Monday 22 August 2011
Posted by
Admin Hijrah Dinar
Today's silver update shows that it almost compensated for all of the recent falls in the first week of the month.
Yesterday, silver ticked up to $39.34, at a 1.3 percent rate of increase. The gold to silver ratio holds steady around the 44-45 mark. Yesterday, August 16, it was at 44.80.
Overall, the extreme market volatility is set to push silver up even higher, but it won't be surprisng to see some pullback along the way.
While gold is currently outperforming silver, and the solvency crisis could pull silver down dramatically in coming days...there's no need to fret...
With fears of Depression looming, the precious metals market could react strongly to the downside. Dramatic gains and losses are probable. But, as we learned in 2008, those who understand what the volatility means will be rewarded handsomely.
Yesterday, silver ticked up to $39.34, at a 1.3 percent rate of increase. The gold to silver ratio holds steady around the 44-45 mark. Yesterday, August 16, it was at 44.80.
Overall, the extreme market volatility is set to push silver up even higher, but it won't be surprisng to see some pullback along the way.
While gold is currently outperforming silver, and the solvency crisis could pull silver down dramatically in coming days...there's no need to fret...
In an interview with The Gold Report, Morgan [publisher of The Morgan Letter] said
it’s hard to predict the amount of hot money in the silver trade at
any one time compared with committed money in the metal.
“As people figure out that there
really is no solution to the global financial system without a great
deal of pain and some defaults along the road, more will seek the
safety of precious metals,” said Morgan. “So, even when things calm
down for the moment, it does not mean the precious metals will not
get pushed down.”
Some analysts warn that it isn't such a farfetched idea to propose
that silver has the potential to drop rather dramatically -- maybe even
as low as $5 per ounce.With fears of Depression looming, the precious metals market could react strongly to the downside. Dramatic gains and losses are probable. But, as we learned in 2008, those who understand what the volatility means will be rewarded handsomely.
“My best guess is we will see some
pullback going into mid-August,” he added, as investor demand comes
back in to pick up silver at bargain prices before the traditional
September to April buying season and strong demand accelerating out
of Asia.
But more importantly, Morgan, who
agrees with Swiss money manager Marc Faber suspects that the endgame
in the Bretton Woods currency scheme failure is near, and that
governments will opt to continue debasing their respective currencies
in lieu of outright default. But where the two men differ from
Goldmoney’s James Turk and the legendary Jim Sinclair is, first, a
sell off before the historic advance in the silver price past the
all-time high of $50.35.
...
"What happened in 2008 was a
silver sell-off that caused a shortage, pushing the physical price
of silver at the retail level to around $13/oz., while paper silver
traded under $9/oz. on the futures exchanges,” concluded Morgan.
“Excessive short selling then ran the price from about the $20/oz.
level to the brink of $50/oz. The next leg up could take out the
$50/oz. level after a few tries and then not look back until
establishing a new nominal level of $65/oz.–$75/oz.”
*Indented excerpts from The Silver Chronicle. 
Category:
Gold Saving / Investment
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