silver at rock bottom ?

I think the low price for silver is $18.01 - $19.33

 

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I think silver is a safe buy at the $26xx-29 range. it went to low-mid $26 four (5?) times in the last few months and always bounced back, so far. I've been buying. got some gold 3 months ago @$1540 also.

 

I do not think silver is at rock bottom, especially since paper contracts can actually take the price to zero. The question is how low would it have to go to cause a divergence in the physical market price discovery, which I do not know. My guess is that it would happen before dropping as low as $20/oz. I do think that gold under $8,000/oz and silver under $500/oz is undervalued however, based the former ratio used with gold to back the money supply and then inferring silver based on the historical gold/silver ratio. It's not an exact science but it makes sense to me. Even if gold and silver don't back our money again (central bank gold buying has doubled since a year ago so that does look likely), I still think silver is far undervalued due to how much supply has been used up over the last century, but there's really no telling how low it can go as long as it's available. The moment some company screams that they can't get their hands on any metal for their product, and it impacts their bottom line then price will become no object as it gets passed on to the consumer. Assuming the market regulators know this I do not find it likely that they will let the price go much lower than it is because that would bring out that many more physical buyers. Sub $30/oz silver is low enough to convince the average Joe that silver isn't a very good investment, and to encourage faith in paper currency which is the whole reason for keeping metals down in the first place.

One of my buddies in real life that is into gold and silver as much as I am told me he thinks that in 2013 when people realize that the world isn't ending in 2012, assuming that it doesn't, that all those people who think it will end will suddenly realize they need to actually plan for the future and get in on precious metals instead of living frivilously. I thought it was an interesting concept, but ultimately I look for metals to rise because of more money printing and also from existing money banks are holding that haven't yet been loosed on the market.

 

The best advice I can give with regard to investing in anything is a concept called "dollar cost averaging". Here is a link that I thought was useful:

http://beginnersinvest.about.com/cs/newinvestors/a/041901a.htm

I have invested both ways: buying all at once thinking something was "at the bottom", only to watch it fall significantly after that, and the dollar cost averaging method which I learned later. It is the best way, IMHO, to reduce reduce volatility in whatever it is you are investing in.

The OP posted in another thread about his weekly purchases of silver coins. If he is paying SPOT for them, he is in essence already dollar cost averaging by spreading out his purchases over time.