How Low Will Silver Go?

They are not pundits, they are salesmen.

 

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I forget who bought coinflation, but I didn't think it was really something that would be helpful for what should be a neutral information sharing website.

It is what it is.

 

Yeah, I have always had the bad habit of jumping into a falling market too early. I usually have an overall correct viewpoint, but am terrible at timing transactions. Even in 2009 I jumped in about 3 weeks too early.

 

You are right that the guys preaching "buy at any price" are giving bad advice and their motives are suspect. I do think, tho, that the first two headlines you just gave may be on target. For example, the dollar is now correcting (due to poor economic data, which I have pointed out before and which the stock market bulls seem to overlook due to the current trend), causing the silver price to move up a buck, and we may reach my target of 25-26 very soon (tho, again, I know the majority here disagree with me) just from that correction alone. Gains or losses are not linear, and we can see bounces whatever the longer-term trend. So we may see a short squeeze this summer.

I also thought about the physical vs. paper market distinction, which I know many here find to be false, and I came to the conclusion that paper prices can deviate from fundamental factors such as supply vs. demand due to psychological factors in the market and technical trading. A chart can at times take on a life of its own apart from fundamental factors. For this reason I believe that a paper vs. physical market distinction is valid at least in the case of commodities.

 

I agree sir. I use it as a great site to check silver and gold coin prices, as well as to be able to read what silver pundits are thinking. I listen to BBC, NPR, and read the WSJ and NY Times. I believe in listening to all sources of information and make up my own mind.

 

Well every commodity has basis risk. This is well known. This is how much locally the price of a commodity can vary from the market. For many commodities its assumed the market is just a part of the price, with the basis, (difference), for physical varying. I do not see PM much differently. In all commodity markets basis increases in a downward move. from my point of view this has now corrected.

Inasmuch as that is the distinction you talk about, I agree completely. I deal with many commodity markets, and all have those distinctions. However, some try to say PM is "special" and the difference between market and physical is not basis, but some kind of overt manipulation. That is where I disagree personally. If difference between physical and market means manipulation, then EVERY SINGLE COMMODITY is being "manipulated" by "the man".

 

I think there is a tendency to oversimplify and blame manipulators when the silver price falls, partly because it assuages the ego in such times. However, and again this is my view, I see all markets as manipulated by large banking institutions, to some degree, in a way that is probably technically illegal. I also think, because gold and silver are anticorrelated with the dollar, there is likely an interest is suppressing their price to boost the dollar when it is felt the value of the dollar is too low or needs support (let me also add that there may be times when the dollar is deliberately devalued, as when QE or the talk of it takes place). A rise in the price of gold in particular tends to bring a lot of bad publicity to the Fed, which can (in theory) easily print money to naked short gold to divert attention away from itself. This is what I suspect happens, though I have no proof of it. At the very minimum, by propping up the dollar when it needs to be propped up (or by devaluing it), one can say gold and silver are indirectly manipulated due to being dollar anticorrelated assets.

 

Really... Consider the first one. These folks who are screaming shorting is so dangerous here are the same folks who were preaching what a fantastic buy silver was at $45. Do you think that shorting now is more "dangerous" than going long was at $45??? People short all the time for various reasons, some do it just to hedge. Some keep their short position for years and some for only a few hours. Some make money, some lose. For someone just to put a blanket statement out like that is ridiculous and should not be taken seriously.

The second one is a total joke. The demand for Silver has been relatively stagment for 10 years now. There is no "huge" demand for silver. I guess they were talking about the little blip for "silver trinkets" that existed for a very short time after the price correction. Well, that is over and there was never huge demand for investment grade silver. You could have gotten all you want for spot if you had the means. As far as "artificial supression" goes, there is none, plain and simple.

 

You are making too many claims here to deal with them one by one in great detail. Let's start with the first one. The headline comes from MarketWatch. Show me the link to the authors advising people to buy silver at or near its peak. Maybe they did, maybe they didn't. I suspect you are making a blanket statement. Also, no one here from what I can tell opposes shorting. In fact I have shorted silver recently.

I agree there may be an excess of silver at the moment, but I believe gold may be tighter. In the case of silver, the market overshoots to such a degree that it's difficult to say with certainty, with all of the factors in the market, what a fair value is. Silver is very technically driven.

As for the idea of an artificial market, I believe that's what we have when the stock market continually goes up despite bad economic numbers. The stock market is up simply because of QE. It's unlikely the tapering will take place soon, given the data coming out.

 

Well I get it, you are just yanking our chain

In post 124 YOU said the first two headlines may be on target, so the only conclusion that can be reached is YOU believe that silver shorts are playing a dangerous game and YOU believe that silver is in huge demand...... and now in this post you say no one here is opposed to shorting and you think there may be an excess of silver now........??????

Have a nice day

 

You are now very emotional. Calm down. Maybe you are nervous about your stocks, which is what I suspect. And yes, I have shorted silver, I am long the dollar, and I own physical silver. The world can be complex.

Update: The second headline refers to U.S. Mint sales. I don't see the big deal about that.

