Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24
Banxe Reviews: Revolutionising Financial Transactions with Innovative Solutions - 3rd May 24
MRNA - The beginning of the end of cancer? - 3rd May 24
The Future of Gaming: What's Coming Next? - 3rd May 24
What is A Split Capital Investment Trust? - 3rd May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Finding Silver's Bottom!

Commodities / Gold and Silver 2011 Oct 08, 2011 - 11:35 AM GMT

By: Bob_Kirtley


Silver prices appear to have found a bottom at the $30.00 level, however, we are looking at a very short time period and such micro analysis can make monkeys out of us. A few months ago silver prices looked to have bottomed at the $34.00 level, but the ensuing rally was short lived and once again silver got clobbered. From a technical standpoint we can see that the RSI is now trending north and from a low level too, which gives it the room to move a little higher from this point and we view it as a positive indication. The MACD is also well and truly in the oversold zone and about to form a crossover which will be another positive indication of where silver prices are going next.

However, technical analysis has its limitations and any number of factors can come into play and clobber silver once again. As we see it, those who hold the short positions have a vested interest in seeing the prices go lower. The counter argument is that the same applies to the silver bulls, but those bulls who have understood the gold and silver story and the need for ownership have already established a position and may not have the cash to increase their stake, no matter how desirous this may be. To maintain and even boost prices from here we need new blood to enter the market and implement their own acquisition programme. This we think will happen as more people recognize the mess we are in economically and politically, resulting in the quick fix, print money, head in the sand policies that are about as useful as a chocolate fire guard. As the penny drops that they need an alternative to paper money they will make the move, alas, with very little thought and they will no doubt pay over the top to get their hands on the physical silver. As an example, in the last gold bull mania period some of the staff in our office went out and bought fine, exquisitely crafted jewelry, works of art really. The point is though, that when looking for exposure to silver prices you need to acquire silver bars and coins. Works of art are for those experts who thoroughly understand the art business, a totally different market altogether.

Back to the fundamentals, the jobs figures out of the US last night were better than expected when the world's largest economy added 103,000 jobs last month, according to non-farm payrolls report, which has eased recession concerns, but for how long. The outlook is still gloomy so we would expect the next FOMC meeting, scheduled for the 2nd November to come up with some form of QE3.

Over in Eurozone both Spain and Italy have been down graded, why it has taken so long is a puzzle to us, as along with many other countries their paper is bordering worthlessness. And Germany must be questioning the wisdom of committing more and more of their finances to the lame duck, bottomless pit basket cases, that have their hands firmly held out, whilst rebelling against every austerity measure that gets proposed. Nope, it doesn't look too clever out there.

In conclusion, we are not selling any of holdings of the physical metals. We are watching the mining sector for possible bargain buying opportunities, but remain skeptical about their ability to generate returns that match the risk of such investments. Volatility remains the order of the day, and the third string to our bow is options trading, where volatility can be used to our advantage. Beyond this we have nothing else to add as we don't touch the general stocks, rightly or wrongly and we don't see us doing so for some time yet.

That's it from us so have a sparking weekend.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.
Bob Kirtley Archive

© 2005-2022 - 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