Best of the Week
Most Popular
1.Will UK Interest Rate Rises Crash House Prices? - Nadeem_Walayat
2.Full on Crash Alert for Major World Stock Markets... - Clive_Maund
3.Gold And Silver Market Bottoming? Big Rally Imminent? Reality Check Says NO - Michael_Noonan
4.The Coming Silver Price Rally Will Outperform All Previous Ones - Hubert_Moolman
5.The Trigger For The Upcoming Stock Crash - Harry_Dent
6.Imploding Department Store Results - James_Quinn
7.Dr. Copper is Speaking, are you Listening? ... - Rambus_Chartology
8.Pandemonium in the Stock Market, Dow falls 1,000 points in a week - EWI
9.Asia's Whirling Dervish of Devaluations Has Encircled China's Exports - Keith_Hilden
10.China Weakens the Yuan; Rattles Global Stock and Financial Markets - Gary_Dorsch
Last 5 days
OPEC Divorce And Self-Destruction Thanks To Saudi Crude Oil Strategy? - 1st Sept 15
The Beginning Of A New Financial / Stock Market Cycle - 1st Sept 15
Three Things Every Master Trader Knows About Trading Options - 1st Sept 15
Chinese Yuan Revolution? - 1st Sept 15
Take Advantage of Record-High Auto Sales… Before This Bubble Bursts - 1st Sept 15
Pondering Hitler's Legacy - 1st Sept 15
Mainstream Media Goes Berserk - 1st Sept 15
Your Decisive Stock Market Plan to Follow Whilst Most Investors Shiver With Fear - 1st Sept 15
Are There Stock and Financial Markets Investing Opportunities For The Remainder Of 2015 - 1st Sept 15
Crude Oil Price Forecast 2015 and 2016 - 1st Sept 15
REPO Window Hidden $Trillion QE Monthly Volume - 31st Aug 15
Silver and Warnings From Exponential Markets - 31st Aug 15
Stock Market Calls Fed’s Bluff - 31st Aug 15
Why Some ETFs Led the Stock Markets Down Last Week - 31st Aug 15
Stock Market Collapse - Take The Opportunity To Bail Before It’s Too Late! - 31st Aug 15
The Most Important Market Chart on The Planet - 31st Aug 15
Stock Market 50% Retracement - 31st Aug 15
Stock Market Crash Red Alert for 2nd Downwave... - 31st Aug 15
Independant Scotland 1 Year on, UK Civil War If the SNP Fanatics Had Succeeded - 30th Aug 15
Gold’s 7 Point Broadening Top - 30th Aug 15
The Day the Stock Market Shook the Earth: Takeaways From the Dow’s 1,000-Point Drop - 30th Aug 15
Gold Price Rally Marked by Short Covering - 30th Aug 15
Aging Stocks Bull Market - 29th Aug 15
Economic Destabilization, Financial Meltdown and the Rigging of the Shanghai Stock Market? - 29th Aug 15
The Stocks You Should Be Buying After the Market Drop - 29th Aug 15
How I Learned to Stop Worrying and Love Market Fluctuations - 28th Aug 15
China's Yuan Devaluation: Why It Was "Expected" - 28th Aug 15
Stocks Go Nuts But the Question Remains – Will the Rally Stick? - 28th Aug 15
Fed’s Stock Market Levitation is Failing - 28th Aug 15
The Eight Energy Systems Driving The Stock Market Rout - 28th Aug 15
Silver Sold, then Squeezed - 28th Aug 15
U.S. Economic Fundamentals 'Look Good' - Bullard of St. Louis Fed - 28th Aug 15
Stock Market Margin Calls Mount - 28th Aug 15
Einstein, Physics, Gold and The Formula To End Economic Decay - 28th Aug 15
The 10 Best Stocks for Options Trading Plays in This Market - 28th Aug 15
Economics of a Stock Market Crash - 28th Aug 15
Currency Wars Detonate; Gold Refuses to Budge - 28th Aug 15
UK Immigration Crisis Hits New Record, Trending Towards Becoming a Catastrophe - 28th Aug 15
The Ultimate Cash-Management Guide - 27th Aug 15
Why a Fed Rate Hike Could Be a Blessing for Gold Prices - 27th Aug 15
Why Devaluing the Yuan Won't Help China's Economy - 27th Aug 15
Stock Market Trend & Trade Signal Of the Decade - 27th Aug 15
Keep Your Eye On the Gold and Silver Bear - 27th Aug 15
Refugees Expose Europe’s Lack Of Decency - 27th Aug 15
How to Profit from China's Currency War - 27th Aug 15
How China's Currency Policies Will Change the World - 27th Aug 15
Chinese Medicine not Impressing Dr Copper - 27th Aug 15
Novel Biotech Novel Technology Platforms with Dramatic Growth Potential - 27th Aug 15
China Stocks Bear Market Crash, Are We Near the Bottom Yet? - 27th Aug 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Stocks Slide

