 04/08/2011 - 09:48 | 1149587 mick_richfield
mick_richfield's picture

The traditional Ag/Au ratio, when there was a bi-metallic standard, was 15.  Ag has been much more viciously suppressed than Au -- because it was easier -- and has been irretrievable consumed by industry -- because of its dual nature as an industrial commodity and a monetary metal.  ( Sort of like Tony Stark and Iron Man... )

I believe that Ag will significantly overshoot the historical ratio before fear begins to overcome greed.  I expect that will happen somewhere between 10 and 5.   I don't think that Ag/Au can get below 5 even if Ag is literally more rare than Au.  If it reached somewhere in that vicinity, I would think it would be reasonable to sell Ag for Au.

At that point Au will be worth a lot more FRNs than it is now.  If anybody cares.

Of course, at a ratio like 10 or 5, everybody and his brother will be trying to start a silver mine, and eventually that ratio will correct back down to 15 or so.  But that will take time -- first because it takes time to ramp up mining production, and second because by that time Ag will be running on inertia and emotion. 

It might take a decade or a generation for Ag to correct back down to 15 after a serious overshoot.


Oh, and ... Fed delenda est.


Fri, 04/08/2011 - 11:34 | 1150032 DosZap
DosZap's picture

Ag is more plentiful than Au.

Where do you think the original ratios came from?.Silver ratio in the earths crust compared to gold.

Where Slvr is getting its due, is the fact its short supply now because of demand, and its used in Industrially and as a preservation of wealth also.Plus it's value has been driven down artificially for years, esp since the old style photography methods are gone.

Silver is running hot now because of Global purchases and it is a side line (by product of mining).

Very few PURELY dedicated Silver mines exist.

The supply is down  for lack of metal, it's down because the cost of mining JUST for Silver was never cost effective.

Perhaps until now if it holds.

Fri, 04/08/2011 - 09:18 | 1149498 Bicycle Repairman
Bicycle Repairman's picture

Newbies, just buy as soon as you can and hold.  Any corrections will soon be "corrected".  Don't trade.  It is the only way you'll lose.

Fri, 04/08/2011 - 09:49 | 1149573 JimBobOMG
JimBobOMG's picture

Well history shows it is more likely for PM to hit infinity than 0. It's a store of value and doesn't matter what it costs in terms of paper. BTFD!

Fri, 04/08/2011 - 09:09 | 1149445 antidisestablis...
antidisestablishmentarianismishness's picture

"Whether silver will plunge or not at some stage is irrelevant if one is buying for diversification, safe haven and store of value reasons."


And whether the dot-coms plunge or not at some stage is irrelevant when you realize that the internet will change history. After all, this is not an investment, it's a religion.

Fri, 04/08/2011 - 09:19 | 1149505 Bicycle Repairman
Bicycle Repairman's picture

You've compared silver to the dot-coms?


Fri, 04/08/2011 - 10:20 | 1149691 antidisestablis...
antidisestablishmentarianismishness's picture

How a plunge can be irrelevant if you're buying for store of value is beyond me, but it's a brilliant concept if your ultimate plan is to get the believers to ride your religion all the way to its eventual graveyard.

Fri, 04/08/2011 - 14:54 | 1150873 Urban Redneck
Urban Redneck's picture

Do you file a claim with your home owner's or auto insurance provider for something that will cost slightly more than your deductible to repair/replace?  Or do you file the claim when TSHTF?  The silver cost can be analgous toa prepaid insurance premium for an infinite term policy.  It all depends on the perspective of the buyer.

Fri, 04/08/2011 - 09:12 | 1149469 Stuck on Zero
Stuck on Zero's picture

Look for TPTB to resolve the budget crisis (by increasing spending) and then aanounce a happy, happy resolution followed by JP and GS dropping ten billion in naked gold and silver shorts on the market.  Get ready to buy physical!!

Fri, 04/08/2011 - 09:15 | 1149484 ivars
ivars's picture

Be careful, there is coming a spike with very soon correction ( at level 42-45 USD, may be 50 USD) 40% to 25 USD. Why? FED will bail out JPM shorts, and the effect will be the same as was when JPM ( FED) bailed out Bear Stearns silver shorts.The panic level is increasing.



However, that event will totally expose FED role, and after that, in 2012 it will become clear that there may be return to Gold standard, so silver will rapidly return to 80-100 USD.



Fri, 04/08/2011 - 09:23 | 1149513 Bicycle Repairman
Bicycle Repairman's picture

Are you absolutely sure JPM is still short at this point?  I wonder what JPM wants to be holding when the $ endgame hits?

Fri, 04/08/2011 - 09:43 | 1149566 ivars
ivars's picture

I hope so. But there can be more prosaic reason for correction. I can only try to predict how the price will look from aggegate patterns,  not why.

Fri, 04/08/2011 - 10:08 | 1149652 RockyRacoon
RockyRacoon's picture

Kinda don't matter much.

Here's a piece from Ed Steer's column that's worth a read:

Reuters piece posted over at It's covers the same report, but from a slightly different angle...and it's a much shorter read as well. The picture alone is worth the trip...and the link is here.

Fri, 04/08/2011 - 09:23 | 1149520 mick_richfield
mick_richfield's picture

Correcting some typos in the article above.

Mr Klapwit of BTFD warned that the silver market could suffer a steep correction if investors were to suddenly decide to sell all their holdings and kill themselves. 
"When I see prices moving up so fast," he said, "I have to advise my clients to sell at least some of their silver.  To me.  Hey, you gonna finish that sandwich?"

