ON-SALE in 2014? Could Silver Drop to $13?

Are such low silver prices ever possible again?  Technically, yes.
Unless one was fortunate to have acquired the bulk of their physical silver allocation circa 2005 at an FRN price of under $6.00 per ounce, silver’s fall from grace since its 2011 peak has been nothing short of a hellish nightmare for most.
The current bear market in precious metals has had no mercy for those too anxious in backing up their trucks to load up on these highly valued and much sought after monetary components.
NEWSFLASH:  Gold & Silver (REAL-MONEY) remains ON-SALE!

Sunshine Mint Silver Eagles As Low As $.79 Over Spot at SDBullion!

Submitted by EWT:

The classic monetary metals shall always remain in high demand because throughout all of recorded history, they have NEVER FAILED in effectively balancing and insuring the most successful and well-rounded financial portfolios.  Current price levels and the dominant downtrends in Gold and Silver are poised to lend prudent metals investors several more opportunities to dollar-cost average into another major bear market low in 2014.
The long-term chart above illustrates silver enmeshed in a ravaging bear market that is approaching 3-years in duration; note the downside swing target listed at $13.71 FRN’s per ounce.  From an Elliott Wave perspective, the (ultimately mega-bullish) primary move down to the red wave-2 is unfolding clearly in three corrective waves (a), (b), and (c) at the intermediate degree of trend.  Of which, the current intermediate wave (c) decline appears poised to unfold in five waves down at the minor degree of trend labeled numerically in blue.

Zooming in closer from the long-term weekly price action above to the daily chart below, illustrates Septembers minor wave 4 crest at the $25.12 level followed by an impulsive minute decline to wave-1 at $21.21.  Thereafter, a sideways upward correction to minute wave-2 (alt: light blue minor-4), and a current minuette degree five-wave decline toward the red colored minute 3-wave at the lower right portion of the chart is illustrated.

(This 3-wave terminal alternatively labeled with the smaller degree light blue 5th wave terminals upon which, a print beneath $18.18 could alternatively end the entire primary bear market).  If the pending red colored minute waves-3 and 4 remain in play, then the bears must hold any 4th wave rally beneath the $21.21 level, which would violate the wave-1 terminal, which in turn would suggest that a major primary 2nd wave bottom may have already passed.

 
Most recently, after hitting the first downside swing target drawn at $19.18 on Monday (BAM!), $16.76 illustrates the next downside swing target.  Also notable on the daily chart is the stiff horizontal resistance at $26.07, which defends a downside price target of $15.00 FRN’s per ounce.  The rising red trend-line so arrowed defends a similar downside price target at $15.15 FRN’s per ounce.

To sum up, although the precious metals markets can print a final bottom at any moment, if a major bottom were to occur in 2014, and the downside price targets mentioned above occur as forecasted, how might one begin to amass a prudent speculative position in silver over the coming year?

The first thing one must ask is how much physical Gold and Silver should one own relative to their net worth.  (An annually rebalanced 10% allocation is the most common and conservative wisdom.)  Secondly, if one has the sufficient number of FRN’s (Federal Reserve Notes) on hand, might we suggest deploying only HALF the allocation, and deploy those FRN’s in four-stages.  Doing so will keep the other half of the allocation ready for future deployment in the event silver FRN prices go even lower than $13.71 per ounce.

For example: One could divide half their allocation within four purchase points starting with 25% now at $19, then accumulate 25% more at $16.76, then again at $15.15, and the last 25% at $13.71 for an average cost basis of around $16.00.  If all goes according to plan, one would then be HALF-IN, and fully prepared to make four more similar purchases in the event silver goes all the way back to $6.00 FRN’s per ounce, which is plausible, but highly unlikely.

Buy Low, Sell High…  That’s what they say…
Perhaps another option to begin funding one’s precious metals holdings is to take profits and sell some of that which is overvalued (stocks) in order to acquire that which is undervalued (monetary metals).

Comments

  1. I suppose that anything is possible but I also know that from 2006 until now energy prices have doubled plus. Therefore in order to extract said silver even as a secondary or tertiary product, it would behoove the mines to shut down rather operate at such a significant loss. I also know that the Morgue is long gold with a technical”corner” on the market so are they really going to let silver crash and bring gold along for the ride after all it took to get long? That’s a resounding “F***  NO ! 
    So let’s talk about what is really going to happen… the Chinese are setting records accumulating gold, the Indians are trippling their YOY silver purchases, the COMEX IS at its lowest inventory available for gold ever, The Morgue has cornered the gold market long, the Fed Res is printing money like it’s goin outta style, Yellen makes the Bernanke look spendthrift, the US hasn’t had a balanced budget in years,48 million on the dole, Obummer Care has yet to kick in, Chicago is next on the list of tits up, we have no industry to speak of, and things generally look like it’s goin to shit. Pardon me if I missed some other highlights but I think u get it. Now what was sparky blabbering about 6 dollar Silver?!

