"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Thursday, August 18, 2011

Silver Stuff

I wanted to post a few comments about the Silver market for some of those who have been asking me to do so. As mentioned in previous posts here, silver is finding itself caught in a war between those running out of risk trades who are selling commodities and equities, and those who are buying it as a safe haven metal.

That tug of war has prevented it from surging alongside of gold but nonetheless, even in the face of such selling, it has been attracting enough buyers that its technical chart picture is slowly but steadily improving.

I want to first note that it has regained its footing above the 50 day moving averaage having bounced firmly off of that key technical level last week. Since then it has established a nice little uptrend which has taken it back to the region where it has encountered selling resistance over the last month or so. I am speaking specifically about the region near and just above the $40 level.

If you will also note, all four of the major moving averages that I use in tracking this market, are now moving higher with the silver price ABOVE those ma's. That is bullish. What I would like to see and what it appears that we are likely to soon get, is for the 10 day moving average (blue line) to move up and crossover the 20 day moving average (red line). That would put the market solidly in an uptrend as it will take some stability at these current price levels for such an event in the moving averages to occur.

If, and this is an important "IF" from a technical perspective, silver can close out the week tomorrow on a firm note, preferably with a push through the $41.30 - $41.50 level, it will enter the following week on very solid technical ground and set up a run to the $44 level for starters.

It still has some downside support first near $39.50 which is followed by another level of support near the $38 level. It would have to breach that latter level for a move towards $35 again.

At some point, as gold continues to move sharply higher, silver will become increasingly attractive to value-based buyers as it is still very affordable if one considers the current options in what can be termed "precious metals", platinum ($1845), palladium( $758), and gold ($1835). None of these metals are cheap any longer ( in the sense that the common man on the street can plunk down some loose change for an ounce) making the little grey metal, "poor man's gold", likely to outperform on a percentage basis in the coming months.


  1. Dan, IMO silver is showing strong underlieing strength. Any pull back will be eagerly bought. The action we are seeing is very healthy also indicating to me a sharp rise in the near future. Most likely silver's rise will also be accompanied by the miners as the fundamentals are greatly putting pressure for an upside move. This has certainly been a interesting summer to be followed by a memorial fall. Good luck to all.

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  3. What are the chances the countries/companies Venezuela is getting its gold/silver delivered from are buying it on the market with not enough reserves?

  4. Dan,

    You really are a good man. Someone willing to share his truths, being able to back them up with strong data, and unafraid to tell it like it is. Thank you!!!!!!!!!!!!!

  5. As an investor in the mining shares for the lastt 3 years, I have become numb to the hegies trying to use vacume cleaners to suck out the coins from my couch. I believe like you that they are about to meet their maker. Santa Claus (Jim Sinclair, Turd) big yellow hats too all. Lets have a nice christmas shall we? Hedgies, the plank is getting shorter. Gulp

  6. Thank you for all you do Dan. Love listening to you on KWN. I am curious to see if Google Trends will be as accurate at predicting the next serious silver sheeple shearing. Compare this to a 12 month silver price chart chart. http://www.google.com/trends?q=silver+prices&ctab=0&geo=all&date=ytd&sort=0 Top predictor?

  7. One more Friday blog. At large financial institutions, we had to put our stamps on transactions. I looked a many large mining asset puchase deals on the haul trucks, shovels, excavators, material handling systems etc. Prior to submitting these asset analysis reports, we would give positives and negatives. In the current state of affairs, I see that the Bulls for gold and silver, far outweigh the "cubs". Have a great weekend all. Dan, if you ever get towards Annapolis MD, you have a free place to stay. Maybe not what a trader is used to, but, free. I would love to buy you a couple of pitchers and trade stories...have a great weekend.

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  9. Hi, thanks a lot for charring you market views. I have a question regarding QE3. In your view, what might happen to gold and silver if Bernanke does not announce QE3 in the Jackson Hole meeting? Also is there a risk for the CME to pull a 'silver crash' on gold by raising margins? I’m a bit nervous about gold because I think that it’s the leveraged speculators that have taken it so high not the physical buyers. Am I wrong here?

  10. Dow can surge to 12000 levels before cracking down, most the stocks are looking tired, its time to be cautious on longs. please visit http://www.kalpeshmaniar.com for accurate forecasting of markets.


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