Bloomberg: "Silver May Drop 20% as Coins Signal ‘Crowd’: Technical Analysis"
Goldbully
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Silver May Drop 20% as Coins Signal ‘Crowd’: Technical Analysis
January 20, 2011, 12:07 AM EST
By Pham-Duy Nguyen
Jan. 20 (Bloomberg) -- Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.
Sales of 1-ounce American Eagle silver coins have totaled 4,588,000 in January, heading for a record, according to data from the U.S. Mint. Silver futures in New York rallied 84 percent last year, climbing to a 30-year high of $31.275 an ounce on Jan. 3, as investors sought a haven against financial turmoil.
“The coin sales are an indication of the level of interest in silver,” said James, who oversees $2.4 billion in Xenia, Ohio. “It’s too popular. When the crowd discovers a good deal, it’s usually long over.”
Prices have more than doubled in two years as investors bought precious metals to protect against a weakening U.S dollar and Europe’s financial crisis. Holdings in exchange-traded products backed by silver have dropped 1.6 percent since touching a record in mid-December. The metal tumbled 24 percent in 2008 after gaining for seven straight years.
“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”
Link
January 20, 2011, 12:07 AM EST
By Pham-Duy Nguyen
Jan. 20 (Bloomberg) -- Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.
Sales of 1-ounce American Eagle silver coins have totaled 4,588,000 in January, heading for a record, according to data from the U.S. Mint. Silver futures in New York rallied 84 percent last year, climbing to a 30-year high of $31.275 an ounce on Jan. 3, as investors sought a haven against financial turmoil.
“The coin sales are an indication of the level of interest in silver,” said James, who oversees $2.4 billion in Xenia, Ohio. “It’s too popular. When the crowd discovers a good deal, it’s usually long over.”
Prices have more than doubled in two years as investors bought precious metals to protect against a weakening U.S dollar and Europe’s financial crisis. Holdings in exchange-traded products backed by silver have dropped 1.6 percent since touching a record in mid-December. The metal tumbled 24 percent in 2008 after gaining for seven straight years.
“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”
Link
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Comments
Knowledge is the enemy of fear
<< <i>Silver regularly has 30+% drops and typically it has at least one 20% drop every year. >>
Yeppers
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>I am just curious, that article says silver fell 24% in 2008, but as I recall it fell from about $22 down to $9....how is that 24%? >>
Because he's a "technical analyst" and not a mathematician.
2011 SAE - 50 Million MORE Ounces tucked away from industry
Got Solar
Loves me some shiny!
Silver is in short supply. Thus the more we need to use,
the lower the price of silver should drop. Makes sense to me.
Camelot
<< <i>I'm still trying to figure out why this huge demand is going to cause the price to fall.........
Manipulated market?
Every now and then the manipulators need to take their profits and let the "shoe clerks" take the losses.
Um, if silver is a crowded trade, what does that make Treasuries?
I knew it would happen.
paper prices that is
<< <i>Silver May Drop 20% as Coins Signal ‘Crowd’: Technical Analysis
January 20, 2011, 12:07 AM EST
By Pham-Duy Nguyen
Jan. 20 (Bloomberg) -- Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.
Sales of 1-ounce American Eagle silver coins have totaled 4,588,000 in January, heading for a record, according to data from the U.S. Mint. Silver futures in New York rallied 84 percent last year, climbing to a 30-year high of $31.275 an ounce on Jan. 3, as investors sought a haven against financial turmoil.
“The coin sales are an indication of the level of interest in silver,” said James, who oversees $2.4 billion in Xenia, Ohio. “It’s too popular. When the crowd discovers a good deal, it’s usually long over.”
Prices have more than doubled in two years as investors bought precious metals to protect against a weakening U.S dollar and Europe’s financial crisis. Holdings in exchange-traded products backed by silver have dropped 1.6 percent since touching a record in mid-December. The metal tumbled 24 percent in 2008 after gaining for seven straight years.
“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”
Link >>
The man is mad.
That's only 55 million a year or 1.8 billion dollars at todays prices.
That's $6 per American per year!!!! And sales of 55,000,000 would remove a large percentage of available silver from the market.
I don't think the magnitude of the potential move is really very widely appreciated.
The average Chinesse makes $3 a week and saves much of it. The Chinese government
is encouraging them to buy silver and gold. With so little money per individual it's prob-
able most would go into silver. $50 per year savings for 1.2 billion Chinese would be about
30 times the amount being bought in eagles and is greater than the total amount of avail-
able silver.
He should crunch these numbers.
Maybe China is just the first company engaging in a silver buying panic and the govern-
ment is seeking the assistance of their population to secure metal.