    • Well said!
      One thing I thought was a brilliant observation, was BrotherJohnF’s question as to why Silver is still fixed each day in London if it is no longer seen as a Tier 1 asset but is now viewed as a commodity.

    • I agree about the comments on running near cost of production, however I also know that miners have had it relatively good and the best ones will trim fat and reduce their cost of production.  Obviously energy and labor costs are relatively out of their control… overhead, overtime, etc are within control. Your point is well made though, lower prices will mean lower production.
       
      Regarding JPMs position, nobody has been making mention that the short on most of the other side is HSBC, this I find interesting.  Another huge player in gold and with inventories in their warehouses that dwarf JPMo by a factor of 4x. Clearly they are connected in the secret gold world as well, yet this december they are selling when JP is buying.  Also interesting, last december JP was long and stopping and then in Feb they turned around that month and again the following month and sold the ownership back.  Will it be the same this time? Don’t know, the magnitude of their play all this year has been interesting, through May they had issued about 13,000 contracts, since then they have stopped and issued, with a net result of gaining back about 7,000 contracts. Want to really get your wheels spinning? HSBC had been a net stopper (long) of about 14,000 contracts until this month. Really starts to make you wonder who should be paid attention to.

      *note: My math may be off by 500 contracts or so due to quick rounding/figuring but this is easy for anyone to fact check; should they care to reply with a more precise number i’d welcome the correction*
       
      @SILVERTONGUEDEVIL
      One last comment regarding your quote on comex gold inventories: We are at recent lows, but no where near historic lows.  Stocks haven’t been this low since 2006. 

    • @mikeyj80
      So HSBC ( HongkongShanghaiBankCorp) is short and JPM is long…well isn’t that interesting. So then the game is China is short ALOT and we, the USA,through JPM is long but just not long enough to force the price up due to the overwhelming short position held by the Chinese. But the Chinese are buying phyzz like mad?! That being said are they buying to cover the short position and ultimately declare long? I’m not sure how all this ties in but I’d bet my round fuzzies that it means something I just don’t know enough to figure it out.

    • God, I wish it would hit 6 or 13.  Talk about cost averaging.

    • @SILVERTONGUEDEVIL
       
      Chess not Checkers seems to be the common phrase here lately, seems apt again.

    • @nitro
      “…One thing I thought was a brilliant observation, was BrotherJohnF’s question as to why Silver is still fixed each day in London if it is no longer seen as a Tier 1 asset but is now viewed as a commodity.”
       
      Probably because they heard Ben Bernanke tell Ron Paul Gold wasn’t money???

  2. its amazing how the doc is starting to PUBLISH the bearish articles after a 3 year bear market that many have warned about and about buying in the high 30s thinking it was cheap… or that there is a shortage of this meteal.. 
     
    bottom is arriving…. doc and this ew guy dont know it yet.. 

    • “its amazing how the doc is starting to PUBLISH the bearish articles after a 3 year bear market that many have warned about and about buying in the high 30s thinking it was cheap… or that there is a shortage of this metal.”
       
      If there was plenty of physical silver floating around then JPM and co wouldn’t need to suppress prices every day in the fake paper silver markets with their massive “paper short silver positions” as they could just dump billions of ounces of physical silver on the market. The same bankers also tripled their concentrated short positions in paper platinum and palladium in 2012 resulting in severe price suppression even though physical supplies for both are extremely tight.
      Interesting to see bankers in the latest Banker Participation Report, both US and non-US bankers, aggressively cutting short positions in paper silver and non-US bankers cutting short positions in paper gold. Even banker platinum and palladium short positions are being reduced.  It looks like they are preparing for the coming US dollar devaluation.

  3. with miners seeing grades go down and having to go further and move more earth for the same metal in the face,of mutilated prices i am eager to see a supply shock.

