Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Recent Volatility in Gold Silver and Metals is Nothing to Fear

Commodities / Gold and Silver 2010 Jun 15, 2010 - 06:46 PM GMT

By: Dr_Jeff_Lewis

Commodities

Recently, the metals markets have become far more volatile, often rising and falling upwards of three to four percentage points in just one day.  That volatility, however, is nothing you should fear.  In fact, it’s mostly due to the extreme attention being paid to the metals markets.


Silver More Important than Ever

Momentarily leaving aside what we know from the work of GATA and Ted Butler - namely that both gold and silver price discovery is predominately controlled by a few dominant (bullion bank) sellers – perhaps the most volatile in the metals markets is silver.

Despite owing much of its demand to industrial uses and photographic development, is still a prime target for anti-inflation investors.  As gold treads toward new heights and pushes the 70:1 ratio with gold's price, investors are looking to trade in their gold holdings for silver, realizing it has yet to reach its maximum price. 

Of course, this is easily reflected in daily volume and price changes, with silver rising and falling at different times and degrees than that of gold.  However, even more recently as gold as pushed upward, silver has followed, and in many times, silver has risen on days when gold has taken a sharp dip.

Embrace Volatility with Purchases

Even as silver heads to new highs, there is still no sign that investors should even contemplate an exit.  With silver at a 70:1 ratio with gold, one should expect at least a slight pullback in gold or an advance in silver prices, though gold appears to be stagnating temporarily while silver plays catch up.  The catch up advance in silver prices will take some time, and it will ultimately come in the form of ten steps up, eight back, ten steps up, eight back. 

This extreme volatility may be shunned upon by investors, most of whom are looking for a store of value, but what it actually does is allow for even more entry points as silver bottoms out on the silver to gold ratio.  Few times has silver touched the 70:1 value against gold, and every time it did, the price of silver rose significantly while gold stagnated.  If you believe history is an excellent indicator, and it should be, then there is no excuse not to be loading up on silver at today's relatively low prices to gold.

Start Shopping at $17

Physical silver's sister security is the exchange-traded fund SLV, which may not have all the same benefits of physical silver, but does give an accurate representation of what silver investors are doing in the other physical and futures markets.  At $17 on the exchange-traded fund, investors are buying hand over fist, whereas less than three months ago they were selling at that price.  Knowing this, we can establish that the short term floor on silver is at $17 on SLV, which works out to about $17.25 on the spot metals markets or roughly $18 in the physical markets. 

The Perfect Storm

With gold on a tear through $1250 and silver breaching the bottom of the historical silver to gold ratio, there has never been a better time to buy.   Silver's volatility should smooth as the metal closes the gap with gold with higher prices. 

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in