Thursday, 9 December 2010

When to buy silver again?

After hitting a high of US$30.70 /oz, silver has been retreating. It last traded at US$28.36 /oz.

If we look at a very simple 1 year chart for silver, its price has been supported by the 200d MA until August when it bounced off and has been approximating the 14d MA since. If we believe the strong uptrend could continue, we might want to buy in a small position when silver is nearer US$27.00 /oz.  That would also be about a 10% pull back from the high of US$30.70 /oz or a 5% pullback from current levels.

UOB Silver Savings Account is now selling silver at S$37.87 /oz.  A 5% pull back from current levels would bring it to S$36.00 /oz (not accounting for exchange rate fluctuations).

A correction could allow up to 20% in pull back from the peak. That would approximate US$24.00 /oz. Personally, I see stronger support at that level and because I am already vested in the metal, I am in no hurry to add to my position now. US$24.00/oz or approximately S$32.00 /oz would probably see me buying more.

Tuesday, 7 December 2010

How is my investment in silver doing?

Whenever people ask me when I would sell my investments, my answer very often is that I would sell at a price I would not buy at.  Of course, that makes sense at an intuitive level but how do we execute it?

Personally, my investment in silver has appreciated by about 60% in less than 9 months. I think that silver still has plenty of potential to move higher but this should be over a longer time frame of years. You could read my other blog posts on the subject of silver and how high I think it could go.

However, silver's price has gone almost parabolic in recent weeks and this is unlikely to be sustainable. I am expecting a pull back to support. When will it happen? Your guess is as good as mine but if it happens, that is when I would buy more.

Although I didn't have to sell any of my investment in silver, I sold some yesterday because I happened to be at UOB which is rare since I do almost everything on the internet these days. So, if the anticipated retreat in price happens, I would have extra money to buy more silver.

I took photos of the transaction slips which show my buy price in March (S$24.26/oz) and sell price ($38.86/oz) yesterday:

Silver is going higher in time but it will most likely climb a wall of worries and I would buy on pull back. I believe in having more silver in my investment portfolio.