  4. BRING ON THE $13 Ag. dream come true…. 

    • We’ve been there and seen that.  It sucked.  Back in late 2008, the price of silver briefly dipped below $9 an oz.  But whether it was $9 or $13 was irrelevant.  It was irrelevant because those who had physical silver chose not to sell it below $15 an oz.  Personally, I would welcome $15 an oz. silver and would be buying a monster box each week at that price.  I would do that because I can and because I know that this likely would be a temporary price bottom.  I believe that silver is undervalued at $19 and change.  At $15, it is a gift from heaven.  :-)

  5. Government can’t control you if you have a physical money commodity, they need everyone in digital currency so they can drop the hammer if you don’t comply by turning in your guns, giving your kids to government indoctrination schools…

  6. Is Elliot a stacker? 
    Re the mining output.  70% of silver production is byproduct of base metals.  30% is not.  If that 30% is totally unprofitable, not worth mining, then it stands to reason that we could see a similar drop in mined supply. 
    I wonder where that would lead us and the silver supply?

    • Is Elliot a stacker?

      No, he isn’t. He just stares out the window and waves at the cars and trucks as they pass by.

      It would lead us higher; for if it cannot, we would have to be in a 30% over-supply situation right now.  Somehow, I do not think that is the case.

  7. Up until the 70′s it was One Ounce=One Dollar.  We called it a “silver dollar.”  From one buck to $6 is a 600% increase. Or devalue which ever you are rooting for. Then from $1 to $20 it is a 2000% devalue of the fiat. I see in the short term a flash crash in the sawbuck and then an internationally recognized treasury note devalued to its own alter ego the FRN by 50%. Silver will of course never change its VALUE.

    • “Up until the 70′s it was One Ounce=One Dollar.  We called it a “silver dollar.” “
       
      Close but not quite.  A US silver dollar’s silver weight was based on $1 worth of silver at $1.293 an oz., or about 0.7734 oz. of pure silver in a US Morgan or Peace silver dollar.  Because of their historical value, US silver dollars in decent condition are often more expensive than ASEs, Maples, and other 0.999 silver 1-oz. coins, even though they contain almost 1/4 oz. less silver.

  8. 13 federal reserve notes an ounce?  Bring it.  They’ll put me in a neck brace with whiplash from backing the truck up so quickly.

  9. The only chart that matters has not been published yet. This future chart will be revealed after Social Security and medicare are bust. When people need thier money  to care for themselves. 401K, Mutual Funds, Stock Market funds, etc.. When people start drawing these funds, in mass, that`s the chart I want to see. For Wall Street to prosper, as people draw thier funds out, new funds must be invested at the same rate funds are withdrawn. I simpley do not see this as a possibility, so we will not be permitted to draw our funds out. Problem solved if your a banker type. Problem agrivated if your the average citizen.  This will be the tipping point. America will hit financial critical mass. I don`t have the answer, I only know the question. This is why I stack. The Social Security and Medicare promise cannot be kept.
     
    I first knew we were in trouble about 10 years ago when Social Security and Medicare were refered to as intitelments. Like it is bad to recieve these benifits, which we paid into dearly for all our lives. Allright, then just give me back the premiums I paid in all through the years. Fat chance thats ever going to happen.
     
    Did you ever notice that hospitals are building Vegas worhty buildings. And so are the Insurance companies. Yet when you get hurt or sick and go there, none of the flashy building fronts have anything to do with treatment.
     
    Before bailinns, these are a few things I see comming. Oboma care will replace Medicare, and you pay for it. Social Security will be saved, but in a smaller scale.
     
    If any announcment along these lines  comes along, I will retrieve my stack, and keep it a t arms reach

    • “For Wall Street to prosper, as people draw thier funds out, new funds must be invested at the same rate funds are withdrawn.”
       
      Really?  Seems to me that the folks on Wall Street are in the business of buying and selling.  They get paid regardless of whether they are buying or selling for their clients and regardless of whether the market is rising or falling.  LOTS of selling would still bring in LOTS of fees.  The stock market has gone through many cycles.  Sometimes the general tread is up (buying) or down (selling) but in either case, Wall Street does OK… and sometimes MUCH better than just OK.  Remember, these people are buying and selling for their clients.  They are not buying a lot of shares of stock or bonds and just holding them.  They might choose to do some of that with their profits, though.
       

    • Dang Ed_B, beat me to it!

  10. It could go to a dollar if the crimex says so. But there be no sellers. An liquidity of silver would be locked frozen. An all hell would brake loose. The government would then lose it hold over the price. An people would sell an trade there pms under ground. An the metals of the gods could run free once again. So iam saying low to me $15 range be about it. There not enough silver to sell at that price.

  11. If Silver breaches anywhere near $13.00-$15.00, BEND OVER AND KISS YOUR ASS SO LONG. i’D BE BUYING GOLD INSTEAD.

    • @Ranger
       
      Do you still have lip prints on your butt from Oct 24 2008?  Back then, silver dropped very briefly to $8.88 an oz.  That is WELL below $13-15 an oz, yet somehow we are all still here.  ;-)
       

    • I call those a scar… have one thanks to some calendar spreads going upside down, came out rosy as analysis on fundamentals underlying the bet were solid… but painful to live through.

