Summer Decline in Gold & Silver Coming?

I subscribe to a gold silver newsletter that's predicting a significant summer decline in PMs

It's saying the decline could take gold $100 lower, silver $10 lower

The silver prediction would take the white metal down to roughly $27

I could see that happening

That would set up PMs very well for a big Fall 2011 rally
Sep-Nov is almost always great for PMs

For those with a brokerage acct that believe the decline is coming ... a good way to play this is with ticker symbol "ZSL" ... the proshares ultrashort silver fund (which rises as silver drops)

So a possible strategy might be to short PMs into August ... then go long PMs in late August and ride into Nov/Dec.

 

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I am new to the hobby and have wanted to get some silver. It is tough to take a chance on it with the market so volitile. I am not sure it will hit 50.00 again but i think it might hover around the 30.00 mark for the summer

 

There are a couple of things you need to know about getting into silver. First, it will ALWAYS be volitile. So you have to be comfortable with extreme price swings to be happy owning it. Second, it doesn't make any sense to form opinions about what you think the price will do during the summer, but you need a firm conviction based on analysis that the price will go higher. This will enable you to hold on through the dips [like now]. In fact, if you think silver will hang around $30 for a couple of months and it does, you may fool yourself into thinking you can predict short term movements, which could lead to grevious mistakes. So I try not to think about what silver prices will do for the rest of this year, but if I didn't think silver would exceed $50 within 3 or 4 years, I wouldn't own it.

If you want to pick up some cheap silver, try searching rolls of half dollars from the bank. There isn't much silver around anymore but if you search enough rolls, you may find some.

 

coinmandan, yes, it's been a crazy ride for sure!
consider starting a position in silver if bullion drops close to $27 this summer.

 

Which newsletter made the prediction?

 

http://sunshineprofits.com/

He uses mostly technical analysis (chart reading) techniques. He does a decent job, but like most predictors only hits with about 65 to 70% accuracy. Still it's nice to have another opinion. I ended up buying about $22,000 worth of ZSL to hedge my physical bullion position.

 

$27 sounds possible(but not that fun), and for me it's just a time to buy more, and hope fall's better. I opened a brokerage account recently, so I might try ZSL.

 

I am not sure about ZSL as I have not read the prospectus, but I assume it is the same tax consequence as SLV. I always dealt with SLV in my IRA and ROTH accounts rather than a taxable account, due to the high tax rate.

Jim

 

Thanks. I think I've seen some of this guy's analysis on gold-eagle.com but I don't know anything about him.

 

his warnings prompted me to sell all my paper silver positions (SLV and AGQ) in my retirement accounts at $49 an ounce
that saved me at least $20,000

he's not 100% accurate tho (who is)

 

Same here.

 

In light of new information I am bearish on silver in the short run and only relative to USD. Reason being is that shortly after the end of QE2 the CFTC is going to change margin requirements for the $600 trillion derivatives market to require real assets as collateral, and guess which are the only 2 that have no haircut? USD and US Treasuries. So that is where the deep pockets will be dumping their money to get the collateral for these margin requirements, and the Fed can say "we're not doing QE".

http://www.zerohedge.com/article/re...tives-moving-central-clearing-multi-trillion-

Gold is at an all time high in British Pounds though, so I won't be jumping ship even if there is a sizeable dip relative to US dollars which appears to have already begun due to Euro weakness (thanks to Juncker's foaming at the mouth and Germany's stance of enforcing the laws that govern them regarding giving money away) as well as market anticipation of no QE3. Maybe the day traders will want to get out now and get back in at the sub $30/oz level, but us stackers will just keep stacking.

This is of course subject to change the next time the rules do, but so far with silver and oil margins increasing and bond margins decreasing the rules seem to be favoring fiat. I am anticipating at some point however that Ted Butler's 3 decades of persistence will pay off with the short squeeze in silver finally being ousted which will likely trump all of this.

 

This is a 6% decline. I don't think it warrants the description "significant". In the scheme of things with gold, this is nothing. It's a buying opportunity.

I do agree however that gold most likely won't do much during the summer. After Labor Day however, watch out. People will wake up from their summer swoon and realize the economy is really tanking, Obama is a failure, the GOP is rehashing it's form of voodoo economics, and the constant "hopium" being doled out by the media is nothing but BS. If gold follows its 10 year trend, it will rise $200 -$300 from then until December. This assumes no unpredictable SHTF events. These days and times, there is no telling.


Silver? This is a speculator's metal. Easy to get burnt and something I say stay away from.

 

I'm not sure the CFTC has the ability to do this since all but a small fraction of the derivatives are private contracts and do not trade on the exchange.

 

It looks like you've been proven right once again Cloud =) I am back on the silver bull!

http://www.zerohedge.com/article/cf...n-another-6-months-comply-wall-street-demands

 

Looking at the past few years, it does seems gold and silver take a break in the summer, which occurs after a correction. It seemed to me it started a little early this year but heck, so did the heat and everything else : ).

At any rate, I agree with Cloudsweeper99's analysis...and that's to look long-term fundamentals. There's always going to be price swings and silver is certainly the more volatile of the two. Judging from current events in Greece and 'euro' zone, we may see gold/silver priced in dollars stagnate for awhile. But considering the fundamentals, it's just a matter of time - perhaps this fall - we'll see another strong run for awhile.

All of this of course equates to a good buying opportunity, especially if silver goes to $27 as eric0911 says. And of course as Inflexion says, changes in how quantitative easing works may add volatility as well for a short time.

http://www.blog.providentmetals.com...th-the-u-s-economy-and-goldsilver-bullion.htm

http://www.kitco.com/charts/popup/au0365nyb.html

 

yes, it's so hard to predict the swings!! Silver has really been hanging tough in here around $35 ... not going up ... but not dropping much either. QE2 officially ends in a few weeks, it will be interesting to see if that has any effect on anything.

To be honest with you, I think it would be nice if silver just hung around in here around $35 all summer before taking off again this Fall. I have SO MUCH silver that really hate seeing significant declines (even though it doesnt really matter, I am a long term investor, as long as silver is higher in 10 years, I'll be happy). All this movement up and down for me is just paper profits and losses you dont really make or lose anything until you sell.

 

With a possible debt default by the U.S government in early August I can't see PM prices dropping anytime in the near future.If the debt default leads to a major sell off of the U.S. dollar,I expect the price of silver and gold skyrocket.
I suggest to take note of what the rest of the world is saying and not listen to Wall Street as they are part of the problem and not the solution.
I had a different opion 6 months ago but it's now clear to me that nothing in regards to U.S. debt has changed or will change.

 

The souverign Press

 

whats your point?