Can someone explain how the "paper" market for silver and gold works?
291fifth
Posts: 24,549 ✭✭✭✭✭
How can it be manipulated, etc.?
All glory is fleeting.
0
Comments
Why should silver and gold be any different?
Check out the Southern Gold Society
Think of all the manipulations you could do with tulip farming and delivery/storage and you can get a feel for what could go down with the silver ETF.
roadrunner
Now, if the government says that I only have to keep a fraction of that $10.00 worth of silver in actual, physical bullion form, say - maybe only 10% in actual silver - then I can go out and spend about $9.00 of your money on booze & women, and nobody will ever know the difference.
I knew it would happen.
<< <i>How can it be manipulated, etc.? >>
Why? Wanna buy smoe silver?
I'll write you an IOU and you give me $17/ OZt for any amount you want. I'll charge you only 1% annually for "storing" "your" "silver" for you. (wink, wink, nudge, nudge). As long as my investments go well and silver doesn't go up too much you'll get every nickel you're owed.
If anything goes wrong you might have nothing but a piece of paper.
And cladking will be living in Tahiti with a sizeable account in Switzerland!!
(I think that my certificates are a much better deal, frankly.)
I knew it would happen.
Physical metals are fine to have in small quantities.
Anybody who wants to make BIG money on price changes
can only do so with futures-contracts OR with the ETFs.
can only do so with futures-contracts OR with the ETFs?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Are you some kind of broker?
I knew it would happen.
We all know that......and it's what makes them very unsafe as long term bets. Anyone holding long term should be in physical, regardless of the amount. Check with Buffet as he had 120,000,000
ounces in physical before the FED's "urged" him to sell. Had an ETF been around at that time, no way he would have been in it.
If you want safety (and that's usually why people flock to metals), then you want it in your hands. If you're the gambling type who plays the markets, by all means use SLV and trade it in seconds.
You can make a lot of money in that if you know how to trade.
Me, I want safety and security. Also talk to former holders of silver under Bear Stearns. Seems the old BS was promising to hold silver under storage for its customers...until it was found out they had none of it and were trading that money. No surprise they are kaput today.
roadrunner
<< <i>The ETFs GLD and SLV are NOT redeemable for metals.
Physical metals are fine to have in small quantities.
Anybody who wants to make BIG money on price changes
can only do so with futures-contracts OR with the ETFs. >>
Hmmm.... well, let's wait and see what is happening right now. Awfully strange.... that all major dealers are totally out of silver, and the price is... kinda cheap. Makes no sense to me. Could be that anyone holding any silver.... just might be very profitable in a short time from now. Small quantities? Myself, I wish I had much more right now...
can only do so with futures-contracts OR with the ETFs? "
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Generally that is TRUE.
The bagholders who were paying $22+ for bars and eagles
a week ago, ONLY lost the amount wiped out in the decline.
Those loses may get worse, or they may reverse into profits.
Despite the mistaken opinions of others on this board, the ETFs
SLV and GLD are backed by the value of physical deposits - less
fees and commissions. These ETFs are NOT redeemable; they
trade liquidly, just like any exchange traded security.
Having 1000+ ounces in hand is fine, in case of "emergency."
Having control of 20,000 ounces on each trade - multiple times
per day - is substantially more profitable.
I am not a broker. I have traded commodities since the mid 70s.
My guess is those who keep their powder dry will have some
good entry points on both gold and silver as summer approaches.
It is better to miss a rally than to get caught in the HUGE dump
that now appears to be coming.
//////////////////////////////////////////////////////////////////////////////////////////
That stash was transfered to the ETF SLV at the fund's inception.
He sold much of it at a loss; most at about break-even.
may not actually exist. Thus in a real blow up, you
may or may not get either your money or the silver.
It is a con game of the first order. The bigger the company
offering the paper, the bigger the con. Always take possession.
of any PMs that you purchase. Possession is not only 9/10ths of the
law it is just good common sense in this age of phantom assets.
Camelot
<< <i>"Isn't it also true that anybody who wants to lose BIG money on price changes
can only do so with futures-contracts OR with the ETFs? "
///////////////////////////////////////////////////////////////////
Generally that is TRUE.
The bagholders who were paying $22+ for bars and eagles
a week ago, ONLY lost the amount wiped out in the decline.
Those loses may get worse, or they may reverse into profits.