The Next Time Silver Crosses Above $30.00 Will Be The Last Time

Commodities / Gold and Silver 2012 Jul 06, 2012 - 05:41 AM GMT

By: Bob_Kirtley

Commodities Best Financial Markets Analysis ArticleIt has been an interesting week on the economic stimulus front with what looks like a co-ordinated effort by the major powers to ignite their respective economies.

The European Central Bank (ECB) made the headlines with a widely anticipated cut to its key interest rate of a quarter of a percentage point to a record low 0.75 per cent in an attempt to ease Europe's financial crisis and boost its stagnating economy. This move by the ECB will make it cheaper for people and the business community to borrow and ultimately spend this cheap cash.


Next up to the plate was The Bank of England (BoE) chipping in with STG50 billion or US$77.62 as part of its Quantitative Easing stimulus package to boost Britain's recession-torn economy. The BoE also decided to keep its main interest rate at a record low of 0.50 per cent after a two-day monetary policy meeting.

Then we have The People’s Bank of China who decided to cut its benchmark lending rate by 31 basis points to 6.0 per cent.

Now we wait patiently for the next shoe to drop, which belongs to the United States. This Friday another set of Non Farm Payroll (NFP) will be announced with the hope that they are somewhere north of 120,000 jobs. However, should this figure come in at sub 120,000 then the heat is back on the Fed to take action. If this figure is as low as 60,000, then Chairman Ben Bernanke will be required to move and move quickly. Our own opinion is that it will be a low number and therefore some form of QE3 will make an appearance albeit in drag if necessary. Any indication that QE3 is on the cards will ignite gold prices with a subsequent knock on effect lifting silver prices as the demand for both of these precious metals gains traction.

All of the above represents a policy of cheaper money and more money, which is inflationary through the continuing debasement of our spending power. The lack of confidence in fiat currencies still exists despite the short term rally in the US dollar.

You may recall the last time we updated the silver chart we said: “that silver could go as low $26.00, so acquire gently.” That level is holding for now as the chart shows and the longer this sideways action continues, the bigger the move will be when it comes. Also note that the RSI has dipped below the '30' level and that silver prices did rise, but not in a convincing fashion, the 'tease' for silver bugs continues. However, rather like a bouncing ball the oscillations are getting smaller with every bounce. The trading range is narrowing and in the near term silver prices will break out of this range and move almost violently to new ground. As we see it the odds are skewed towards an increase in silver prices rather then a fall and once they do catch fire it will be dramatic. The regulators may well move to limit the rate of change that occurs, however, once through the $30.00/oz level the ensuing pullbacks, real or manipulated will not bring the price back to this level again.

To conclude we politely suggest that you accumulate as and when you can and that you do not sell any of your physical silver bars or coins, you might be just offering someone else a real bargain. As for the stocks we remain skeptical about their ability to perform, its not happening for them at the moment and we need to see some signs of investor interest in the producers before we decide to increase our exposure to them. At the same time we are not selling any of our silver producers as we purchased them early in this bull market and they owe us nothing.

Now for those of you who are adrenalin junkies you may want to consider allocating some of your funds to a few well thought out options trades. As we see it options are the only vehicle offering leverage to the underlying movement of silver prices. You will need to be highly selective, totally focused and disciplined. Once you have made a purchase the clock is working against you and Theta is your enemy as the time premium erodes with each passing day. Options do not fit a 'buy and hold' strategy its a buy, wait until your target has been achieved and sell regardless of how much further you think that they may have to run.

So if we have stimulated your interest drop by and see us some time.

We hope that you all had a very good Thanks Giving break, however, its behind us now so get your game face on, the second half promises to be explosive, one way or another. 

Bob Kirtley
Email:bob@gold-prices.biz
URL: www.silver-prices.net
URL: www.skoptionstrading.com

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 200

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

© 2005-2015 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

Biggest Debt Bomb in History