  12. When the paper market implodes Silver along with Gold will explode. Look at the 10 year Bond yield right now. IMO it is two years away, the Dark Powers are all powerful right now with believable propaganda by the sheep. The sheep will never awaken , bless their souls as long as the women who love Obama think bigger is better on a black man, and the Oreo keeps telling believable lie after lie, Gold and Silver will remain static. The Brits and the Krauts are propagandizing the investigation of both the Gold and Silver London fixes, but will fade like the CFTC investigation. Believe nothing you hear and little of what you read here or anywhere else folks. Isn’t it odd to you that when the metals are down that something or some financial Guru starts a bunch of propaganda Bullshit? There is a greater chance of a worldwide water shortage than the metals continuing to drop, it just isn’t going to happen!

    Failed to mention that charts don’t tell you anything and can be made to look any way you want to try and digest them. Charts reflecting has been history against what is happening live right now are worthless pieces of crayola marked paper work.
     

    • “…and the Oreo keeps telling believable lie after lie…”
       
      He seems to be having a major problem with that.  Yes, he is still lying but fewer and fewer people are swallowing his BS than ever.  His ball of yarn is coming unraveled and both he and his entire staff are crawling around on the White House floor, trying to find the ends.  No luck so far, though.  It’s gotten to the point where even some of his lapdog media are starting to sidle away from His Exaltedness.  Well, except for the real idiots in that group, of course.
       
      In any unsuccessful con job, there comes that awful moment of clarity when the suckers become aware of all the BS and completely reject both the lies and the liar.  We seem to be entering that stage of the Great Obamunist Con Job.  Not that this is a huge surprise to any who frequent this site, though.
       

  13. The gov loves to have pms low so when it does go up they can say its up over 600% last 3 years from the lows. Hence the days when gold legs were chopped off at just $250 back in the y2k days. It should of been way over $1000 an ounce back then. An I remember when $5 silver was so cheap too seems like a dream. But as soon as the gov lets the lid of pms an it goes to $50 again you will see a huge massive mega sell of silver everybody will want to unload. And the gov will not have to manipulate prices this time when it get high in the $50 the people will do it for them. I dump all mine at $50 if they give me the chance again. HOW ABOUT YOU GUYS I KNOW YOU WOULD SELL???????????????????????

    • Depends on the timing.  I look at mine as insurance so at $50 i do not sell (though if you would pay me $50 today I’d be happy to make the arbitrage!)…  at least I feel that way about my core position.  I have been adding some “fun stuff” lately a la @XC-Skater, pandas and perth, a couple kilo coins, etc, stuff that in a year or two i’d like to flip for 1.2x the silver quantity.  That is not considered “core” to me and would happily be sold, and probably before $50.

    • When silver gets to $50 again, I’ll look at the conditions in place at the time before I make any decisions to Buy, Hold, or Sell.  I am of the opinion that the precious metals, and in particular, Silver, are at the rat-tail end of the world-economic-financial events whip.  They won’t move on their own, so much as react to the larger events in the arena.  I think we’ll need to watch the bigger picture for the tells.

    • Dang, what’s the point of getting out of silver at just $50/oz., whereas prices are destined to go much higher as a result of the pending silver mining extinction event that the USGS believes will happen by ’29? I’d expect massive accumulation to start taking place starting by ’20, just over 6 years from now. So, go sell your silver for $50/oz in ’19, when the mining cost probably finally makes it to that level, and the banksters thus allow it to get to that price. The banksters will gladly take your silver at that mining cost price, knowing that the big hoarding game is going to get started soon thereafter, in preparation for the big extinction event that’ll be just less than a decade away.

      The knock down that we’ve seen in the past year (AKA government price control) is perhaps intending to create immense frustration in weak hands (like Dang), who then sell out before the big hoarding game gets started. IGNORE THE ’09 USGS SILVER REPORT AT YOUR OWN PERIL. The realization of the impending extinction is arguably the only way that the government price control for silver is likely to end. Indeed it will likely take a real true major shortage (or reasonable expectation of an impending shortage that leads to hoarding), which would be likely after mining extinction takes place (or the expectation thereof), in order to bust the government price control. Until then, expect the price controls to continue, with silver likely spending most of the upcoming years of this decade hovering at or near the true production costs.

