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Silver fever is about to break, and break badly (Buying opportunity as mania subsides)
Marketwatch ^ | 04/29/2011 | Howard Gold, No Nonsense Investing

Posted on 04/29/2011 6:35:44 AM PDT by SeekAndFind

I was just starting to work on a column about silver mania Tuesday morning when a big, beautifully produced ad insert on silver, of all things, arrived with my Financial Times.

Proclaiming that “silver is the single greatest profit opportunity of our time,” the insert featured a huge, nearly three-dimensional replica of a one-ounce U.S. silver eagle, with Liberty herself reaching out her hand and In God We Trust right there for all to see.

The coin replica, some 3 ½ inches in diameter, shone like a harvest moon, glittering with the possibility of instant riches.

And — you just can’t make this stuff up — it came just a day after silver prices hit their highest level in three decades.

On Monday, silver closed near $50 an ounce, just below where it stood when the Hunt brothers tried to corner the market back in 1980 (although it’s way below that record when prices are adjusted for inflation). On Thursday, it briefly touched a record high at $49.52 an ounce before falling back. Gold extends record run, silver gains 3.4%.

Of course it was a coincidence — the ad, by a Minneapolis coin dealer, was three months in the making, I was told — but it perfectly captured the moment when silver moved into the full-fledged mania stage.

It’s happened with lightning speed. Last summer, before the most recent market rally began after Federal Reserve chairman Ben Bernanke announced a new round of quantitative easing (QE2), silver was still gold’s poor cousin, trading below $20 an ounce .

Since then, it has rocketed more than 150%, and has soared 50% in 2011 alone. Gold, meanwhile, has plodded along with the stodgy old Standard & Poor’s 500 index this year, though it’s up nicely from last year’s lows, too.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: bubble; mania; price; silver
Silver's "almost vertical ascent" is just one of many signals suggesting the metal's rally is reaching a top, says Richard Ross, chief technical strategist at Auerbach Grayson. Gold, or better yet, copper, offer better value
1 posted on 04/29/2011 6:35:49 AM PDT by SeekAndFind
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To: SeekAndFind

http://freeserv.dukascopy.com/chart/?stock_id=333&stock_id=333&interval=60&points_number=70&view_type=candle&width=400&height=300&show_labels=true&osc_type=-1&rfi=false&height=300&p1=2&p2=3&p3=7&c=56336&detach=true&copyr=true&refcode=f7b7670f370a372053ad22dff3d277a9e7fc3821f380873917c828f376bc16ad7670757682366b722f816d


2 posted on 04/29/2011 6:41:14 AM PDT by Gadsden1st
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To: SeekAndFind

I saw a few articles on Silver’s “Black Swan” moment. Most of them point to the $50 range before the break. I have a gut feeling, nothing more, that Silver will hit $60 before dipping again, fueled by new investors looking for a safe haven.


3 posted on 04/29/2011 6:41:33 AM PDT by TheWriterTX (Buy Ammo Often)
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To: TheWriterTX

I say hold on to your silver. You may need it in the long run to live on.


4 posted on 04/29/2011 6:43:35 AM PDT by WVNan
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To: Gadsden1st

Silver, the poor man’s gold.


5 posted on 04/29/2011 6:44:04 AM PDT by Gadsden1st
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To: Gadsden1st

Silver has its place.

In a worst-case scenario, I wouldn’t want to barter with gold coins.


6 posted on 04/29/2011 6:46:41 AM PDT by ConservativeWarrior (In last year's nests, there are no birds this year.)
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To: TheWriterTX

200% gains over the last two years, with 10-20% dips along the way forms a healthy chart with lots of room to rise.
As I have posted on other threads this week, this uptrend is just getting started. Physical metals should be 20-40% of one’s portfolio IMO, not 5-10% as many managers suggest.


7 posted on 04/29/2011 6:47:56 AM PDT by Fireone (Liberals are just overschooled, undereducated, adult children.)
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To: SeekAndFind
And for an alternate view...

http://www.zerohedge.com/article/goldcore-questions-comex-silver-default-due-secret-buing-russian-billionaire-chinese-traders

Not exactly a glut of silver out there...
Comex Silver Inventory Data


8 posted on 04/29/2011 6:48:32 AM PDT by HangnJudge
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To: SeekAndFind

Just buy the dips and take physical delivery.


9 posted on 04/29/2011 6:51:24 AM PDT by NeoCaveman
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To: SeekAndFind

Whew!
The “can’t lose” purchase of $14 Silver I made in 1980, based on the Hunt brothers large buy at that price, FINALLY is in a profit position....

30 years later, YOU can make a “can’t lose” purchase at $50!


10 posted on 04/29/2011 6:51:39 AM PDT by G Larry
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To: SeekAndFind

Whew!
The “can’t lose” purchase of $14 Silver I made in 1980, based on the Hunt brothers large buy at that price, FINALLY is in a profit position....

30 years later, YOU can make a “can’t lose” purchase at $50!