Despite the mistaken opinions of others on this board, the ETFs
SLV and GLD are backed by the value of physical deposits - less
fees and commissions. These ETFs are NOT redeemable; they
trade liquidly, just like any exchange traded security.
Having 1000+ ounces in hand is fine, in case of "emergency."
Having control of 20,000 ounces on each trade - multiple times
per day - is substantially more profitable.
I am not a broker. I have traded commodities since the mid 70s.
My guess is those who keep their powder dry will have some
good entry points on both gold and silver as summer approaches.
It is better to miss a rally than to get caught in the HUGE dump
that now appears to be coming. >>
I don't disagree with you but consider that if silver is disappearing into
the woodwork by investors and other physical buyers then interest in
the SLV will increase as well. It is this increase during tumultuous times
that might be a real problem here. Your protection will be limited to the
amount of metal actually in storage. If in addition to the growing demand
for this financial product they have the same difficulty obtaining physical
silver that other buyers are having then they could be net short a signif-
icant amount at some point in the future. This could even be exascerbated
by an unwillingness on their part to pay over market price.
They're fine for now and the second best way to own silver.
that now appears to be coming.
One of us appears to be on the wrong side of the trade.
I knew it would happen.
<< <i>
That stash was transfered to the ETF SLV at the fund's inception.
He sold much of it at a loss; most at about break-even. >>
Are you sure of this?
My understanding was that he paid an average of only about $5.90 and sold most at $7.50. I also thought the metal went through a third hand before most ended up in the SLV.
/////////////////////////////////
EVERYBODY should have some in their safe.
BUT, most folks cannot take delivery of the 100K+ ounces
a day that they can trade using the ETF SLV.
Paper and physical both rise and fall by the same amount so why go through the hassle of handling and storing physical. I am all about convience and efficiency so its all ETFs for me.
Knowledge is the enemy of fear
<< <i>
<< <i>
That stash was transfered to the ETF SLV at the fund's inception.
He sold much of it at a loss; most at about break-even. >>
Are you sure of this?
My understanding was that he paid an average of only about $5.90 and sold most at $7.50. I also thought the metal went through a third hand before most ended up in the SLV. >>
//////////////////////////////////////////////////////////////////////////////////
He has said that his investment was not a good one.
However the inventory got there, it was used to launch the fund and is currently backing SLV;
according to SEC filings.
That stash was transfered to the ETF SLV at the fund's inception.
He sold much of it at a loss; most at about break-even.
Now that almost smacks of more collusion and strong-armed tactics to get Buffett's silver out of his hands and into a place where it could be controlled by the cartel. Sheer genius again. The FED and company sure know how to do their work.
Reports I read indicated he made $2 an ounce or something to that effect. If he got future favors from the govt (like the muni-bond fund insurance) then he was a big winner long term.
The bagholders who were paying $22+ for bars and eagles
a week ago, ONLY lost the amount wiped out in the decline.
Those loses may get worse, or they may reverse into profits
Or if they hold on for the long term, will be slapping themselves silly when silver is in triple digits. It's very rare that you can get it in totally risk free. I'm one of those bag holders you just mentioned.
Got 500 ounces last weekend at $20 or so and know that later this year I'll be in a profit position. And by 2011 it will be well over $100. Time is on our side....not the trader's. Knowing that I bought most of my silver at 3X to 4X face several years ago does soothe the current hurt just a tad.
roadrunner
The notion that silver will be in triple digits soon
is fun to contemplate, but far from a sure thing.
MANY folks do not have cash to meet their basic needs.
Cash is not going to go out of fashion soon.
The idea that metals will displace paper-money is most
unlikely; UNLESS the whole system crumbles --- like the
pump-and-dump gang was telling folks it would in 1980.
NOTE: I have lots of PMs. I am not short the ETFs.
<< <i>The ETFs GLD and SLV are NOT redeemable for metals.
Physical metals are fine to have in small quantities.
Anybody who wants to make BIG money on price changes
can only do so with futures-contracts OR with the ETFs. >>
Now that's just silly.
I'm not gonna tell my story again, but you can make BIG money dealing in the physical and there's little to no risk involved.
Anytime somebody else has my money, well, that's not gonna happen.
The silver ETF is being exposed for the scam that it is as we type today.
Anyone who owns that should be felling very confident knowing that Bear-Stearns held the physical silver for the ETF and probably only around 1-3% in physical metal compared to what had actually been sold on the lie that it was fully 100% backed by the actual metal.
