Discussion in 'Bullion Investing' started by yakpoo, Jun 21, 2019.
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Of course there will be corrections...but when? ...and by how much?
Predicting the future is much more difficult than predicting the past.
If I knew the answers to those questions I'd have more money than Donald Trump. Lol
That's OK...I think it's fun to make predictions. I don't speculate in PMs so it doesn't cost me anything to take a WAG.
Back in 2011, I had a thread called "This Is Why No $50 Silver". Everyone thought Silver was going much higher...until it peaked at $49.85!
I get lucky once in a while.
Please keep in mind that, when PM prices are low, mines become unproductive and are "idled". As PM prices show a sustainable recovery, unprofitable (idle) mines are once again profitable and slowly brought back online.
This, along with regulatory margin controls, keeps PM prices from going to the moon. So...when Silver increases by 25% in a month (as it has this month), that doesn't necessarily mean that Silver will increase 25% every month into the future.
I know this little axiom sounds obvious now, but when PM fever really kicks in, folks seem to forget/ignore it.
Also, Silver is a by-product of many other types of mines (e.g. Gold mines). The reason Silver hasn't appreciated as much as other PMs is because secondary silver production consistently exceeds industrial demand.
Only as speculative demand increases will we see a significant run-up in prices.
Silver prices are more tied to the economy. There's a supply deficit right now and into the future, by-product supply or not.
We don't need OR want "speculative demand" for silver. You want STRONG HANDS which means folks who want to buy silver at $25 or $30/oz and hold it for years. You want industrial buyers to be buying at those and higher levels.
Speculative buyers are weak hands which can drive it up 50% in a few weeks or months....and then take it down just as fast.
These "strong hands" of which you speak become weaker as prices rise.
That's the universal truth of PMs.
Maybe.....but they won't sell on weakness.
If buyers at $25 say they will sell at $50, what does that imply about strength in the 30's ?
Strong hands are looking to HOLD. They won't get shaken out during a correction or even a big downdraft. They are looking to accumulate something over a long period of time.
If something is LOWER you should want MORE of it. However, with PM's and financial assets, sometimes lower prices scare people and higher prices entice them.
His liabilities may outweigh his assets.
They don't, but regardless, he'll be fine.
One I can think of in particular. Like a breath of refreshing cool air.
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