August Price Ideas?

I'm looking to buy about 200 ounces (AE's) in beginning of August.
I have a pretty decent check coming then.
Id love to buy now but just don't have the cash.
How long do you guy think the price will stay around low 20's?
I don't see it popping within the next two months or at least I hope it doesn't.

 

Log in or Sign up to hide this ad.

18-22 for many, many years

 

Now that would truly shock me given silvers volatility in recent years, anything is possible though!

 

It would shock me as well. For that to be true, silver would have to be near the high end of variable silver mining costs. I do not think the variable costs are that high, so if it were truly that steady I think the range would have to be lower. However, since its around $22 steadily right now, investor psychology has to be propping it up. Since that is the case, I am betting investor psychology will not be such low volatility. The 1990's were low volatility since everyone thought silver was a bad investment, and there were some large sovereign sales suppressing the market. I do not see any sovereign sales nor purchases on the horizon, and a corps of young bullion investors nowadays.

Make sense? IOW, since its mainly priced on psychology right now, I do not think this will lend to rock steady pricing. Short term, I am nervous about what these two large copper mine shutdowns will have on silver supplies. Its hard to lose two of the largest copper mines in the world and not have a measurable affect on silver supply. It will take months, but it could be a spark to at least a short term spike later this year.

Always remember, though, that if PM stays "steady" its in reality declining. Humans never get that through their head, really, the notion that if something is worth $22 a decade from now it has in reality lost a lot of value. By definition, the value of something like PM should go up each year with inflation over the course of years to "stay steady".

 

I will first say that price can do anything, and fundamentals don't mean a whole lot in these markets.

However, gold and silver are the most oversold they have been in this bull market. Last time that occurred silver rose from $10 to $49, and it's more oversold now than it was then.

Gold net short positions broke all time record levels late last month [1]. However in the 2 weeks since then a staggering 40% of the silver short positions have been unwound [2]. This is extremely bullish in that it showcases a rapid change in sentiment by the big players now positioning for an up move. I realize silver is not gold but they tend to move together.

Registered gold inventories (available for delivery) on the COMEX have reached record lows from 2003. Physical metal is changing hands at an unprecedented pace, and if it persists then supply will have to come from somewhere else. Granted the eligible gold inventories are not at record lows, but those aren't available for delivery either.

If I were to make a guess I do not think these prices will last until August. There is a lot of pressure building. We may yet see lower prices but in the grand scheme I believe that hindsight will show that now is the time to buy. Whether we see $18 or not, I think $22 will look darn good when the lid pops off this thing.

1) http://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=191937&sn=Detail
2) http://www.stockhouse.com/bullboards/messagedetail.aspx?s=FR&t=LIST&m=32676811&l=0&pd=0&r=0

 

Hard to predict prices in the short term. One the one hand, sentiment is somewhat negative. On the other, silver hasn't made a reasonable correction yet, which is alarming. Also, if worse numbers come out of China, it could go down more. Remember that silver is more of an industrial metal and less of a precious metal. If China slows down, silver could take a pretty bad beating. Since you don't have the cash in hand, just forget about it and wait till August.

 

Chris has done a good job explaining why it will not "stay" at $22. I agree, we will not see steady silver for a while.

The odds are you will like the price better in August than in June. The reasons are the same that drove it down to $22. Regardless, of how much it dropped, Silver is still NOT cheap. It was only a hand full of years ago when Ag was trading consistently in the 12-13 range and not that that much longer it was trading at $6.

Looking at the big picture, it does not appear the Fed is serious about tightening now.. With that said, I can't stress the wall street axiom enough. "Don't fight the Fed". The equities market should continue to improve, which in turn makes PM's less attractive. So you couple that with the fact that Silver is still not cheap, and the fact we are in improving economic conditions, the logical conclusion is lower Ag prices

We will see.

 

So, you got that OP? Clear as mud.

You could try buying a hedge. Do people sell fractional hedges or forward sell?

 

The Fed is serious about tightening. That is why bond yields are jumping up. Of course we all know that they can't actually tighten without causing equities to tank so they are probably just posturing to get people on board for further easing later on. Silver not being cheap is your opinion, not a fact. Improving economic conditions depend on which ones you look at. Overall, the conclusion is not all that logical.

 

I think it's very cheap right now so I'm hoping it stays that way lol

 

Your words are a bit confusing, you disagree with me and say the Fed IS serious about tightening, then say they won't and then take it another step and say they are posturing for further easing. Which is it?

 

Mike use Ag for silver and Au for gold. I got all excited there with gold at 12-13 just a few years ago

 

Always the case when buying futures, and one of the reasons why I stay out of the market, I like wearing my pants and shoes.......

 

LOL, I guess you were buying it from the wrong person, I'll PM you the name of my guy

(Editing my post )

 

What? He lost his pants Mike?

 

I got no comeback for that one Green

 

Neither do I. Where the devil did that come from? Aliens in our midst? :devil:

 

So true, but it is even harder for some folks to grasp that this is actaully a good thing

 

What I meant was that they are probably only going to tighten as much as they need to so that they can then respond with greater easing to placate the public's fear of losing their retirement funds which requires that we get a little deflation scare every now and again. Without that then people would focus more on the fact that they are losing out to inflation.

 

http://www.silverseek.com/article/silver-will-it-drop-10ounce-12195

Just curious, is this the source for your oversold data? Reading the article makes me nervous listening to this fund manager's strong sales pitch. He is predicting gold "very quickly" being repriced $1000 higher. Heck of a prediction.

Also, at the end:

"In our opinion, the best approach is to buy a diversified portfolio of stocks as represented in THE TIMELESS PRECIOUS METAL FUND or THE SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND instead of shares of only a small number of companies". As a pure coincidence, the author is either the employee or the owner of Timeless metals.

Not picking on you Inflexion, I simply happened across the article and wonder if this was the source of your argument.