11 posted on 04/29/2011 6:51:49 AM PDT by G Larry
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To: G Larry

Almost anyone waiting to sell at 50 to get back to even (less inflation) is probably dead.

Investing is still an old man’s game and it was so much more so 30 years ago.


12 posted on 04/29/2011 6:53:24 AM PDT by NeoCaveman
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To: SeekAndFind

The last time the Silver market broke, it wasn’t pretty.


13 posted on 04/29/2011 6:56:33 AM PDT by AU72
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To: NeoCaveman

I’m 57....NOT “nearly dead”....

I bought at 14, but failed to sell at 50.

I’m teasing those NOW buying at 50, expecting $250.

I’m still holding, but wouldn’t buy here.


14 posted on 04/29/2011 6:58:08 AM PDT by G Larry
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To: G Larry

I think the current pricing in commodities is a result not so much as being based on the underlying value, as it is based on the fact there there has been literally hundreds of trillions of “dollars” in fiat money created. (not just “dollars”, you know what I mean).

A simple couple ticks up or down on the Stock market in one day exceed the whole worlds gold and silver traded in that day.

There is vastly more “dollars” traded daily in oil and coffee than gold and silver.


15 posted on 04/29/2011 7:05:34 AM PDT by djf (Dems and liberals: Let's redefine "marriage". We already redefined "natural born citizen".)
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To: G Larry

Sorry. Didn’t mean you personally.

You were pretty cool buying silver at the age of 27, I recon the average buyer was probably somewhere between 50 and 55.


16 posted on 04/29/2011 7:05:51 AM PDT by NeoCaveman
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To: SeekAndFind

Where was this guy when silver was bucks an ounce? When I see the budget balanced and the end of quantitative easing to infinity I will believe the metals are going down. For the past year every so called correction has been very brief and shallow. Silver’s price increase is a vote against the greenback. Till real rates are above the 10 percent inflation rates the metals will continue to go near parabolic. When we get to hyperinflation all bets are off. Silver and gold will become money again. The only Money that will be trusted and accepted.


17 posted on 04/29/2011 7:06:56 AM PDT by appeal2 (Don't steal, the government hates competition.)
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To: appeal2

RE: When we get to hyperinflation all bets are off. Silver and gold will become money again


You use the word — “When” as if this is a certainty...
Why didn’t you use the word “If” instead?


18 posted on 04/29/2011 7:12:40 AM PDT by SeekAndFind
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To: SeekAndFind

Looks like the Silver shorts are getting nervous, their propaganda team in the financial media is out in full force.


19 posted on 04/29/2011 7:30:40 AM PDT by ScottfromNJ
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To: Fireone

I agree absolutely. My dad bought a significant amount of gold and silver in the late 50’s and early 60’s. I inherited it when he died and other than to sell a few coins back in my college days to stay in school, I still have it. Dozens of times in my life I could have sold at a substantial profit. I chose not to, and will pass this cashe on to my nephews, who I suspect will have dozens of times in their lives when they can sell but will decide not to unless the SHTF. Gold and silver should not be viewed as get rich quick investments. They are insurance in case the world as we know it comes to an end. If you are buying for that reason, day to day fluctuation in prices are meaningless.


20 posted on 04/29/2011 7:50:33 AM PDT by burghguy
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To: ScottfromNJ

Credit Crunch was in full swing in 2008. And yet silver went up and then crashed by about 50%. Silver may well go much higher, but its gone up too far too fast for me to think that there won’t be a HUGE correction soon...


21 posted on 04/29/2011 7:50:50 AM PDT by sinsofsolarempirefan
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To: Fireone

Physical metals should be 20-40% of one’s portfolio IMO, not 5-10% as many managers suggest.


I can’t quarrel, but once you accept the reasons for buying 20-40% (or 5-10%) it’s hard not to go for 100% (including mining, and other commodities and natural resources).


22 posted on 04/29/2011 7:54:27 AM PDT by Atlas Sneezed (...a.k.a. "Norm L. C. Bias")
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To: AU72

The last time silver broke, the government had the capability to make it happen.

The only way the government can make it break this time is to quit printing paper money.

I’m not holding my breath.


23 posted on 04/29/2011 7:58:15 AM PDT by chopperman
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To: G Larry

The “can’t lose” purchase of $14 Silver I made in 1980, based on the Hunt brothers large buy at that price, FINALLY is in a profit position...


Uh, if you bought at $14, you could have sold at a substantial gain for more than a year after, even well after the Hunt debacle fully unwound. Your poor judgment then is no reflection on whether current prices are repeating the past pattern.

And even though there is no Hunt scenario now playing out, let’s play your game. $14 then is $49 now. So we can expect silver to rise by 3.5x as it did for you then, to $171. In a few months, we’ll enter a quarter where silver trades in the $100-150 range, then it will spend a couple quarters dropping to $50, then a quarter at about $75.

That’s if we play your game. Funny, when the sarcastic gloom and doomers paint such a rosy picture, it must be a good buy, even today!