  14. The pms war is lost and I would give it back to them if they had the price at $50. Then after the 28% tax you have to pay to get rid of it. It real isn’t that much profit. Time to bail at $50. The war is lost an was lost even before it got started. Because they have the rule book an can make up the rules as they go. The govs mega banks have so much money on deposit right now they can almost rule the world. The can buy the stock market up an the pms down. The unemployment is up an the economy down. Taxes up an an everybody is in there bunker wanting to be safe in the ground.

    • If you made a million dollars and had to pay $280k back in tax you would be upset?  Expensive for sure, but still motivation to earn a profit.

    • @ Dang
      The pms war is los? Realy?!
      Just do not tell please about this the Chinese and Indians. Because they will die of laughter.

    • @Dang   “…Because they have the rule book an can make up the rules as they go.”
       
      They do make up the rules as they go, but, in the larger picture, our tiny little silver market isn’t a major focus of their rule-making.  Silver, given it’s tiny market-cap, just doesn’t really garner that much attention.  It’s much more an effect than a cause.  The US has alienated much of the rest of the world with it’s arrogant, greedy, financial hubris and that world is now responding with an ever-growing momentum of steps to unseat the Dollar as the world reserve currency.  Here in the US, there are but a tiny percentage of people who have even the slightest clue how miserable a real fall to banana republic status can be.  So, it is inside this limited perception that many see the range of financial options for prices of things like food, metals, stocks, and so on – a status quo, if you will…  but, consider the state of the world after a collapse of the dollar, whether this happens in a short two-week time period or over a two-year time frame.  Yes TPTB make up the rules, but there may well come a time when the rules already written for an apocalyptic time must be implemented.  If and when that day comes, I think it’s a safe bet that almost all of the bedrock assumptions under which we operate in day-to-day life today will change dramatically.  All I know is that, if and when that day comes, I sure as hell do NOT want to be in paper assets, and particularly those denominated in the US Dollar.  So, after the basic needs of food, water, shelter and defense are accounted for, where do you put what you have from there? When you think about it, what else of value can you hold without a counterparty to give you permission to put it to use?

  15. Speaking of the silver price an how low it can go it is actually at zero and over 28% over spot. At any time from past to present. Here is my theory. The price of silver has actually 3 prices. The worst to the best I will explain.
    1# Its worth zero to the industrial field an is to the investor. Its called ETF aka known as Electronic Toilet Float. or more simple words toilet paper. Its only purpose is to wipe you ace with. An the gov uses it as a pile of silver made of paper.
    2# The middle stuff here you buy it physical an get to hold it an kiss it an see it sparkle in your eyes as it keeps your heart warm with a feeling of true wealth that only god made. But it isn’t all yours an never will be unless you get the last number 3 form of silver?
    3# Here is the best silver to own an will always be worth over 28% of spot at any time. Its actually silver or gold that was bought with out letting the gov knowing you have it. It called under ground silver. If you went out an bought silver at over $9999 worth you had to fill out a 1099 to the gov tell them what you bought. But if you bought in smaller amounts your silver is clear an can be bought an sold with no taxes applied the 28%. as long as you don’t sell it to a dealer. But to friend or trade some body your clear.

  16. I recall it being “on sale” at $32, $27, $25, $23, $20, $19, $18 now $13… It still amazes me how many PM brokers, hyper blogs and we buy gold shops popped up near the top. Most of the blogs are gone now that they cant profit off traffic and most of the we buy gold shops have closed. There are less people buying and selling now than ever. The stagnated market needs a kick and I don’t mean more stories about how the supply is shrinking, which simply is not true. My local shops are happy to sell at spot at this point and don’t start with the “give me their number, Ill be happy to buy at spot”, many online refiners/brokers have coupons code for customers offering spot pricing.

  17. I can’t help but point out that not very long ago, a commenter who suggested Silver could drop to $13 would be soundly dismissed here as a Troll.
     
    The fact the possibility of $13 Silver is now going ‘mainstream” on SilverDoctors seems a good indicator that we are now at the ‘Despondency’ point on the chart.

    • The period of time from capitulation to depression is actually a time when I can still sleep at night and not have to have my shotgun at the ready due to social unrest breaking out in my neighborhood and the country.  If the forces that would drive our metals prices higher in a major way break out, the gain will be nice, but the consequences of the collapse-based issues that may inspire the price rise may make the gains bittersweet.  We’re sliding into a new world and a new normal for sure, but when my kids go out at night, at least today, I have a reasonable comfort level in knowing they will most likely make it home at night as we aren’t yet on a war footing in the streets.  When silver takes off and we are celebrating, there might be a different kind of ‘bombs bursting in air’ going on near us…

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