How Low Will Silver Go?

So far the permabulls have been wrong on the price of silver, and some are still saying it will rocket up any day now. Personally, I think silver is a good hedge and store of value, given the inflationary monetary policy. Also, assuming deflation wins against central bank easing, I still think silver is a good hedge.

So how low will silver go? The way I see it, the Wall Street boys are trying to shake out the flaky investors. I also think this is a correction in a long-term trend upwards.

 

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As low as demand will let it.

 

$15 within the next five years.

You're right that there should be a long term trend upwards because of all the money printing. But what we have seen is a huge spike upward and that spike is continuing to revert downward to the mean.

Pull a 20 year chart for the price of silver and draw a line with a steady increase in price over that full time frame. That is where the price is going to go.

 

If you remove the conspiracy about Wall Street trying to do in silver and gold, and instead see that they want to dump , not to affect PM, but to instead to move money to productive stock and other instruments. I realize that there are some fears of an inflationary era, but it seems that whenever the future seems bleaker, it improves. I subscribe to a balanced investment portfolio, although I am over in the ownership of rental property, and see no problem with 5-10% in PM. However at this time, physical seem very shaky, and the best long term plan is to consider mining stocks which are even lower than the physical. It will take longer to give good returns, but it is just an alternative. There are many here who are depending 60-80% of their future on physical PM, and that may be bad news. Of course no one knows as the next exploding asteroid might be over the US or Europe. The idea that paper will become worthless and the world will return to PM backed currency is shrinking every day.

 

I think in a long-term trend you can have corrections. I believe the market is betting on a recovery and the deflationary forces negating the monetary easing. The future of PMs will depend on the success of the Fed, and I would not bank on it given its history.

 

These are interesting points. I still believe there is large systemic risk to the financial markets. Also, I don't think the idea that bankers conspire to manipulate prices should be shunned, given the LIBOR scandal. I believe reinflating real estate is the wrong way to go, since we saw the results of real estate market excess in 2008. At the very least, PMs are a good hedge.

 

I think its reasonable to expect a $16-$18 price dip within the next 5 years, but I wouldn't hold my breath for it. I am sorta thinking $19-$21 could happen sooner than later, maybe late this summer, and would be a nice time to stack up. Recent analysis of g/s ratio says to trade your gold for silver: http://www.gold-eagle.com/editorials_12/lundeen051213.html

 

I hope it doesn't go down too far, but I really don't care too much what the price is right now. I would like it to be around $50 an ounce when I am planning on retiring in 5 years, but I have found that the price doesn't always conform to my wishes.

 

Against what? How are you using it to hedge the rest of your investments beyond a small amount for diversity?

 

Right now there is a global currency war in which nations are competitively devaluing their currencies to boost their exports and keep GDP growth in line with expectations. So long as this remains the case, precious metals are important to have. The market appears to be betting on monetary tightening coming back, but all evidence points to the opposite.

 

About tree fiddy. :devil:

 

I'll say a Jackson and a Lincoln back in change. Go too low and I may have to do direct deposit with Apmex instead of the bank.

 

This question needs to be broken into 2 parts.

How low will leveraged paper silver proxies go?
How low will physical silver go?

Paper will go to zero inevitably. It has no intrinsic value.
Physical silver is still in the high 20's. A good buying opportunity just like in 2008.

I am a permabull, and my chart analysis begs for a return to $21 in order for the next target of $114 to be fulfilled. 4 to 9 to 21 back to 9 to 49 back to 21. It's a very clear sequence, assuming it has merit.

The bull market is far from over. People are buying hand over fist.

 

The conspiracy is that the USG/Fed does not want competition for failing fiat currency. Wall St. is simply happy to oblige the agenda with all the free money they get from the Fed as primary dealers. Sure we could argue that Wall St. is running the show. At this point they are homogenous. No big fish is ever prosecuted due to systemic risk. They simply pay a fine that is less than the amount of their fraud so there is no incentive not to.

I don't see how you can say physical is shaky. Paper is shaky, but physical premiums rose to the occaison.

While I would like to remove the conspiracy, to do so would require the London Gold Pool never existed, and that more paper is not sold in a single day than metal is mined in a year on a regular basis.

I don't get how anyone can put their head in the sand on such things without either pretending they don't exist or having some benefit from it.

 

Everyone keeps asking and I keep telling 'em...silver stabilizes at $18/Oz.

 

I can't see it going much lower than that.

 

It could easily drop to $12/Oz...but it stabilizes at $18/Oz. Anything under $18/Oz is a buy!

 

Yes, I know what you mean as I see it back over the fence as well.

What in the world does the premium charged by bullion dealers have to do with "rose to the occasion"? It rose to the level of self desperation of those convinced by the bullionbulls that everyone must buy now or it they will miss the chance. If I was a bullion dealer, I would raise the premiums to as high as I could ( for my own business greed), knowing that (1) Sadly misinformed individuals would pay twice or more the previous premium, and (2) I could buy it back at a later time and hedge for the present. It is amazing how this act means that physical silver is becoming more valuable as it decreases in spot price.

Several years ago, you could say paper ( USD) was shaky, and I would have agreed. It looked like Europe , BRIC , and others were going to wipe our money out of contention for the 'world currency', but if you look at exchange rates , the opposite happened.

I see nothing other than an unexpected world catastrophe changing the path of PM declining as the rest of the world continues to climb out of their problems. And depending on doom and gloom and world catastrophes to boost precious metal investment is a precarious one.


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I will have to respectfully disagree. The main reason why the dollar appears so strong is because all major economies are competitively devaluing their currencies to boost GDP. The dollar is also considered a safe-haven due to America's superpower status. A clue to how weak the dollar is, were it to have half-decent competition, is the strength of the euro relative to the dollar (each euro is worth $1.29). I believe the reason why the euro is so strong is because the markets are impressed with Draghi's "sterilization." Recently, Australia cut interest rates, and before they did Japan embarked on a $1.4 trillion QE program to lower the value of the yen.

I do not believe paper currencies are stronger than ever, or that their outlook is improved. What has happened is that investors were spooked by the prospect of a global deflationary depression, and the global QE has worked to temporarily prevent it. However, we are in uncharted territory with all of this QE, and whether it leads to hyperinflation in the long run appears to be a very legitimate concern. After all, all major economies are now dependent on continuous easing by the central banks.

 

Personally I see an American renaissance coming in 2014 and beyond. I think a lot of investors can't see the forest for the trees. Betting against the USD over the next few years seems to be a no win. USD gets stronger due to the renaissance or USD gets stronger during crisis. This should have caught everyone's attention today.

“North America has set off a supply shock that is sending ripples throughout the world,” said IEA Executive Director Maria van der Hoeven, who launched the report at the Platts Crude Oil Summit in London.