What a scam for the manipulators!! Despite it's original promises, it was always designed as a paper scam, IMO.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>"Check with Buffet as he had 120,000,000 ounces in physical before the FED's "urged" him to sell. Had an ETF been around at that time, no way he would have been in it."
//////////////////////////////////////////////////////////////////////////////////////////
That stash was transfered to the ETF SLV at the fund's inception.
He sold much of it at a loss; most at about break-even. >>
That's completely untrue.
I'm beginning to smell a rat.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I don't disagree with you but consider that if silver is disappearing into
the woodwork by investors and other physical buyers then interest in
the SLV will increase as well. It is this increase during tumultuous times
that might be a real problem here. Your protection will be limited to the
amount of metal actually in storage. If in addition to the growing demand
for this financial product they have the same difficulty obtaining physical
silver that other buyers are having then they could be net short a signif-
icant amount at some point in the future. This could even be exascerbated
by an unwillingness on their part to pay over market price.
They're fine for now and the second best way to own silver. >>
They are net short well over 95% right now. They can't get much further.
The second best way to own silver is 90% coins, the first is .999 refined.
The only thing SLV sells is paper. Crank up the presses as needed.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Cash is not going to go out of fashion soon.
The idea that metals will displace paper-money is most
unlikely; UNLESS the whole system crumbles --- like the
pump-and-dump gang was telling folks it would in 1980.
MANY folks are sellers of silver and gold at today's levels. It is the investors and speculators that are taking it to 3 digits. It will not matter if J6P participates or not. Big money will be looking for a big safe haven. This is not 1980 where derivatives only existed in futures and options (not OTC crap at $350 TRILL or more) and off balance sheets are ways to avoid GAAP reporting. The system is far more ripe to crumble today that it did in 1980. Jacking interest rates and raising margin requirements on silver was all that was needed to break the market (..well...20% interest rates). Today we're not in the same kind of shape to take that type of chemotherapy for our cancer.
Don't look now, but silver and gold are cash, much more so than FRN's and other fiat. Gold has been replacing cash as money since about 2001. Gold has quadrupled while the dollar is down 40%. That tells me gold is increasing faster than currency is dropping (hence displacing the dollar at an increasing rate).
roadrunner
I'm beginning to smell a rat.
...........................................................................
You are WRONG.
The transfer of WB's stash was widely reported at the launch of SLV.
He has repeatedly noted that his venture into silver was NOT a good one.
////////////////////////////////////////////////////////////////
Simply not the case.
Barclay's has audited reserves in the exact amount required to
track the traded shares. SLV and GLD are both fully reserved.
The "presses" never crank-up. The number of shares is fixed
at each filing period and does not increase beyond the reserve
requirement --------- that requirement is 100%.
SLV is NOT a redeemable share/cert. It is a tracking vehicle
that trades for CASH on every major exchange in the world.
<< <i>Check with Buffet as he had 120,000,000 ounces in physical before the FED's "urged" him to sell. Had an ETF been around at that time, no way he would have been in it."
That stash was transfered to the ETF SLV at the fund's inception.
He sold much of it at a loss; most at about break-even.
Now that almost smacks of more collusion and strong-armed tactics to get Buffett's silver out of his hands and into a place where it could be controlled by the cartel. Sheer genius again. The FED and company sure know how to do their work.
Reports I read indicated he made $2 an ounce or something to that effect. If he got future favors from the govt (like the muni-bond fund insurance) then he was a big winner long term.
The bagholders who were paying $22+ for bars and eagles
a week ago, ONLY lost the amount wiped out in the decline.
Those loses may get worse, or they may reverse into profits
Or if they hold on for the long term, will be slapping themselves silly when silver is in triple digits. It's very rare that you can get it in totally risk free. I'm one of those bag holders you just mentioned.
Got 500 ounces last weekend at $20 or so and know that later this year I'll be in a profit position. And by 2011 it will be well over $100. Time is on our side....not the trader's. Knowing that I bought most of my silver at 3X to 4X face several years ago does soothe the current hurt just a tad.
roadrunner >>
You know, considering that Buffet sold several years before the inception of the silver ETF makes this story either complete BS or one whale of a manipulation that was in the planning for quite a long time in advance. Yes, he sold for a very good profit, around 30% or so, as we both know. Wonder why they haven't gone after Bill Gates yet? I believe he took physical control of massive amounts back around the same time Buffet did, but apparently he still holds it.