24 posted on 04/29/2011 8:05:11 AM PDT by Atlas Sneezed (...a.k.a. "Norm L. C. Bias")
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To: burghguy

Gold and silver should not be viewed as get rich quick investments. They are insurance in case the world as we know it comes to an end.


I agree, but there may come a time when you want to exchange your silver for something else, after it has helped your wealth survive a crisis: real estate.


25 posted on 04/29/2011 8:06:55 AM PDT by Atlas Sneezed (...a.k.a. "Norm L. C. Bias")
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To: Beelzebubba

Agreed! The fundamental reason for owning physical is because of the looming fiat crisis worldwide. Gold and Silver are money, paper is not.


26 posted on 04/29/2011 8:10:54 AM PDT by Fireone (Liberals are just overschooled, undereducated, adult children.)
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To: G Larry
I was buying back when it was 8-9 dollars. People thought I was crazy. But I was buying it because it's pretty and it pleased me, no other reason.

Now I've got a nice little stash of several pounds of the stuff both 99.99 fine rounds and a mess of scrounged pre-64 stuff. I don't look so crazy now.

BTW I'm 51. LOL

27 posted on 04/29/2011 8:15:02 AM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: SeekAndFind

Saying WHEN instead of IF is a dangerous habit in many subjects! I can envision scenarios where the dollar and the US economy get stronger and precious metals take another slide. That said, I’m going to say “IF” instead of “WHEN”!!!


28 posted on 04/29/2011 8:28:13 AM PDT by jdsteel (I like the way the words "Palin for President" make progressives apoplectic.)
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To: jdsteel

Silver prolly won’t break just because everyone is sure that it will.


29 posted on 04/29/2011 8:31:34 AM PDT by GourmetDan (Eccl 10:2 - The heart of the wise inclines to the right, but the heart of the fool to the left.)
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To: G Larry
I'm with you....we bought a bunch of junk silver back when it was at its highest....and its taken all these years to get even, IF we sell now...

thankfully, I brought the average price down by buying some silver bullion when it was at $9 a couple of years later.....

mostly, I just thought that if nothing else, the grandkids will have some interesting things to look at...

30 posted on 04/29/2011 8:35:01 AM PDT by cherry
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To: jdsteel

“I can envision scenarios where the dollar and the US economy get stronger and precious metals take another slide.”

I am curious, could you please describe one or two of them?

I cannot imagine how the current national debt situation and obscene social spending could ever be resolved. Without solving these two interconnected issues, it would seem to me that any future American economic “strength” will be a short lived deception.


31 posted on 04/29/2011 8:06:28 PM PDT by misanthrope (Liberals just plain suck!!)
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To: misanthrope

Sure...but promise not to laugh too hard. One scenario is that a national state of emergency on domestic energy is declared, and all new oil, gas and nuclear energy production and refinement is given fast track status for the next 4 years and a moratorium on new regulations for that period. Fines for spills and accidents will be tripled during that time. The US will start selling it’s real estate holdings, using commercial sellers. A freeze on government spending for the next 4 years. A reward program for whistleblowers that turn in fraud of social services. Two tax rates; 10 and twenty percent, starting at dollar one of income an moving to the higher rate at 100,000, adjusted for inflation. Cut all business taxes by half. Stop all subsidies for alternative and any other form of energy production. Stop making anchor babies citizens. Make those receiving welfare work for the money. Make prisoners work, including the construction of border fences and new prisons. Implement some, not even all of these and watch supply side economics work it’s magic.


32 posted on 04/30/2011 9:42:39 AM PDT by jdsteel (I like the way the words "Palin for President" make progressives apoplectic.)
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To: ConservativeWarrior

>>Silver has its place.

In a worst-case scenario, I wouldn’t want to barter with gold coins.<<

That is why I have mine, and why I do only junk. Everybody knows what a silver quarter looks like. And I own all of mine long term. If silver hits $200 an oz, and the SHTF, there are a lot of things you could buy with dimes and quarters. Golden eagles, not so much.


33 posted on 05/02/2011 2:06:11 PM PDT by RobRoy (The US today: Revelation 18:4)
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To: djf

Yeah. When I told my father about the “cheap” silver I saw somewhere, he said he really is not interested in the “value” of silver and gold. Rather, he focuses on the value of the dollar. Which is why he invests in so much physical gold and silver. The dollars he is using to purchase them are really “dead dollars walking”.


34 posted on 05/02/2011 2:10:08 PM PDT by RobRoy (The US today: Revelation 18:4)
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To: RobRoy

Yeah, I’m waiting for it to hit $20, then I’m buyin’!


35 posted on 05/02/2011 2:13:26 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: MrB

>>Yeah, I’m waiting for it to hit $20, then I’m buyin’!<<

You may be in for a long wait, unless someone successfully manipulates this stuff in a “reverse Hunt bro’s” sort of way.


36 posted on 05/02/2011 2:23:41 PM PDT by RobRoy (The US today: Revelation 18:4)
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