With Silvers Wild Volatility Lately, it Means One of Two Things....

dragon

It means this is either a mid to long term market top, or that silver is poised to go much higher.


Which do you think?

derryb

Silver is always volatile. That's why there is money to be made trading the paper. Profit on the way up, profit on the way down. Stack the hard stuff on the dips for the long haul. Trade the paper for ins and outs. I like AGQ (double long) and ZSL (double short).

Long term outlook remains extremely bullish due to industrial as well as investment demand in the face of supply issues. It's a no brainer for the smart investor.

TheTalkingWalnut

I don't know. But I read a lot of stuff on the internet and sometimes my BS filter isn't as good as it should be.

Can someone who knows more than I do tell me if there's any validity to claims I am reading that COMEX is running out of physical silver and to replace that will certainly cause a price runup? I would love for that to be true, but I have no idea if this is an urban legend or if it has some basis in reality?

derryb

COMEX sells more silver on paper than they have in the vault. The only threat to this dangerous game is the conversion of their paper to physical by investors. There have been reports of COMEX not being able to meet these conversion requests with COMEX offering a cash premium to stay in paper or having to take up to 30 days to meet delivery. As more and more investors seek the "hard" stuff, COMEX will eventually get caught with its pants down.

A massive, publicized failure for any of the paper dealers to meet physical delivery demand will put a quick, downward spiral on paper silver prices and will so affect the spot price. This will have a very short term negative affect on the price of physical and will create a golden buying opportunity that will quickly disappear as everyone moves from paper to silver. ETF SIL investors will beat down the door to get out of SIL. As one of the largest vehicles for trading paper silver, the quick crash will affect all silver prices. Be ready to back up the truck if this happens.

jdimmick

I just dont see this shortage of physical silver everyone is talking about, work at a local B & M and see how much comes in the dooor. You would be amazed!

roadrunner

<< <i>COMEX sells more silver on paper than they have in the vault. The only threat to this dangerous game is the conversion of their paper to physical by investors. There have been reports of COMEX not being able to meet these conversion requests with COMEX offering a cash premium to stay in paper or having to take up to 30 days to meet delivery. As more and more investors seek the "hard" stuff, COMEX will eventually get caught with its pants down.

A massive, publicized failure for any of the paper dealers to meet physical delivery demand will put a quick, downward spiral on paper silver prices and will so affect the spot price. This will have a very short term negative affect on the price of physical and will create a golden buying opportunity that will quickly disappear as everyone moves from paper to silver. ETF SIL investors will beat down the door to get out of SIL. As one of the largest vehicles for trading paper silver, the quick crash will affect all silver prices. Be ready to back up the truck if this happens. >>



The Comex inventory has been steadily drawn down >25% over the past 3 yrs. The current 102 MILL ounces is split between customer (60) and dealer (42) inventory. The total inventory is worth only around $3 BILL or less than one day's cost to run the entire US govt. Rumors are out there that large/coordinated buyers are now looking for silver by raiding the ETF's such as SLV. In a liquidity squeeze, SLV would probably get hit. But SIL is a basket of silver miners with reserves/resources in the ground. SIL might actually run up in price on such a squeeze because absent of physical above ground silver to buy, the next step would be indentified underground reserves. The local US B&M coin shop finds itself in a situation that is not found in the rest of the world (ie where silver is thought of as money as well as something to be saved, not squandered). So I'm not surprised that there's still plenty of silver showing up to be purchased. But a lot of that silver is being made into 100-1000 oz bars to be delivered to investors home and abroad.

Article on silver along with Comex silver inventory chart

roadrunner

mhammerman

Another interesting piece of the argument is the current GSR. Historic GSR charts from 1mo-36 yrs back For What it's worth. I would like to make some observations but with all the super chartists here, I will just take this opportunity to learn from comments, if any. There should be an abundance of clues here that would lead us out of the woods.

Steve27

As long as it doesn't mean six more weeks of winter, I don't care. Predicting the direction of silver is harder than predicting the weather.