Tuesday 16 April 2013

Silver: Extreme bearishness.

The positive divergence I observed in the chart has been negated. This is very bearish.

Daily chart.

Weekly chart.

With such strong negative sentiments, we could see silver testing support at US$20.00 an ounce next.

Although I believe in the fundamentals of the precious metal, waiting for the dust to settle (i.e. waiting for a clear bottoming process) is the prudent thing to do as the downtrend is still very much in force.

Related post:
Silver: Could be good to buy some.

11 comments:

Unknown said...

Great opportunity to buy Silver as soon as the price stabilises. I have a feeling $20 support will be tested very soon.

AK71 said...

Hi HM Shak,

Indeed, it could happen. The dust has yet to settle, for sure. ;)

so1trg said...

Silver just broke thru a descending triangle, making $26 a strong resistance.
Make sure when u buy, risk reward have been adequately considered.

AK71 said...

Hi so1trg,

I buy silver and gold more as insurance than investments. I am not overly concerned with short term price fluctuations but I still want to buy at lower prices, of course. ;p

So, just waiting for a clear bottoming process to take place before I make my next move. :)

so1trg said...

When u mean insurance, u mean insurance against hyperinflation?

AK71 said...

Hi so1trg,

Unlike paper money which has, theoretically, an infinite supply, gold and silver are finite in supply. :)

Jim Rogers has repeatedly warned about how accelerated money printing in the USA, Europe and, now, Japan will lead to devaluation.

Gold and silver are effective portable stores of wealth. They are, I believe, good long-term insurance policies against the inherent flaws of fiat currencies.

so1trg said...

Gold and silver are finite in supply to the extent which the miners are able to extract from the soil. Beyond that, its hard to quantify their finiteness.
Furthermore the supply of silver being mined over the past few years have been increasing. This is in line with the cycle of increasing PM prices, more gets mine. I am guessing that prices are correcting because of the expanding supply.

I am not sure if Jim Rogers still holding on to his gold and silver. But Soros have sold his entire holding of gold. Maybe hr will buy back when it's cheaper???

Undoubtedly, fiat currencies are flawed. But I can't fathom a simultaneously worldwide collapse of the fiat currency system in its current state.

AK71 said...

Hi so1trg,

Well, there are many things which we cannot imagine happening and I think the GFC was one such event.

Black swans.

So, I guess that is what insurance is for. To afford some measure of protection against what is unlikely to happen. :)

Having said this, I also look at precious metals as investments. I don't have any problem with making some money buying low and selling high. ;p

so1trg said...

If only I have the mutant ability to know with 100% precision when to buy low sell high and vice versa...

AK71 said...

Hi so1trg,

100% precision. Ah, that gives the word "fantasy" a whole new dimension. Hahaha... ;p

AK71 said...

Singapore’s gold and silver dealers were inundated with buying interest on Tuesday as retail investors look to take advantage of lower prices after the precious metal’s slump over the past few days.

The rush to buy physical bullion in Singapore signals retail investors’ faith in precious metals as safe-haven assets and hedges against inflation even after gold dropped to its lowest level in two years on Monday.

Gold shops are full, online orders are piling up and some dealers are running short of lower-priced items like gold and silver coins and smaller gold bars, they said.

“There’s always demand at such price levels and our shop has been packed with people,” Gold Silver Central Managing Director Brian Lan said adding that traffic in the shop has been some 40% higher than usual over the past few days.

Tightening supply of silver coins has helped spur unusually high buying interest in precious metals in Singapore where buyers can be more conservative with their bullion buying than in Asia’s biggest markets China and India.

“The orders have been pouring in” and supplies are dwindling fast--particularly for U.S. and Canada minted silver coins, Bullion Star regional operations manager Zane Lim said.


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Tuesday, 16 April 2013 17:26