Noting could make me happier than to see SLV go belly up.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
At the time, it WAS difficult to confirm that the silver actually came
from WB. However, he subsequently discussed the sale. The 120-140
number was what initially led reporters to assume that WB was involved;
that was the number of ozs that WB was acknowledged to hold in June 2005.
<< <i>MANY folks do not have cash to meet their basic needs.
Cash is not going to go out of fashion soon.
The idea that metals will displace paper-money is most
unlikely; UNLESS the whole system crumbles --- like the
pump-and-dump gang was telling folks it would in 1980.
MANY folks are sellers of silver and gold at today's levels. It is the investors and speculators that are taking it to 3 digits. It will not matter if J6P participates or not. Big money will be looking for a big safe haven. This is not 1980 where derivatives only existed in futures and options (not OTC crap at $350 TRILL or more) and off balance sheets are ways to avoid GAAP reporting. The system is far more ripe to crumble today that it did in 1980. Jacking interest rates and raising margin requirements on silver was all that was needed to break the market (..well...20% interest rates). Today we're not in the same kind of shape to take that type of chemotherapy for our cancer.
Don't look now, but silver and gold are cash, much more so than FRN's and other fiat.
roadrunner >>
Neither our currency nor our economy are likely to collapse but this doesn't
mean that there can not be substantial revaluation for gold and silver.
Gold has been ignored and belittled for decades because the computer in-
creased productivity and efficiency at a far greater rate than government
expanded and the print presses accelerated. But these presses have been
working overtime and much of the improvement possible with the current
generation of computing has played out. Government is still growing and
this is causing inflation to start showing. People are not in gold and will con-
tinue to reposition into gold until inflation shows signs of abating. This means
higher gold prices.
Silver is a different animal. Its price is caused by inertia. There has always
been ample amounts of silver because it was gold's weak sister. Things can
change very gradually and people just don't notice. One day they wake up
and realize that what they thought would always be around is gone. Well,
this has happened with silver. It wasn't apparent because it had such small
value that it sat around in plain sight. It sat in coin shops displayed in all the
cases while vast quantities of gold fills safety deposit boxes and warehouses
all over the world. No one has even seen the US mammouth gold supply since
the 1970's and even then there were just a few pictures.
Meanwhile the total amount of silver in the world has just continued to drop as
production can not keep up with consumption. This consumption tends to be
high tech and it tends to be irreplaceable and independent of silver price.
Perhaps the day the world wakes up is still far off but in the long run the silver
will be gone and there will still be a strong demand.
<< <i>He has repeatedly noted that his venture into silver was NOT a good one. >>
It was 1998 when Warren Buffet purchased 120 million ounces of physical silver and the spot price rallied over $3 and the one month cost of borrowing silver soared over 30%.
Yep, sounds like a bad investment to me.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
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WARREN BUFFET'S SILVER ALL SOLD!
Posted By: SimpleFarmer <Send E-Mail>
Date: Wednesday, 10 May 2006, 12:00 a.m.
Warren Buffet no longer has his 130 Million ounces of Silver.
Is it part of the new Silver ETF, who knows. What is known is that the 130 Million ounces was always included in above ground stockpile figures.
That just came off the table.
I do know that Barclays has been taking small deliveries off of the Nymex Exchange.
Part of kitco article below.
Good Morning Bill,
A posting on the Café Chat Board reported the Warren Buffet announced that Berkshire Hathaway sold their silver hoard, believed to be 130 million ounces. http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060506:MTFH42180_2006-05-06_21-53-36_N06222878&symbol=BRKa.N&rpc=44. This information is long term bullish when combined with Jeffery Christian’s reporting that India sold ½ of their 60 million ounces last year and is selling the remainder this year. The silver cupboard is getting empty pretty fast. With the silver price rocketing in spite of these sales, what do you think will happen when this easy silver dries up? Regards,
-Bryant Blake
Bill,
Warren Buffett is undoubtedly the great stock market investor of our era, and a superlative businessman to boot. I cannot help but note, however, that in fields where he is not as experienced – like forex and commodities – his results have been pedestrian. Today we have learned that in a time frame during which silver tripled, he made nothing ("We had a lot of silver at one time but we don't have it now," and, "bought it very early and sold it very early. Other than that, everything I did was perfect."*).
On top of that, during a dollar bear market, he has, on balance, lost his company $700 million by selling dollars shortly before they began a counter trend rally. To compound the pain, he closed out most of his short dollar position just before the dollar resumed its decline.
It just goes to show that we should all stick to investing in areas we know and understand well, even if your name is Warren Buffett.
