dollar index to 69 for silver to get back to $21 ?

konsole

I was comparing the dollar index chart with the silver chart and saw that for roughly every 1.5 points the dollar index moved, silver moved about $1 in the other direction. With silver at about $17.50 and the dollar index at about 75.5 this means that for silver to rise another $4 to the $21 level the dollar index would have to fall to about the 69/70 level. Considering how far the stock market has risen and that the dollar and stocks have had an inverse relationship for a while now, I think its safe to assume that once a moderate stock market correction starts, the dollar will rally and move even further away from that 69 level, pushing the $21 point for silver even further into the future.

Does anyone have any thoughts on this? Will the dollar and the overall market have an inverse relationship for the foreseeable future?

jmski52

I don't think the relationship is linear, and I think that supply-demand for silver will (ultimately) impact pricing more significantly than will the dollar's devaluation.

Although silver valuation has a monetary component, I believe that the physical silver market will become "the elephant in the room" as we proceed.

There will be a point when it really won't matter what the dollar is doing, as far as silver is concerned.

Norseman88

<< <i>I don't think the relationship is linear, and I think that supply-demand for silver will (ultimately) impact pricing more significantly than will the dollar's devaluation.

Although silver valuation has a monetary component, I believe that the physical silver market will become "the elephant in the room" as we proceed.

There will be a point when it really won't matter what the dollar is doing, as far as silver is concerned. >>



This is the end game and will result in a blowoff in Silver that will shock many people but it will probably be many years in the future before this happens.
I can see Silver running to the $25 range on the next advance then falling back into the mid teens building a base then the next stage will take it beyond the old high of $50 then falling back into the $30 range before blasting off above $100 and possibly much more in a situation where physical supply is short.
My ultimate high would equal the inflation adjusted all time high of $50 which at this point in time would be roughly $140-150 but some people think it will eventually be priced as high as Gold. Of course if you forward 20 years from now the inflation adjusted high could theoretically be wherever inflation takes it whether it be $150 or $1,500.

BigRick

DX

Justacommeman

.72 on the UDX should do it..........I would be shocked if it didn't

MJ

jmski52

This is the end game and will result in a blowoff in Silver that will shock many people but it will probably be many years in the future before this happens.

I've been hearing this type comment for years, if not decades. I do think that we will see some interesting action in silver, but I don't know anyone who has enough information to predict when that will occur.

The trigger will be a supply/demand imbalance and ultimately the market will speak. Until that time, we wait and watch. (And buy, and hold, and do all the other things that people do). No sense getting excited before the fact.

TrustNo1

will the US Mints 2010 offerings including the 5 oz pieces affect the market? I imagine that they have bought an awful lot. Though I dont get the cancelling of the 2009 Proof eagles

jmski52

will the US Mints 2010 offerings including the 5 oz pieces affect the market? I imagine that they have bought an awful lot. Though I dont get the cancelling of the 2009 Proof eagles

It's Congress that mandated the 5 oz. hockey puck series. The Mint just goes through the motions within their own scope of authority. They stopped playing with the fractionals, most of the proofs, and the "W" burnished coins, probably because they got so many programs going that they couldn't do any of them very well. (The fractionals, the proofs, and the "W" burnished coins weren't mandated by Congress, and the Mint conjured up those ideas all by themselves, without any authority from anyone.) Now, they've backed off because they got too busy, imo.

<begin rant> So, now we're back to Congress and their brilliant ideas for whatever the heck they decide is brilliant at the moment, like making 5 oz. "quarters" that are identical to a whole new series of state quarters, making a program that was already too long even longer. Excuse me, but I just can't get excited about the way these decisions are made, even if I like the idea of 5 oz. bullion itself.

I like the idea of 5 oz. bullion, but I don't like the idea of paying high premiums because they happen to be distributed through a politically-well connected network of "dealers" and I don't like the idea of a redundant series of designs that were done for political patronage in the first place. We'll see what the cost to the public ultimately is. <end rant>

If they consume a reasonable amount of silver with this program, it's just another way that silver will be drained from the available pool, making it that much sooner before a supply/demand imbalance develops.

Once that imbalance manifests itself as a silver shortage, expect it to be a more pronounced shortage than the last one, in 2008. As cladking will tell you, the easy sources for silver are gone and quantities of silver are fairly dependent upon other types of mining, i.e., lead and zinc, and some gold. The price of silver has to get pretty high in order to drive the economics of a mine that isn't primarily mined for silver.

Norseman88

<< <i>This is the end game and will result in a blowoff in Silver that will shock many people but it will probably be many years in the future before this happens.

I've been hearing this type comment for years, if not decades. I do think that we will see some interesting action in silver, but I don't know anyone who has enough information to predict when that will occur.

The trigger will be a supply/demand imbalance and ultimately the market will speak. Until that time, we wait and watch. (And buy, and hold, and do all the other things that people do). No sense getting excited before the fact. >>



I'm not getting excited, $17 Silver is nothing to get excited about but I am positive that whether you have a currency crisis or physical shortage Silver will have it's run.

DoubleEagle59

Another thing to consider is the out of whack gold to silver ratio.

It's currently about 64 to 1.

I'm not saying it should be at its historical 15 to 1 or even 35 to 1, but I consider its very 'modern' ratio to be approximately 50 to 1.

At this ratio (50 to 1) silver today should be at $22.60 an ounce.

So if you're buying silver today, I consider it still at a discount.