The epic rise in Silver Bullion over the past year and a half has largely been uninterrupted. That is usually a warning sign for anyone with a brain at least the size of a tangerine. As silver crept up on is historical high of $50.25 USD/oz, it look liked new highs were going to be created. Before the $50 mark was reached however, the bottom fell out, and prices have subsequently declined 25% over the last 4 trading sessions. Sure, new margin requirements set by COMEX played a huge factor in the decline, but any chartist could spot the reverse Japanese candle stick formations, and the tops blowing off. Many investor's have been calling me eager to buy weakness in the metal, but the reality is the declines are likely continue in the short term. I will be adding to my physical position if I see anything below $28 USD/oz, hopefully by then my broken will lighten up on those hefty commissions he's been charges for delivery.
I wouldn't be buying silver at these levels unless I was a jeweler or a dentist. If you want to trade the metal, you would have to be incredibly nimble, and mildly suicidal. The money was made on the way up and on the way down, going forward it's going to be incredibly choppy. Long-term however, the fundamentals are still in tact, but I could be dead in 20 years so what good is that? I will discuss reserve, production, circulation, and pricing ratios going forward and how you can use them to spot opportunities in the market places as they arise.
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