 

Stock markets rise well ahead of economic recoveries, and fall well before them as well. Look at your history, every economic recovery has been preceded by six months or more by a stock recovery. Yes, sometimes they get it wrong as well, but on the surface to say a stock market has to be up "simply because of QE" in the face of some lower numbers is not true sir. I have seen some horrendous numbers in the past coming out in the middle of a stock market rally, but the market was right and a recovery started shortly afterwards. Always remembered stocks are mainly valued on future cash flows, not net asset values today.

Btw, I am not saying I am terribly comfortable with stock levels today, and am not putting any into stocks right now save for 401k money, but I am also not so nervous that I am bailing out of the market.

 

Hey man, sounds like you have a good plan. If the stock market goes higher, that's great for you and others in the market. I believe the market is ahead of itself, but again, we are just chatting here and won't make a difference in the market, so it's no big deal to disagree. I think with the right stocks the market can be a great thing. I also think timing silver correctly can be a good thing, whether that means buying now or in some future dip. We do not have to hold on to absolute ideas.

 

Not disagreeing with you sir, just making a historical point so everyone understands. Stock markets never wait until a recovery is here, they are always forward looking and always rally well ahead of an economic recovery. Also, they can be wrong on this prediction as well. Just pointing out bad economic numbers today is not necessarily at odds with stocks going up.

I have A plan, no one, (even me), ever claims it a good one. Its just the best I can come up with right now. The only thing I know for sure is six months from now I will wish I had made a better one.

Btw, I sure hope some people who strongly believe now is a good time to buy silver will chime in here. Its a bullion board after all. I love hearing well reasoned contrary opinions to my own. Construct a good enough argument and you might convert me, as I am on the fence.

 

To be clear, on YouTube I follow a guy who was always dismissed as a silver bear, and now he's buying silver. He is baffled by the labels. So being a good investor means being flexible and not sticking to labels, and being either a bull or bear based on time horizon, pricing, and possibly other factors that may change an opinion. To be more clear regarding a point I disputed with Mike above, overall silver demand may be weak, while bullion sales such as Silver Eagles may be strong, thus having some market effect. But either way, the main driver right now is the value of the U.S. dollar, as I have repeatedly stressed. I honestly think silver can fall lower at this point, because I expect the dollar to strengthen later this year. This is because the dollar is the cleanest dirty shirt in the laundry room, to use an analogy. On the other hand, the global QE can easily spin out of control. And I really don't see a recovery, or a lasting one, on the horizon. But again, if I'm wrong I'll probably be here admitting it, and won't just disappear, like many who jumped on silver because it was "hot."

 

The nebulous "They" might be people like Warren Buffet (not necessarily meaning Buffet himself), who have the resources to move the market and know how to capitalize on uncertainty, especially when they are the ones creating it!

Go back and read the Buffet quote. Now just imagine someone like that who knows how to make a killing by buying in down markets during periods of fear and uncertainty and has the resources to actually create that fear and uncertainty. And the resources to reverse the market any time they want with a massive buy.

And "They" might not...

 

Here are some names for you...

http://www.smartknowledgeu.com/blog...els-gold-and-silver-price-slam-will-backfire/

 

Let's say I am dubious. Afterall PMs have been dropping since about last October haven't they?

 

At the beginning of the articles, he boldly says "FACTS" and then explaining this farther, he says "SPECULATION","the most reasonable speculation"."So whether Fact #1 caused Fact #2 or vice versa is irrelevant." The easiest answer would be to". "These are all indisputable facts, not speculation."Was it mere coincidence ...I will let you be the judge of the connection between these two events, as this is the first speculation" "I don’t know if it has since been confirmed that Merrill Lynch was the agent that executed this dirty takedown, but obviously an agent of the Federal Reserve was used to instigate panic selling in the paper gold markets", "Of course the CFTC will tell you that futures contracts were never intended for physical delivery but only as a hedging mechanism ",

and I could go on about facts changing to speculation or worse through out the rant. It wore out my "aluminum foil hat" ( not true of course, but should be obvious) before I was half way down the page. If one believes it .....their mind is epoxied against logic and reason.

 

I hear you Jim. The weird thing is that the same article has been written over and over and over, just change out the "bad guys" and republish every few years. Used to be the Trilateral Commission.

The funniest thing is how PM people thing they are so dang special. They think the rest of the world REALLY CARES about pm like they do. Look at ANY other commodity market and show me one without quick swings in pricing up or down occasionally. You can't. Heck, gold and silver are actually LESS volatile than many other markets I deal with. The only difference is you aren't going to be able to go onto internet chat boards and read how Warren Buffett, George Soros, or "the banksters" manipulated pork bellies or FCOJ. People who trade pork bellies or orange juice:

1. Are usually more experienced in these markets
2. Understand most people do not CARE about pork bellies or FCOJ futures.

Maybe its a function of the associated collector mentality to assume 99% of the people care at all about what you are passionate about. IDK any other answer.

Btw, I mention Soros. He and a few other billionaires I would agree are worth paying attention to. But "pay attention" to what they are saying, and usually do the opposite. Some of these guys are snakes in the grass, going on tv saying to buy when they are selling. Never trust a billionaire if he is involved in a market. They didn't get to be a billionaire by giving away their best information for free.