Everybody including the horses they rode in on are now banking on a decline in silver prices. Based on what? Apparently the ever developing demise of the Euro situation spells only one direction for PM's...down to very down. Sure, we have seen that trend for the past couple of weeks but nothing is etched in stone.
Contrarian investing still retains some viability in this current environment. If most commentators are forecasting an equity and commodity collaps with a Greek default, contrarians should be loading up. So while I sit with my silver eagles piled up before me, am I supposed to wonder what Slovakia's vote on ESFS will do to the value of my holdings? Somebody pinch me and wake me up. The tsunami wave washing over the Euro zone will not be allayed by one small country's vote, one way or another. And the Euro zones eventual decision to engage in creative financing to temporarily halt the collapse of their sovereign debts will not negatively impact the upward rise of PM's.
Something tells me silver and gold may take flight like a bat out of hell before things are resolved in the developed world's banking systems. Heads of state like Merkel and Sarkozy cannot simply formulate "a plan" that will cure what ails the financially strapped PIGGS. Governments do not produce anything of value. And heads of state can plan all they want but their dreams will not produce any meaningful results either.
The declines heading for the world's developed economies may provide some head winds for PM's. PM's may experience some indigestion in the short term along with equity markets. But government manipulations of respective economies can do only one thing for real currency (gold and silver) and that is real money will rise above all fiat currencies. Consequently, hang onto your PM investments and ignore the noise of the currency and bond cheerleaders.
Well written post. There are many players who are trying to watch out for their best interests. The problem is that within Europe they do not know what their best interests are. To engage in creative financing should be possible. I can think of several ways, but too many people and banks are playing the situation long and short. There are several term long bond holders of the EURO on Wall Street. There are currency players including banks that are pushing hard against several pairs. Some investor's have a break target for the EURO and the US dollar. It does not work like that. The EURO is larger than the US dollar, but all it takes is one small match to start a fire. I am watching 6 currency pairs and everyone who trades should be watching them too and understand what pair movements will be changing partners. That is not difficult. Knowing how to win at every game with currencies is. I do not win every time trading currencies, but it really helps to know this stuff if trading PMs. I posted about the FX earlier tonight or now yesterday. Everyone who trades PMs needs to read that article. 40% who take CERTs exams in currencies fail. Most studied for years and have other degrees and CERTs. We live in a world of greed with a lot of mean investing people. To me, the meaner that they are, the less that they know. Some powerful investors and some with just a little cash will make money if Europe fails.
Here is part 1 of the DFX. Price Channels: How to Trade with Price Channels
Tuesday October 11, 2011, 5:59 pm EDT Identifying Breakout Opportunities
Price Channels: How to Trade with Price Channels
When Price Channels are placed on a chart, they identify the high and the low price at which the pair traded over a specified period of time. The Channels on the Daily chart below are set to 20 periods so they represent the high and the low at which the pair traded over the previous 20 days.
As such, they can be used quite effectively to visually identify levels of Support and Resistance on a chart. Also, the channels are often used by “breakout” traders to identify entry levels.