Best wishes,
Peter R.
Dear Bill:
Dave Morgan reported today (Sun 5/7) that Warren Buffett reported at the Berkshire meeting that "they sold all their silver" and that "they got in early and got out early".
This sale could answer many silver mysteries. What if Barclay’s allied with key silver shorts and bought out Berkshire a few weeks ago…say that they paid $2 over the then current price of $8 or $9. What if the shorts saw that foreigners were losing faith in fiat money in general and the dollar in particular and quickly paid off Buffett?
What if the shorts used the silver ETF as a smokescreen to explain higher silver prices (which could never totally make sense since gold was surging at the same time)?
What if the shorts are planning to use the news of the Berkshire sale to cover even more shorts now? What if the shorts underestimated the popularity of the silver ETF?
Now it makes sense why our government approved the ETF when experts such as Butler and Morgan questioned how it could be approved because the physical was not there. Now it also makes sense why no physical was moving to satisfy the ETF (both Berkshire silver and ETF silver are in London).
It seems to me that what we have here is an explosive combination of:
1) Silver shorts trying to get out on the cheap.
2) Camouflage of the extent of foreigners loss of confidence.
3) Shorts underestimating silver ETF’s popularity.
4) No change in silver’s long term awesome potential.
This could make for a very wild silver ride this week.
Bob Kaiser CPA
Bill,
So it is confirmed from the Berkshire meeting that Buffett sold his silver and so is probably the source of the Barclays ETF silver and not George Soros. I would suspect he has been leaned on AGAIN by the establishment. He knows what a precious metals bull market looks like and it is totally implausible he would sell out so early on his own accord.
Cheers
Adrian
http://msnbc.msn.com/id/12665304/
Bill,
Amazingly it seems Buffett didn’t hang on long enough to make any money in silver!
QUOTE -He added that Berkshire had not benefited from the particularly steep rise in silver prices, despite at one time owning a lot of the metal.
"I bought it very early, I sold it very early. Other than that it was perfect," he joked. –END
He didn’t spend much time talking about it. It is very strange that someone who so correctly called the decline in the dollar would sell out 138 million ozs of silver before it had appreciated! There must be some skeletons in the closet on this one.
Cheers
Adrian
There is something about Buffet and his silver/dollar boffos that doesn’t pass the smell test, as per what Adrian is alluding to. From MIDAS commentary at two points last year:
August 30 - Gold $430.10 down $6.10 - Silver $6.69 down 3 cents
Let me go retro to a MIDAS of 4 1/2 months ago:
April 15 – Gold $424.30 up $1.10 – Silver $7 down 4 cents
The John Brimelow Report
... Seeing the stories yesterday of Warren Buffet allegedly cutting his dollar short positions brought back memories of the Phibro/Salomon silver position, suddenly taken on Easter Monday 1994, shocking the market, and then mysteriously liquidated. There was a story (which I believe to be true) that Buffet, then influential at the firm, ordered it sold on the grounds it was attracting hostile attention from Washington. Possibly the AIG/General Re situation is more of a problem than most assume.
JB
Two notes on JB’s always superb input:
1. The open interest reduction was a result of The Gold Cartel covering and in line with my earlier comments.
2. Buffett’s firm was Salomon Bros. Jimmy DePiazza of Phibro, a Salomon subsidiary, had the silver market cornered. Salomon was going through a bond scandal because of a huge guru bond trader named Meriwether. The government suggested Phibro dump their silver position or Salomon would have US agents all over their operation and books for years to come. Buffett caved.
***
Buffet caved in 1994 and he very well could have caved again this year for a very similar reason. Help us Mr. Buffet or the government will be all over your companies.
http://www.lemetropolecafe.com/Pfv1.cfm?pfvID=4838&SearchParam=Phibro
-END-
Fascinating, to say the least.
As for me, 130 million ounces of silver is no longer an overhang. MIDAS remarked the obvious over and over again about how poorly silver acted last year relative to gold. Something was bogging the market down. We just did not know what. Once Buffet was done selling, silver took off and doubled in price. Now that the world knows his selling is out of the way, the price of silver should continue its newfound move higher.
