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iShares Silver Trust Message Board

  • livestrong1003 livestrong1003 Aug 17, 2013 11:13 AM Flag

    Silver has its best week in 5 years. Up 14%

    The most volatile of commodities posted a thumping 14 per cent gain last week, its best week in five years. Is this just a flash in the pan or is silver now set up for an autumnal price spike?

    Step back a little and consider the win-win position for precious metals. Silver is just a leveraged play on gold, also up by 4.5 per cent last week.

    Basically if the recovery scenario emerges on top this autumn then industrial demand for silver is going to be far more robust than anticipated by the price crash of April. If the US uptick makes it to the eurozone and UK and China stabilizes then silver is overdue for repricing as an industrial metal.

    Then again if the US recovery proves unsustainable in the face of rising interest rates then gold and silver will benefit as safe haven assets. That is what we saw last week with both the stock market and bond market selling off as precious metals rose.

    A third scenario has a global financial crash with more money printing and a rush to inflation-protection assets.

    It is always nice to be on the right side of a win-win situation as an investor. Hedge funds like to operate in this kind of niche. They’ve been the biggest drivers of the bear market for precious metals this year and will also be the biggest buyers now.

    Indeed in the past six weeks some 1,400 tonnes has been added to the silver exchange traded product SLV, a favored investment choice of the hedge funds. This is a convenient trading vehicle and it has to be admitted silver is a bit heavy in proportion to its value at the moment.

    Silver is a tight market and anybody short of the metal is going to have to scramble to cover their losses now.

    Price swings

    Sentiment: Strong Buy

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    • i love these headlines "best week" "worst week" LOL

      it's because sliver sold off 5 months straight so is due for a couple of up months. Too soon to say if this will pull back at 23 but if it makes it to 25 chances are it will mush higher. in meantime it is just another volatile trading vehicle for some of us and we banked profits Friday buying back the dips. and there WILL be dips.

      • 1 Reply to about_that_stock
      • The implications of silver going up 14% in 1 week are huge. It is not because it sold off for 5 months. You would expect only a small bounce back. 14% is a violent reversal, which will propel silver back to all time highs. That's the bigger picture. Demand is high and will increase. Silver is a giffen good. A phenomena that demand increases while the price goes up.

        Supply is down, JP Morgan cannot make delivery of silver on time, industrial demand is surging, and speculative interest has returned.

        This is just the infancy of major rally as the correction is over. Many will be amazed. Others will act and buy ahead of the run up. Demand will surge Shorts and suppliers will have to act quickly : )

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