Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
Why Surging UK Household Debt Will Cause The Next Crisis - 27th Jul 17
Reconciling the US Dollar Outlook with the Super Bullish Gold and Silver COTs - 26th Jul 17
Last Week’s Rally in Gold Stocks Erased - 26th Jul 17
Dollar, Bitcoin, Markets - Is There A New Flight To Safety? - 26th Jul 17
Central Banks ARE The Crisis - 26th Jul 17
Iran: Public Image Versus Historical Reality - Part 1: An Abridged History to the 20th Century - 26th Jul 17
Trump Fails To Understand One Critical Thing—Our Trade Partners Have Options, Too - 26th Jul 17
Stock Market and Gold Stocks Trend Forecast Update - 25th Jul 17
Saving Illinois: Getting More Bang for Its Bucks - 24th Jul 17
3 Stocks Sectors That Will Win in The Fed’s Great Balance-Sheet Unwind - 24th Jul 17
Activist Investors Are Taking Over Wall Street, Procter and Gamble Might Never Remain the Same - 24th Jul 17
Stock Market Still on Track - 24th Jul 17
Last Chance For US Dollar To Rally - 24th Jul 17
UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - 22nd Jul 17
Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts - 22nd Jul 17
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17

Market Oracle FREE Newsletter

Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts

Silver Demand - Money Versus Commodity

Commodities / Gold and Silver 2012 Nov 06, 2012 - 02:14 AM GMT

By: Dr_Jeff_Lewis

Commodities

The silver market often seems to be like burning both ends of a candle at the same time. Basically, somewhere in the middle the two flames are bound to meet and cause an explosion in price.

Many long term precious metal investors have wondered whether silver is just another commodity component of the CCI, or if it will eventually reassert itself as money?


In many ways, silver still behaves like any other commodity market that trades largely based on technical indicators, signals and chart patterns. In large part, this appearance is maintained by the market makers, who are the big bullion banks dominated by J.P. Morgan Chase.

At the Mercy of the CFTC, CME and the CCI

Currently holding above support noted at $31.50, the COT structure remains bearish for silver. Although Open Interest fell somewhat during the recent downside correction, a lot of speculative longs remain in the Chicago silver futures market.

Meanwhile, less and less physical metal is available to investors to purchase as it gets buried underneath a huge mountain of paper derivatives. The silver mining sector remains weak and is also at the mercy of the big commercial banks upon which miners depend heavily for their financing.

On the other hand, the macro economy remains fragile in the United States. Despite the looming U.S. elections, the major issue involves the country’s ability to continue servicing existing and ongoing fiscal and sovereign debt, which can only be maintained with more currency debasement.

The half-life for the impact of this impending currency and debt crisis is becoming less and less, witness Japan very recently, as well as the Brazil and China’s record reverse bond purchase agreement.

Silver’s Crisis Value Underestimated

Although the physical silver markets remain strong, they seem nowhere near the point where fear drives demand from a monetary standpoint. Even within the Gold Bug community, silver continues to be shrugged off and often ridiculed when considered as an alternative wealth reserve asset to gold.

Interestingly, central banks are net buyers of gold once again. Of course, they could not be net buyers of silver, simply because there is nowhere close to enough physical silver left at anything less than a four digit price.

With all of this happening in the background, the only thing close to matching this type of demand from an industrial standpoint is a user panic, which is a very real and also overlooked possibility that is rarely factored into a silver price analysis.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit www.silver-coin-investor.com

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 © 2012 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.


© 2005-2017 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

Catching a Falling Financial Knife