Whether the silver was handed over to Barclays, or Buffet dumped it just prior to the price doubling, it is out of his hands … and Buffet’s public commodity/dollar trading acumen has been sorely tarnished.
http://www.kitco.com/ind/Murphy/may092006.html
There are a few good thoughts in those excerpts and I have no doubts Warren was strong-armed into taking the deal. No one here knows the details of the transaction. It's one thing for a more private individual like Gates to be hoarding silver, but entirely different when a Captain of Industry who has provided solid and "old style" investing logic to diversify into silver. Guess you could say he was the 2nd ETF after the Hunt brothers, so until he did sell there was always the risk of 138 MILL ounces of silver showing up at the wrong time. Once in the ETF, it could be controlled and managed by TPTB. It would make sense that Warren accumulating that amount of silver for the ETF really did them (ie the cartel) a big favor in getting started.
Barclay's has audited reserves in the exact amount required to
track the traded shares. SLV and GLD are both fully reserved.
Are these audits any better than what has been done on the US gold stocks each year? That is, where an "independent" 3rd party auditor shows up, checks only the books, doesn't look at any gold, and then says everything looks fine? Yeah, that's the kind of audit I'd want on my silver inventory if I were the ETF holder. A reminder that Barclay's is in the palm of the FED/PPT/wall street hands. A better patsy you could not find. Maybe Warren would have made a better ETF!
roadrunner
<< <i>I bought 500 shares of SLV yest at 166.50. It should bounce up about $6 on Monday/Tuesday. When it does I sell and pocket $3000. Total transaction time of both and sell is about 10 seconds and I do it from my house. Sure is easier than lugging 5000 oz to my dealer and having him offer me 96% of spot. Easier on the environment also as I dont have to drive anywhere.
Paper and physical both rise and fall by the same amount so why go through the hassle of handling and storing physical. I am all about convience and efficiency so its all ETFs for me.
Just for disclosure, I sold my SLV at 173.11 this morn. And that is why I see an advantage of the ETFs over physical.
Knowledge is the enemy of fear
cohodk, nice trade. And the reason I sold at 204-205 the other day is the reason I didn't get back in at 160. The reason - it's paper, and one day (maybe soon), that's all it will be.
I knew it would happen.
most PM "bugs" would rather pay $22 or 23 dollars a OZ. for the physical metal than buy SLV at spot at over 25% less.
imho, two things will happen: One the physical price will drop to spot or spot will rise to the physical $, either way, I think it makes sense to buy at the lowest price.
OK, I know I know....the world monetary system will collapse, SLV is just a hype with no tangible assets and the only winners will be the people with wheelbarrows full of silver bars, hiding out in their bunker
<< <i>
As for me, 130 million ounces of silver is no longer an overhang. MIDAS remarked the obvious over and over again about how poorly silver acted last year relative to gold. Something was bogging the market down. We just did not know what. Once Buffet was done selling, silver took off and doubled in price. Now that the world knows his selling is out of the way, the price of silver should continue its newfound move higher.
l >>
The main thing that happened to silver last year was $14.50 resistance.
I warned people long ago that this would be a huge hurdle to silver because
there were millions of tired longs who would unload when they could "break even".
That resistance is gone now and forms support that may "never" be tested.
<< <i>Facinating.....I smell the mother of all arbitrages.
most PM "bugs" would rather pay $22 or 23 dollars a OZ. for the physical metal than buy SLV at spot at over 25% less.
imho, two things will happen: One the physical price will drop to spot or spot will rise to the physical $, either way, I think it makes sense to buy at the lowest price.
OK, I know I know....the world monetary system will collapse, SLV is just a hype with no tangible assets and the only winners will be the people with wheelbarrows full of silver bars, hiding out in their bunker
"PM bugs" aren't paying $22. You can't count the idiots on eBay.
The spot price will return to the $22+ range in the next several weeks, a 30% downturn has been the norm for years now after sharp rises. I've been through this several times before. As I've often said, Silver can be a cruel mistress and it's not for the faint of heart.
The SLV does have tangible assets, just not the amount they are hyping and selling, IMO.
People with wheelbarrows full of silver bars do not live in bunkers. Storage has never been the issue that some used to use as an argument. Most of us bought in years ago because we all saw this coming back in '01 and '02, we've done quite well just from an investment standpoint alone so far and we're nowhere near the top. Three digit silver is a certainty and not as far away as some would like to believe.
They may not be the only winners, but they will be sure fire winners in the long run, the same cannot be said of the owners of paper metals.
While we do have obvious manipulation, thanks in part to all the paper silver buyers, there is also a true shortage and it's beginning to rear it's head. Industrial stockpiles are at all time lows worldwide and that's not a manipulation, nor is it a coincidence.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff