silver
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peterpr
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The Hunt brothers are generally regarded as the wrong-doers and vilified by the public at large as 'wicked capitalists' (in so far as they remember the event at all that is). The reality is the Hunt brothers were treated appallingly by the powers that be - screwed in fact.Pippppin said:
I'm no conspiricy theorist, just a realist and I've learned that there are some very special rules and other considerations that apply to precious metals investment. I'm not complaining though, having done quite well out of the 'manipulation' of silver over the past couple of years - no point in complaining anyway when you're just a small-time individual investor. Things are rarely just what they seem though. Best I can do is refer you to the site in my last post really. Ted Butler is probably the worlds greatest authority on the silver situation and a real 'thorn in the side' of the establishment . Simliar considerations apply to gold investment.
This site is also worth a visit: http://www.silver-investor.com/archives.html
Thanks for that. I must admit I do strive for precision with language.
SilverFinger
http://www.hedgedfund.org/Article/silverfinger.htm
By HARRY HURT III
September Issue 1980 Playboy
http://www.hedgedfund.org/Article/silverfinger.htm
By HARRY HURT III
September Issue 1980 Playboy
peterpr said:It will be interesting to see what happens about Barclay's proposed new silver ETF. Ted Butler reckons it will never see the light of day for a clear and obvious reason - viz: The prospectus envisages an initial offering of 13 million shares, which equates to 130 million ounces of silver. As he puts it: "I don’t know what the Barclays people are smoking to suggest that they could buy 130 million ounces of silver at anywhere near current prices. 130 million ounces is an interesting amount of silver. It just about equals the total known world silver bullion inventory. In gold, the 6 million ounces in the two big gold ETFs amounts to maybe 1% of known gold bullion equivalent inventory.". The authorities are hardly likely to license a vehicle that will practically guarantee what they have worked so hard to avoid all these years, namely a burgeoning investment demand for silver and a consequent explosion in its price.
http://news.silverseek.com/TedButler/1120048322.php
Interesting times.
Could a silver ETF replace the COMEX traded silver ? There is insufficient silver in COMEX to facilitate an ETF, the COMEX eligible inventory is only 60 million ounces, again not enough.
There was some very positive spin when the Street-tracks gold ETF came to market, yet it has proved to be a vehicle for the continued manipulation of the gold price. On 06th Dec 2004 gold hit a high of $453.05 per ounce. Street-tracks inventory showed a holding in the fund of 103.56 tonnes. On 07th Dec 2004 that inventory has reduced to 88.02 tonnes and the price of gold collapsed. A sale of 15 tonnes of gold. To date, the price of gold has not recovered these highs.
Where did the 15 tonnes of gold go ? The Street-tracks inventory shows an increase on 03rd Jan 2005 of 15 tonnes. Short covered. The difference in price of the shares between these dates is $2.15 per share. Each share is equivalent to one tenth of an ounce of gold. Someone, for their trouble made $21.50 per ounce on 15 tonnes of gold..
Free markets ? what a joke !!
peterpr
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No idea what will happen to the Silver futures contracts. I do know that the US regulatory and exchange authorities have a clear and common interest in them continuing to work 'properly' though (ie the prospect of a delivery default ought to be a pretty daunting one for them). That's what makes the silver situation so potentially dramatic. There simply isn't enough silver in the world to meet the IPO requirements of Barclay's proposed ETF at anywhere near $7 /oz; similarly the the OI remains way above the COMEX unallocated inventory at $7, with the lions share of the short side - as ever - held by the commercials; and that price makes increased production (or even maintenance of current production levels) uneconomic. Something's got to give.Minder said:
The probem for any leveraged play on the long side is that there is a long history of longs getting screwed one way or another and I can't see that changing without one hell of a news-making fight.
Interesting piece from GATA on the subject this morning: http://www.resourceinvestor.com/pebble.asp?relid=10977
Ted Butler sees the manipulation as alive and well.
The Flush Out
By Theodore Butler
July 5, 2005
(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)
Sometimes, it’s downright eerie how reliable the Commitment of Traders Report (COT) can be in forecasting significant moves in the gold and silver market. We’ve just experienced one of those times. The buildup in tech fund long positions and dealer short positions in gold and silver created a clear and present high-risk situation, which resulted in a sharp price break.
Make no mistake; this recent swoon in price was caused by the tech funds dumping as the dealers engineered the price through the critical moving averages. This is not a complaint, just an explanation for what just occurred. In fact, if this recent sell-off caught you off guard, that could only be because you did not consider the COTs. I am not encouraging anyone to approach the markets on a short-term basis. But if you do decide on such an approach, and you disregard the message of the COTs, you will greatly handicap yourself.
Therefore, it is not surprising to me to read more written about the COTs and greater acceptance of this market structure approach as an analytical metric. What is surprising (and amusing) is how anyone can attempt to explain the recent round trip in gold and silver prices without reference to the COTs. Of constant surprise is how the silver miners can ignore the price being set by speculators on the COMEX.
So, what is the current message of the COTs? First, let’s look at where we’ve been. In gold, the tech funds plowed onto long side, with a reckless abandon over a four-week period, to the tune of 110,000 net contracts. Now we are in the midst of the unwinding, which commenced on Friday, July 1. It will take aggressive and high volume selling to clean out the tech funds’ gold buying orgy, such as we’re currently witnessing.
In silver, the flush out appears complete, or largely so. I base this on daily price and volume statistics. By my calculations, much of the 30,000 total net contracts bought by the funds and sold short by the dealers on the previous rally, have been reversed on the price decline in the past week. As such, the recent high risk in the silver market is no longer present, in my opinion. It’s safe to go back into the water.
This is important in silver, because the fundamentals are so powerful and the price is so far below real value, that you need a good reason not to be over-invested at all times.. The only good reason I have ever found not to be over-invested in silver is when the COTs are indicating that the funds are very long and the dealers very short. This was the case until this recent price decline remedied that circumstance. Therefore, I see no compelling reason not to be over-invested in silver. Especially below $7.
Once again, we are set up with a win-win situation in silver. We know there will be a rally once the tech fund selling is exhausted. What we don’t know is how the dealers will behave on that coming rally. Will they sell, as they always have, or will they stand aside, allowing the price to truly explode? It is a resolution best awaited from a fully-committed posture.
The Flush Out
By Theodore Butler
July 5, 2005
(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)
Sometimes, it’s downright eerie how reliable the Commitment of Traders Report (COT) can be in forecasting significant moves in the gold and silver market. We’ve just experienced one of those times. The buildup in tech fund long positions and dealer short positions in gold and silver created a clear and present high-risk situation, which resulted in a sharp price break.
Make no mistake; this recent swoon in price was caused by the tech funds dumping as the dealers engineered the price through the critical moving averages. This is not a complaint, just an explanation for what just occurred. In fact, if this recent sell-off caught you off guard, that could only be because you did not consider the COTs. I am not encouraging anyone to approach the markets on a short-term basis. But if you do decide on such an approach, and you disregard the message of the COTs, you will greatly handicap yourself.
Therefore, it is not surprising to me to read more written about the COTs and greater acceptance of this market structure approach as an analytical metric. What is surprising (and amusing) is how anyone can attempt to explain the recent round trip in gold and silver prices without reference to the COTs. Of constant surprise is how the silver miners can ignore the price being set by speculators on the COMEX.
So, what is the current message of the COTs? First, let’s look at where we’ve been. In gold, the tech funds plowed onto long side, with a reckless abandon over a four-week period, to the tune of 110,000 net contracts. Now we are in the midst of the unwinding, which commenced on Friday, July 1. It will take aggressive and high volume selling to clean out the tech funds’ gold buying orgy, such as we’re currently witnessing.
In silver, the flush out appears complete, or largely so. I base this on daily price and volume statistics. By my calculations, much of the 30,000 total net contracts bought by the funds and sold short by the dealers on the previous rally, have been reversed on the price decline in the past week. As such, the recent high risk in the silver market is no longer present, in my opinion. It’s safe to go back into the water.
This is important in silver, because the fundamentals are so powerful and the price is so far below real value, that you need a good reason not to be over-invested at all times.. The only good reason I have ever found not to be over-invested in silver is when the COTs are indicating that the funds are very long and the dealers very short. This was the case until this recent price decline remedied that circumstance. Therefore, I see no compelling reason not to be over-invested in silver. Especially below $7.
Once again, we are set up with a win-win situation in silver. We know there will be a rally once the tech fund selling is exhausted. What we don’t know is how the dealers will behave on that coming rally. Will they sell, as they always have, or will they stand aside, allowing the price to truly explode? It is a resolution best awaited from a fully-committed posture.
http://www.technicalindicators.com/silvcotreport.htm
This is the CoT report for Tuesday 05th July, released on Friday. Check out the changes in the commercial long and short positions. The commercial long positions have increased by 7% since last week. But more importantly, the commercial short positions have decreased by 10%. Very bullish IMO.
This is the CoT report for Tuesday 05th July, released on Friday. Check out the changes in the commercial long and short positions. The commercial long positions have increased by 7% since last week. But more importantly, the commercial short positions have decreased by 10%. Very bullish IMO.
peterpr
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Agreed. It does appear that way. I'm still holding that spec long I opened on 1st July too. No illusions about it though. It's a leveraged play so I'll be out like a shot on any dip below $7 again. I do agree with Ted Butler on the medium-long term prognosis though. Some physical silver at this price has to be a solid one way bet.Minder said:
peterpr said:
http://www.technicalindicators.com/silvcotreport.htm
This is the CoT report for Tuesday 12th July, released yesterday. The commercial short positions have maintained the reduced position, down from 77% to 66%, but the Large Speculators have increased their short positions by a similar percentage.
Peterpr, any thoughts ?
Regards
Minder
eatontrade
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Yeah its seriously outperforming Gold the last couple of days. Question is where will it run to ?
The last 2 big spikes higher (April 04 and Dec 04) were followed by VERY VERY large pull backs so Longs beware !!!
The last 2 big spikes higher (April 04 and Dec 04) were followed by VERY VERY large pull backs so Longs beware !!!
Looks like the pullback you mentioned may have started it got to 980(March) and did a u turn.. 75 pbk would be 1/4 of the autumn run up - giving about 905 - so we'll see. I thought it would get to $10 - too obvious maybe.
I've now checked the pullback in 2k4 - this means the breakout in autumn could come back as far as 800-850 but this seems (?) like a place to get in again long term.
I've now checked the pullback in 2k4 - this means the breakout in autumn could come back as far as 800-850 but this seems (?) like a place to get in again long term.
Last edited:
eatontrade
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Hook Shot said:
Agreed. Would be an agressive buyer at 8.50
Silver Rush
There has been debates on the use of TA with regards to trading Silver due to the nature of price manipulation.
As such, I base my decision and trades on my analysis of price action, but have been using the following indicators to supplement my trade executions.
Uptrend confirmed by 20 EMA above 40EMA
Good entry at pulback to 40EMA confirmed with bounce of 50 RSI,
Confirmed buy/pyramid with price close above 20 ema and MACD cross over.
Got 3rd bounce of trendline taking us potentially into next major push up?? Could suggest start of wave 3 of Elliot Wave??....suggesting test and potential break of resistance of 9.68 and then onto 10.
All thoughts welcome
Cheers
Fin
Good source for news,analysis @ www.silverseek.com
There has been debates on the use of TA with regards to trading Silver due to the nature of price manipulation.
As such, I base my decision and trades on my analysis of price action, but have been using the following indicators to supplement my trade executions.
Uptrend confirmed by 20 EMA above 40EMA
Good entry at pulback to 40EMA confirmed with bounce of 50 RSI,
Confirmed buy/pyramid with price close above 20 ema and MACD cross over.
Got 3rd bounce of trendline taking us potentially into next major push up?? Could suggest start of wave 3 of Elliot Wave??....suggesting test and potential break of resistance of 9.68 and then onto 10.
All thoughts welcome
Cheers
Fin
Good source for news,analysis @ www.silverseek.com
Attachments
Not heard any news on the ETF....
Only just started trading in silver so decided to do some background research to see what make it tick...
Came across a couple of things of interest...
