The more that I study bullion speculation, the more that it becomes evident that Central Banks are the real heavy hitters. They are the ones influencing PM Prices. They bought thousands of tons of gold last year and are pretty much sitting on it. Silver on the other hand is a different story. The game is going on and they are an active participant. Central Banks are clearly buying on the dips and then getting out early. For instance Silver is currently around 27 per oz. I predict that prices will get no lower than 25 before central banks make a major purchase. When they make a major purchase they have enough influence that they effect supply. Supply goes down and silver prices spike. So prices begin to rise until they reach the point where the influence runs out. This is when they dump. They will not wait for silver prices to get 60+ because they won't get there. As soon as central banks sell they flood the market, thus bringing prices down. So it is a repeating cycle that is happening over and over. Fluctuation between prices of 20-s - 30's. So time and time again Central Banks are making Billions of dollars per transaction. Why would they stop? In my opinion the key is to follow their patterns. Wait until they sell, give it some time.. let silver get to the mid 20's-low 30's and then stock up. Don't get greedy and wait for the low 20's because if they make a major purchase your out of the game. Likewise sell in the mid 30's and before the central banks do. If they dump, you have to wait an entire cycle. With this being said I don't see silver prices going above 40 per oz unless the purchases become larger and larger.
http://silverinvestingnews.com/tag/central-banks http://isharesblog.com/blog/2011/04/28/don%E2%80%99t-mistake-your-silver-for-gold-%E2%80%93-central-banks-don%E2%80%99t/ http://www.marketoracle.co.uk/Article26706.html
All I know is it seems like there are more people buying silver now more than ever. Not only that industries are still finding more uses for silver even today. I don't know what affect central banks have on the price of silver but I would think it would be minimal otherwise why wouldn't they just take complete control and make a killing? I would think they face too much regulations to make a difference, jmo. So are y'all buying silver in today's market or not and do you think it's going up?
This theory is probably just a load of crap, but I really thought I was seeing something here with the central banks. On the other hand I feel strongly that now is the time to buy silver (physical silver).
At the moment I'm not "buying" silver per se, but trading in other forms of it to get newer bullion so the current price isn't as important to me right away. For example I've cleaned out my parents house a couple years ago, and am finally sifting through the last of all the stuff they had. I'm finding silverware (plated and pure sterling), as well as jewelry and other things above and beyond the coin collections. I've been taking all that and trading it in for both silver and gold pieces of the same weights - i.e. last bunch of silverware I turned in equalled 60 oz of silver, so I got a mix of bars and rounds. To date I'm up to about 150oz silver and about 3 oz gold in just the exchanged bullion. Once I'm done with all that, I'll assess where things are and probably start buying silver and gold little by little over time. I view this not as an investment turnaround (i.e. buy low, sell high, lather rinse repeat), but more as insurance over the long term. For me, if it keeps place with inflation I'm happy because to me it seems more secure than having US bonds in the portfolio. I have something physical, as well as something that's globally recognized and has weight behind it (pun intended), much more so than printed paper stuffs. I can sell it if I need it in hard times, and it will always hold some sort of intrinsic market value that can be exchanged for whatever at the time, be it real goods, or more printed paper stuffs.
I'm such a n00b, had to google that to understand... I don't think I have any of that, haven't seen that name pop up so far. But, yeah, same idea.
I've been dollar cost averaging silver buys for years. When I can affort to buy, that's what I do. I don't do a huge amount of "speculation"....just buy silver. Silver isn't the only thing I collect, but with silver's volotility... dollar cost averaging is one way to tame the beast.
It's not in central banks interests to buy silver. They can, but with the unintended consequence of sending the price through the roof. There is not enough silver available for them to buy it without squeezing the market. The whole purpose of central banks is to promote fiat currency, so they aren't going to buy silver and shoot themselves in the foot. Once the price gets high enough for the big money to be able to pile in then it could cause a virtuous cycle.
