Posted on 09/23/2011 8:30:42 AM PDT by mamelukesabre
What the heck is going on with the price of silver the last 3 days? Anyone know why its dropping like that? Seems to me with all the turmoil in europe, silver and gold should both be spiking.
buying opportunity
Commodities prices are ALWAYS manipulated. The small investor has no clue how this works.
This morning the pundit on 650 KFI says because Europe and Asia are fleeing to US dollars as a safe investment!
I’m just going to say that, for me personally, the only thing I want to invest in at this particular time is non-perishable food, seeds, and ammo.
I can’t eat gold or silver, and I can’t effectively defend myself with either.
Something wicked this way comes.
What I hear is commodities are down because no QE3 yet - I also hear to expect a lot of price swings.
Funny thing about no QE3 - the lower gas and commodity prices are more of a stimulus to the common ppl than that QE3 crap.
Market moves can be explained as being a result of fear, or greed, or a combination of both.
http://www.businessinsider.com/chf-vs-gold-vs-ust-vs-jpy-2011-9
“Why Half Of The World’s “Safe Havens” Recently Collapsed”
Strange how silver never goes up 3-4 dollars in one day.
The dollar is rising due to “flight to safety” from Europe. Yes, we’re in bad shape, but they’re worse. There’s also a firesale element going on, selling to generate cash for other obligations, margin calls, etcetera.
Now, when precious metals and the dollar go up in tandem, that’s the really strange circumstance. Precious metals falling as the dollar rises is just par for the course.
If the underlying factors that drove silver to $41
and gold over $1950 have not been resolved (and they have not), metals will be back
I say weather the volatility and buy on the dips, and I saw today as a dip
Investing in gold or silver for speculation’s sake isn’t something the average investor should attempt because there are too many capital-backed meddlers that do nothing but scheme how to make millions on a slight shift of the gold/silver price.
If, by chance, one invests in gold/silver purely for the SHTF situation, the value will be true in the end. However, the same could be said for brass, lead and copper (ammunition) as well as other tradable commodities, but one has to be able to protect their stash..
It's easy.
Those who benefited from your purchase of these metals told a big lie. That lie was hyper-inflation.
Hyper-inflation is not in our near future.
Debt deflation is dominant and ongoing. It HAS to be.
The worlds' central banks cannot invent enough money...and push it into the economy...to overcome the losses. There just too much debt.
Look for gold at $1200 or below by the end of the year. Under $1000 within a year.
I’ve been watching too, but I think that it’s important to maintain a proper perspective on the prices of commodoties and gold and silver in particular.
First, the prices of both are manipulated by a number of factors, some seen, some unseen. Changes in margin calls, etc. are some that are seen. Manipulation ala JP Morgan, are not always seen. Changes in ETF’s are another.
But, when all is said and done, you have to remember that neither gold nor silver are inherently (necessary for life like say food, energy, shelter) worth anything. Nothing, zip, zilch, nada. The only thing that defines their worth is demand, in the case of silver, it’s largely industrial/technological, and in the case of gold, it’s for the idea of wealth preservation.
That having been said, you have to understand what’s going on. To some extent, people are panicking, but not everyone panics the the same. Not everyone is panicking. So the assumption that just because Europe is having a problem, doesn’t mean people are buying gold and silver. Sure, some are. Others are switching to cash for other purposes. Others may be buying supplies and hedging what they think will come. Others are day traders looking for where they think they can make the most money. These are all factors that are not necessarilly quantifiable. Remember if silver can run up $10 in a day (for example), it can drop $10 in a day. Also, remember that most people have a herd mentality, I am confident that many people seeing the drop yesterday, and the initial drops today, are therefore attempting to unload their PM’s quickly.
Fluctuations in PM’s are not a surprise. They are also unpredictable. The perceived value drives demand (less so in silver, as it’s manufacuring applications add a real world demand). Those who are using it as a method of wealth preservation are in it for the long haul. The day to day minutia doesn’t matter to them, because the fundamentals of the economic situation remain the same. Those who are trying to make a quick buck are not going to respond in the same ways, so there’s no point in trying to explain all of their reactions.
If you want silver, buy on the lows. If you want to trade silver, buy on the lows, sell on the highs. I don’t advocate trying to predict something so volatile, but you don’t have t be an oracle to capitalize. I hope that helps.
1: ANY holder of ANY commodity unprepared for an “any time” 20% price collapse is naive.
2: The main driver you are seeing is forced margin liquidation. Earlier this year when silver was flirting with $50, atop a parabolic price ramp, the CME raised margin requirements for holding SI contracts 8 times. This made the contracts more expensive to hold (or, to be short) and many longs and shorts were forced to sell out their positions. What you see now is the effect of margin calls on stocks forcing silver longs to sell their positions, in exactly the same way. Under margin pressure, it is well known that people sell what they can, not what they would like to. And this has a spiraling effect because it forces even much-less-leveraged silver longs to sell.
3: The collapse in the Euro and the tremendous uncertainty on that side of the pond has people fleeing into the USD. Since PMs are denominated in dollars, the strengthening USD causes apparent pricing of Ag and Au to fall.
4: Silver is NOT a monetary metal. You may think that it is, you may read articles and watch YouTube videos that say it is, you may hope that it someday may become so, you may belong to a cult that prays that it will someday be so, but it isn’t.
“Commodities prices are ALWAYS manipulated. The small investor has no clue how this works.”
You sir! (or ma’am, I didn’t check the profile), are correct. There is a certain element of the population that always has, and always will use gold and silver as money. And manipulation of money is something to which certain elements of the population devote all of their time and resources.
Tightening the Noose: France Bans Cash Sales of Gold/Silver over $600 - Strange how the price matches the previous US 1099 reporting requirements.
Bubbles bursting.
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