History
Since 3200 BC there has always been a system of bi-metalism between silver/gold
The ratios have been approx
3200BC = 25:1
1497= 13:1
1641=14:1
1785= 16:1 (Spain)
The natural occuring ratio is 17.5:1
The US Coinage Act deliberately underpinned this ans set the ratio at 15:1
In a bull market, ratio sinks
In a bear market, ratio rises
This ratio has been hit 3 times in the last century (1919, 1967,1980).
Supply/Demand
There has been a surplus in supplies upto 1980
Since 1990, fabrication demand has averaged 156% of yearly mining production
As a result, demand has outstriped supply and in 2001, the excess turned into a shortfall 0.5 billion ounces.
If this is the case, then why has price not as it should have...hence the issues and concerns of price manipulation..etc etc.
One thing to note is that if price manipulation has taken place, then all the better in the long run when market factors eventually take over....a reason why silver should outperform gold..along with the fact that silver is actually consumed whereas gold is not.
Throughout history, silver has, and still is, perceived as a source of money. When the confidence of fiat money wanes, investor pour money into gold as an inflationary hedge.
Now, given the history of between silver and gold, it is important to note that the key to silver is monetary demand.
So is the price rise we are seeing a result of S/D, monetary demand or both?
Here are the things which could create that monetary demand
1) Yen-Carry Trade - borrowing of yen at 0% and switching to UST at 3%..been happening for the last 10 years. With Japanese seeing growth in last 3/4s, there is a potential for this to end combined with a decreased demand for UST
2) Iranian decision of opening Oil Bourse priced in Euros from March 2006, undermining the $ as a reserve currency and allowing EU states to purchase direct without FX
3) American Federal Reserve are stopping the publishing of M3 from 23rd March 2006, i.e Dollar circulation. Now why would they do this....i wonder!!!
Anyhoo....i'm in silver for the long run..
As always, all thoughts welcome
Cheers
Fin
Only just started trading in silver so decided to do some background research to see what make it tick...
Came across a couple of things of interest...
History
Since 3200 BC there has always been a system of bi-metalism between silver/gold
The ratios have been approx
3200BC = 25:1
1497= 13:1
1641=14:1
1785= 16:1 (Spain)
The natural occuring ratio is 17.5:1
The US Coinage Act deliberately underpinned this ans set the ratio at 15:1
In a bull market, ratio sinks
In a bear market, ratio rises
This ratio has been hit 3 times in the last century (1919, 1967,1980).
Supply/Demand
There has been a surplus in supplies upto 1980
Since 1990, fabrication demand has averaged 156% of yearly mining production
As a result, demand has outstriped supply and in 2001, the excess turned into a shortfall 0.5 billion ounces.
If this is the case, then why has price not as it should have...hence the issues and concerns of price manipulation..etc etc.
One thing to note is that if price manipulation has taken place, then all the better in the long run when market factors eventually take over....a reason why silver should outperform gold..along with the fact that silver is actually consumed whereas gold is not.
Throughout history, silver has, and still is, perceived as a source of money. When the confidence of fiat money wanes, investor pour money into gold as an inflationary hedge.
Now, given the history of between silver and gold, it is important to note that the key to silver is monetary demand.
So is the price rise we are seeing a result of S/D, monetary demand or both?
Here are the things which could create that monetary demand
1) Yen-Carry Trade - borrowing of yen at 0% and switching to UST at 3%..been happening for the last 10 years. With Japanese seeing growth in last 3/4s, there is a potential for this to end combined with a decreased demand for UST
2) Iranian decision of opening Oil Bourse priced in Euros from March 2006, undermining the $ as a reserve currency and allowing EU states to purchase direct without FX
3) American Federal Reserve are stopping the publishing of M3 from 23rd March 2006, i.e Dollar circulation. Now why would they do this....i wonder!!!
Anyhoo....i'm in silver for the long run..
As always, all thoughts welcome
Cheers
Fin
Finirama said:
What a run and I suspect much more to come!!! One word of caution though, GLD was introduced at an intermediate top. Gold dropped by more than 10%. The age old adagium applied: "buy the rumour, sell the news". I personally have no doubt that the smart money is positioning it self for the ETF introduction!! When the ducks are quacking, feed them well!!! ;-)
