Price manipulation in the Gold & Silver futures markets has kept bullish investors on the sidelines that were waiting for physical demand for Bullion – the most important fundamental for a price rally, to pick up. Although cheaper Gold & Silver Prices seem to be invigorating demand for Gold Jewelry, Gold Coins & Silver Coins, it does not seem enough to offset the decreases in sentiment & thus lower driven volumes noted on the ETF Investment & futures trading side. Gold & Silver Futures are both technically in a deeply over-sold condition & seem poised for a price rally as soon as appropriate & solid triggers hit the market headlines. Gold & Silver futures may see some struggling period till then. Gold & Silver Prices will benefit from “some safe-haven buying from Eurozone investors again as another raft of gloomy headlines including a possible Italian Euro-exit, further German objections to bank bailouts and more tales of woe regarding Greek and Cypriot Bailouts & Austerity hit the markets. The BoJ, ECB & BoE hold their monthly policy meeting on Interest rate & monetary policy decision this week. With heavy inclination towards pushing off Deflation, massive monetary stimulus will again be discussed & announced, thus providing the much awaited triggers for a Gold & Silver price rally. The view, that these actions now will drive Inflation excessively high soon, hardly seems to matter at this moment as the world has shifted from “Planning for the Future” to “Living for the Moment.” The Currency Wars currently have the GBP & the Yen as top contenders to win the race to the bottom. This heavy monetary debasement will sooner than later show its true effects on domestic life & that is the time when Gold & Silver will again display their true value as safe haven investments. The US dollar’s current good fortune is due to the Euro’s current misfortune, and certainly not due to the actions of the Fed, which has been working assiduously to undermine it for years. The dollar’s short and medium-term oscillators are actually getting substantially overbought already, so the 84 area would be a good point to this rally to end, and it is now not so far above the current level.
Silver – The logically preferred Investment choice:
Since 2012 I have repeatedly displayed my personal preference to Silver Investment than Gold after being highly bullish on Gold Investment since 2005 & having disposed most of the Gold Holdings in 2011 when around $1900. Read more – Forecast 2013. Gold Investment gives better returns in times of crisis like the one seen in 2007-08. But now the world is turning to a Risk-On mode where Silver Investment would fare better. I am sure that Gold Prices will again rise from the recent hammering but seriously doubt whether the previous peak would be achieved anytime soon. I have repeatedly alerted of a rising resistance in Gold Prices in the $1810 to $1855 range & that is the peak I expect for Gold Prices this year. Gold would need a mega supportive factor to breakthrough this range & even if that does happen in a rare incidence, Silver Prices would by then be way above the previous peak of $50. A Price rally in Gold from the current $1575 to $1855 would deliver 18% returns on investment & 22% if Gold Prices rise to 2011 peak of $1921. In comparison, Silver investment would give a mammoth 77% gain in a price rally from the current $28.5 to $50, its previous peak of 2011. Rarely does an investment opportunity present itself that has this kind of profit potential.
The Silver Price Manipulation:
It is always tempting for the “Big Money” to engineer a false break below major support levels to run the remaining stalwarts out of their positions ahead of a swift reversal and into a big price rally. This “Big Money” also many a times has the control of the popular media whereby it can influence the minds of the small guy. While Silver has a bottom support much further down at $25, it needs to break above $29.35 from current levels successfully to rise further up. As Clive Maund says, the support at the bottom of the large trading range is so clearly defined, so strong and so obvious that we need to be careful regarding the placing of stops. If we can see this you can be sure that Big Money can, so it is just possible that they will run Silver briefly below this support to trigger the stops that are clustered beneath it, and mop up all the remaining holdings that they haven’t already netted before a sudden and dramatic reversal back above the support, but the reality is that they don’t really need to do this – they’ve squeezed most people out already, and all the indications are that this support will now hold, especially as the outlook for Gold is now so positive. There is much evidence that the current Silver Prices and other Precious Metals have long been manipulated and coordinated in order to keep markets and their derivatives stable. Official investigations by the CFTC continue to this day. The amount of “short” or Paper Silver far exceeds the actual amount of silver by close to a year’s worth of mine production. While heavy short selling exists in other markets also, it is unprecedented and extreme in Silver Futures. Market Manipulators have consistently been hitting out at all small rises in order to squeeze the last drop of blood out of the little guy before the next big rally starts.
After all, the markets will need sellers when these manipulators turn buyers. There have to be sellers when one needs to buy something, without which there cannot be a transaction. There will also be a need for a large number of passionate sellers & so the need to totally crush the upside sentiment in Gold & Silver was born. The “Perfect Gold and Silver Market Storm” thus got initiated. Once the masses are completely convinced that Bullion have had a long run up & now need to be sold at each rise to achieve gains, they turn to be passionate sellers. That is then the birth of a seller at each & every rise, who will one day realize that he is doomed by these acts, albeit too late. If not the weak individual, then who would be an easier target to manipulate?
Read more in “Gold Silver Bears will be the first to turn into Bulls.”
Robin Bhar, Head of Metals Research, Societe Generale on Silver Investment:
Strong investor appetite for Silver at both the institutional and retail level may just be enough to absorb the supply surplus for the metal, says Robin Bhar, head of metals research, Societe Generale. Demand for Silver Coins and Silver ETP – exchange-traded products are healthy as “some investors who want precious metal exposure are looking to Silver as a cheaper substitute for Gold,” Bhar says. Silver Coins demand may outstrip demand for Gold Coins as there is “considerable interest in American Eagles Silver Coins in Europe as well as North America,” he says. Also, net investment into silver ETPs is now $650 million, with a daily average of $15.7 million, which is up 32% from a year ago. If the strong interest in Silver in 2013 can be sustained, “then the market’s surplus should be absorbed this year,” he says. Yet Bhar also cautions: “the market remains volatile and vulnerable to profit taking, however, and is unlikely to tighten; suggesting that profit taking into strength would be the preferred course of action.”
There’s NOTHING that comes close to a SILVER Bull Market!
“Bright Days Ahead in the SILVER Market” David Morgan