Precious metals investors are clearly on the sidelines as prices have suffered severe declines in the past few months. Now, though, that are indicators that prices have bottomed. Analysis of the COT Report suggest that the Large Commercials (LCs) are not position for lower prices, which may indicate that a bottom is being put in.
Let me start by saying that I am not a technical analyst. Consider the following to be for learning or entertainment purposes only. If you take a look at the silver chart from last October there appears to be a classic reverse head and shoulders pattern forming with a neckline in the $36-37 area. This is considered to be a very bullish formation.
I highly encourage you to read the latest interview with Hugo Salinas Price. Mr Price is a retired billionaire who made his fortune via a chain of appliance stores in Mexico. He is also a tireless advocate of sound money. His plan to reintroduce silver as a competing currency in Mexico would make it the most sought after money in the world bar none. It is well worth your time to understand the details of how he proposes to do this.
Despite recents price declines, gold and silver remain in long-term bull markets. The primary driver of prices is the expansive monetary policy of the US since President Nixon closed the gold window in 1971. Having absolutely no links to gold enabled the Fed to create trillions of dollars in the wake of the panic of 2008. Massive monetary inflation is followed by massive price inflation.
A paradigm shift in silver could result in explosive price moves to the upside. Steve St. Angelo predicts such a paradigm shift.
Many precious metals investors are perplexed in the metals inability to move higher with all the negative financial news. Athens is aflame (literally) as the euro crisis remains unsolved; the GOP seems to be foundering in deciding on which candidate will face Obama next year;and the US continues to borrow forty cents of every dollar it spends, with real solution in sight. So, why are gold and silver not surging? In my view, it’s period of consolidation, and I think that Gene Arensberg’s latest Got Gold Report back me up.
Many gold and silver investors sell locally because of the inconvenience of having to package their metals for shipment. In do so, they often leave a lot of money on the table because CMI Gold & Silver Inc. has the strongest bids in the country for gold and silver bullion products. CMIGS has prepared a video slide show on How to Ship Silver. It provides details as to packaging silver (and gold) for shipment.
Silver is in the news more than anytime since the it spiked to $50 in 1980. Marc Davis says it’s because silver is a currency in a crisis. Not that silver is a crisis but that it becomes a currency in a crisis.
Further, China, which used to be a major source of silver, is now a huge importer as Chinese citizens have become big buyers.
The big news among close watchers of silver was the COT report that large bullion banks increased their silver shorts on the COMEX by 3,000 contracts. Ted Butler, known for his analysis of the silver market and COT positions, was “so shocked” that at first he thought there was a mistake. Butler noted that the
Silver continues to shock the analysts who thought that after the metal’s run to plus $30 a severe correction was in order. Instead, it appears that maybe silver’s move to the downside was only a consolidation. Still, only time will tell, but nothing’s improving on the world’s financial scene and reports of shortages of physical silver abound. So, will silver push to the $40 level, as Gene Arensberg says is a possibility?