Fri, 04/08/2011 - 09:29 | 1149528 PlanForTheWorst...
PlanForTheWorstHopeForTheBest's picture

I have heard that there may be an emotionally based, short term pull back from $40 to the $37 range.  This from a broker I deal with who deals in big money.  Either way, just means silver discount.  If you belive it's going to $50 this year does it really matter if you bought at $37 or $40.  I would rather have more ounces than try and be cute predicting dips...


Fri, 04/08/2011 - 09:36 | 1149546 kito
kito's picture

well, we still havent seen the metal with some mettle. its easy to praise silver and golds rise, but its been rising with the stock market. it hasnt been tested for its true worth as a currency until we see the stock market plunge, and the pms increase its upward trajectory. japans tragedy saw the pms plunge with everything else. the housing bubble saw a massive drop in pms as well. how do we know it can stand on its own?

Fri, 04/08/2011 - 10:19 | 1149675 RockyRacoon
RockyRacoon's picture

Lots o' folks playing stocks on margin -- it's HUGE.  So, you will see a big PM sell-off to cover that scenario.

Not to worry, it will bounce back just as it did in '08. 

This comment is very general and relays a concept only, not buy/sell advice!  I don't give that.

Fri, 04/08/2011 - 09:40 | 1149555 r101958
r101958's picture

Silver and gold will continue going up as long as the fed keeps printing and the gov't keeps spending more than they take in. That is all there is too it. Nothing else. TPTB want to make it seem like a bubble but it is not. If it was then everybody would have it. Check what Mark Faber says in his interview here:

Fri, 04/08/2011 - 09:41 | 1149559 ivars
ivars's picture

I think oil will start to go down soon, with money moving into PM. That means, peak for correction in silver and Gold will coincide with next LOW in oil. Which is early MAY, 2011.

So , one more month for silver rally.

Here are oil price prediction for 2011-2012, has predicted 2 peaks correctly already:

See the dip in MAY? And here is corresponding ( independently derived) peak in Silver ( it has to be in early MAY 2011, the March 13th graph shows maximum little too early. The value at peak can be close to 45 USD, may be 48 USD):


Then, FED will bailout JPM shors, and silver will drop by 40% afterwards, as it happened in 2008 when FED bailed out Bear Sterns via JPM.








Fri, 04/08/2011 - 09:59 | 1149618 r101958
r101958's picture

Oil will go down when we see demand destruction again or when the dollar has a spike. All resources are finite and will get more scarce in this economy which survives and thrives on exponential growth. So, the alternatives are: Fewer and more expensive resources as in the current economic paradigm OR the current paradigm collapses and demand is destroyed in the process. Nuff said.

Fri, 04/08/2011 - 10:02 | 1149638 ivars
ivars's picture

I meant oil will go down to 105USD  Brent temporarily, it will all the time creep up next 2 ears, but it happens with small peaks and throughs.  In July, welcome to Brent > 140 USD.

Fri, 04/08/2011 - 09:51 | 1149591 earlthepearl
earlthepearl's picture

Actually just bought a bunch of April 16 puts, i think in the very near term this is going to get hammered down

Fri, 04/08/2011 - 09:57 | 1149609 obelisks
obelisks's picture

Max Keisser's silver Liberation Army

 will send it to $47 at least to end The JP Morgue

Sat, 04/09/2011 - 15:28 | 1153671 thames222
thames222's picture

Taking bets on over $55 before the year's end? jk, but i think so

Fri, 04/08/2011 - 10:24 | 1149715 Blanc swan
Blanc swan's picture

Back in 2001 or whereabouts, the biggest gold anal-cyst of one of the biggest finance firms, don't remember if it was JPM or GS or maybe some other, predicted that in 10 years he saw gold at $100. I've tried to find that quote again but can't.

Fri, 04/08/2011 - 11:41 | 1150081 DosZap
DosZap's picture

Never happen G.I..................

Whatever he was smoking, I do not want it.

In 10 yrs, if this world still exists it won't be worth picking up off the street.

Basics will be King.

Fri, 04/08/2011 - 15:14 | 1150303 cpaspareil
cpaspareil's picture

I work in a media in Canada and as far as i know, it's not a conspiracy (except if you consider "conspiracy" having the boss choosing people who fit in the minding he wants to put on air)

What i'm pretty sure of is that most people on air are either very intellectualy lazy or plain stupid. They're very good "parrot" but don't ask them to read a book or something longer then a "lead"...

And if you challenge them (which i stop doing), they have no arguments, just simple and stupid "mantra" they don't even undestand...

Politican want "votes"

Media people want "listeners".

Listeners and voters are the same people... Look at who get elected and what are the most watched-listened shows.

TPTB don't need a conspiracy- we're stupid enough as a collectivity. 

People prefer to read "People magazine" then ZH... That give us a good headstart!





Fri, 04/08/2011 - 21:45 | 1152413 tomster0126
tomster0126's picture

all the way up to $150 long term?  I'm not even worried about buying right now then, I'll wait a few months until after May.  such a trip-out that the mainstream media is not paying any attention to the Ag/Au news though.

Wed, 04/27/2011 - 17:54 | 1213828 Geoff-UK
Geoff-UK's picture

Stop reposting a conglomeration of other stories from other sites!


We already have the Drudge Report!

Do NOT follow this link or you will be banned from the site!