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What Does the Largest Move Higher in Silver in Years Mean?
Today, as I write this short article, silver has moved from
$45 and some change from the close of the New York market last Thursday to $49.35
a troy ounce in Asia, a move of 9.06%. If the price of silver remains anywhere
near this level for the next four hours until the COMEX opens, this will mark
one of the largest, if not the largest, move higher in silver in years from
market-close in New York to the next market-open (remember the COMEX was closed last Friday in observance of Good Friday). So what does this enormous move mean, undoubtedly fueled by official comments from the China
Central Bank that it desires to offload some $2 trillion of US dollar
denominated reserves?
Well for one, it proves that all the recent talk of silver
bubbles is not only uneducated but also silly. If analysts can’t figure out
that soaring silver prices are directly related to a loss of confidence in the
US dollar and other major fiat currencies, a rejection of the global Ponzi banking system, and silver's return again to its well deserved status as a
monetary metal after years of being just an industrial metal, then they should
cease performing any further analysis. Silver is not just soaring against the dollar but it is also soaring against the Euro and many other global fiat currencies. Silver's recent big move also means that the recent articles
comparing silver (and gold) investors’ fondness for precious metals to a
misguided, religious-type fervor is also way-off base, and that analysts must
be using the term religious-type fervor as a euphemism for logic, intelligence
and reason. While exciting, this huge market-close to market-open move in New
York in the silver price also does not mean that silver will shoot higher to
$60 and then to $100 in a few weeks either (unless the shorts at JPM get run
over by this move and have to start furiously covering and the COMEX defaults -
then anything can happen). Nothing goes up in a straight line just as nothing
drops in a straight line. Silver will experience significant drops during
future consolidation periods as the silver bull progresses as well.
While it is true that some speculators and short-covering are helping to drive
the price of silver higher during this run, one never hears the other end of
this argument – that speculators are merely enabling the price of silver to
reach a price more reflective of the free-market fundamentals of supply and
demand after having been suppressed for decades by the likes of JP Morgan and
other puppet bullion banks that execute the wishes of the US Federal
Reserve. Furthermore, very few
people also discuss the safe assumption that China would not be releasing these
official statements about dumping US dollar reserves, knowing that such a
statement would drive gold and silver prices higher, if they had not already
purchased a large amount of physical gold and physical silver for their
reserves in recent months. No one releases information that drives the prices
of assets higher that they plan to purchase, just as no one (except Gordon
Brown) announces information that drives the prices of assets down that they
plan to sell. Thus, one can assume that China must have just concluded buying
physical gold and physical silver, and lots of it, even if they have not
announced this to the rest of the world. There is bound to be large sovereign
buying backing this large move in silver that is fundamental and long-term.
Such actions will counter and help smooth out the additional spike in silver
prices that can be attributed solely to speculators and short-covering.
While it is true that silver will pull back and consolidate
after an enormous run higher (a mind-boggling 162% since the end of last August!)
at some point probably in the not-so-distant future, and while it is true that
silver will likely experience some very volatile dips to the downside as well
this year, the next significant dip in the price of silver will not mean that
the silver bubble is bursting as the disinformation bots in the media will
assuredly report when it happens. In fact, I expect the silver bears to proclaim this recent huge move as a "blow-off" top
that marks the inevitable bursting of the silver bubble. I would be disappointed if they didn't. My take? I will use any significant dips in silver price in the future to convert more of my savings into physical silver. Let’s
wait until silver reaches the mid-triple digit range before we realistically start talking
about a silver bubble.
About the author: JS Kim is the Founder & Managing
Director of SmartKnowledgeU, a fiercely independent investment research and
consulting firm whose philosophy is the anti-thesis of Wall Street fraudsters.
The SmartKnowledgeU Crisis Investment Opportunities newsletter has cumulatively
returned 200.96% from its inception on June 15, 2007 to March 31, 2011 in a tax-deferred account, beating
the S&P 500 index by 213.90% over the same investment period.
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That it will crash this week. Follow the prices, stocks, and FED comments, and You will see by the end of the week that it was true. Every one is starting to price in some tightening.
+ 49.87 the intermediate top.
These fools don't look at prices, stocks, and FED comments they are too busy cleaning their guns and storing their fucking ammo.
I agree tightening is on it's way. The FED has no choice but to withdraw liquidity.
Well as the old saying goes you can't fix stupid, well you can and they have the solution right in their trigger fingers.
Did anyone ever tell you that you're funny when you're an idiot?
What Does the Largest Move Higher in Silver in Years Mean?
I think it might mean the beach ball isn't being held underwater anymore. We may be establishing a new equilibrium price for silver. When Blythe moves back to U.K. that'll be the signal.
The break out after 6 months of consolidation in gold is $1975. Silver, which is a stretched out chart and difficult to measure says at least $65, but I think a 30 to 1 ratio of silver to gold is not out of line which puts silver at $75. So drink up Shriners, Cheers!
I don't know but having both metals is probably the best "hedge" one could have...
You should see the hedge in my garden. It's all green and trimmed nicely. I also have PM's, so best of both worlds.
Rob good idea. I got burnt bad in 2008 and went 50/50 all physical except for spending money for a few years. I got it all back plus more. Half gold will at the least keep your buying power and allow you to sleep at night, and half in silver in case it takes a moon shot and you won't lose sleep missing out in perhaps the best investment in decades. So don't look at either metal as a hedge against each other unless you were considering going all in silver.
So, I'm guessing that based on performance, you are much more weighted to Ag now? or do you trade some out for gold to try to maintain a balance?
A bit OT but has anyone noticed the Gold/XAU Ratio on Kitco's home page?
to infinity and beyond! (buzz lightyear)
Why the stock markets arent plunging? This is so boring...
What do you mean? They are plunging when priced in real money - gold and silver.
They are not and will not "plunge" when priced in fairy dust. Governments will print as much as they need to support asset prices lest people feel poorer when they read the papers.
It's Hopium they are injecting but all addicts eventually either die or go through withdrawals.
But they are...
Or are you still measuring in US Dollars?
Please make some original posts. I'll buy that dip.
go have a dip in the deep blue sea where the fish sparkle like silver thanks to Strontium 90!
Please, make a dip happen so that I can buy more.
I bought Sunday prior to the open. Got a great deal thanks to the fact that APMEX only tracks domestic markets.
TM,
As did I.
I am going to keep the rest of my powder dry(unless there is a nice dip,pull back).
Casey say's in his scenarios here expect some really nice dips in the mid summer months.(Head feint).
My therory on dips is:
--> Take a look at your market
--> If you wouldn't sell, why aren't you buying?
Also, BTFD!
With silver going above $49 overnight, I'll guess that the smug guy with the $46.70 short position had a sleepless night.