India is the world’s main market for silver, and demand shrivels a bit during the May – June time-frame.
As a result, the silver price usually swoons, and frustrated investors can make irrational statements about this mighty metal.
It’s just a seasonal swoon, like an ocean tide change. The silver price tide will come back stronger than ever, because demand from the Hindu religion is cyclical and inelastic.
The bottom seasonal line: Eager gold and silver price enthusiasts should expect a major rally to begin in about two weeks, and continue for several months.
Silver has carved out a cyclical bottom formation and appears to in a solid uptrend. There is massive physical demand supporting this move. For the last three-plus years, the precious metals market has been in a trading pattern in which you were supposed to sell the rallies. Now silver – and the rest of the sector – appears to be in a pattern in which all dips should be bought/accumulated.
The black line on the chart below shows that silver started to go parabolic until the bullion banks “stunted” the move on the day that the Government released the infamously phony non-farm payroll report.
They did us a favor by slamming silver because parabolic moves are the “death” of a bull market.
I also suggested that silver would have a healthy pullback and begin to head higher again. T
he blue line shows a more “healthy-looking” bull market trend developing.
Silver will be the gift that keeps on giving in 2015…
Silver has carved out a cyclical bottom formation and appears to in a solid uptrend. There is massive physical demand supporting this move. For the last three-plus years, the precious metals market has been in a trading pattern in which you were supposed to sell the rallies. Now silver – and the rest of the sector – appears to be in a pattern in which all dips should be bought/accumulated…
The US dollar has staged a massive rally against most currencies in early 2015, but it has fallen sharply against gold in the same time frame. Why is that?
The simple answer is that India, and its gold-focused citizens, will dominate the world in the coming decades, and I’m predicting that dominance will begin within 18 months.
As the year 2015 gets underway, the US dollar is almost in free-fall against the rupee. Only the actions of the Indian central bank are preventing the dollar from suffering an outright crash.
As good as gold & gold stocks look, silver stocks look even more spectacular.
There’s a bullish inverse head and shoulders pattern in play on the daily SIL-NYSE chart, and my immediate term target is $13.25, if SIL can close above $11.25 for two consecutive days.
This should be a spectacular year for enthusiastic silver stock investors.
With the new year now in full swing, Silver is one of the top performing commodities in 2015. After falling over 71% from its high of $49.82 in April 2011, to a low of $14.16 in December 2014, silver is up 16.3% in 2015.
Not only is silver up higher than gold in percentage terms, it’s nearly double gold’s performance of 9.3% in January.
Silver looks to be on the verge of a major new upleg, finally emerging from the past couple years’ ugly sentiment wasteland.
This beleaguered precious metal recently bottomed as futures speculators threw in the towel on their extreme shorting.
And while investors’ ongoing silver stealth buying continues, it’s been modest.
So there is vast room for capital inflows to accelerate dramatically as gold mean reverts higher.
Silver dropped 19.7% in 2014 after plunging a brutal 35.6% in 2013. Such dismal performance naturally left silver universally despised, the pariah of the investment world. But that is changing.
Silver is ready to run again, a very exciting prospect given the huge uplegs it is renowned for.
Paper has begun its collapse; it started with the Russian Ruble and will end with the US dollar. As paper collapses, Gold will rise and then go Parabolic!
All the world currencies are falling to Gold as Gold continues to expose the TRUTH of what is TRULY going on in the world of fiat paper vs. Gold!
The TRUTH is printing money leads to hyperinflation and much much higher prices in both Gold, and especially Silver as their respective ratio gets reset.
The TRUTH will set Gold & Silver free with a Parabolic rise in 2015!
After a MASSIVE ATTACK overnight, gold & silver SURGED higher today, placing a STRONG OUTSIDE REVERSAL!
Let’s head immediately to see the major data points for today:
Gold’s performance this past week vs. the yen was impressive to say the least.
Japan turned on the printing press and Gold broke out to new 1.5 year high relative the yen.
Gold, the great equalizer, will always expose the truth- and the truth is printing money leads to hyperinflation and much higher prices in both Gold and especially Silver.
The Silver trade of a lifetime is coming…
In the early 1970s silver went from “ho-hum” to “enthusiasm” to “wow, who would believe it could go to $6.40?” After the 2008 crash silver went from “going back to 5 bucks” to “enthusiasm” to “wow, who would believe it could go above $45?”
As a reminder, after silver rallied to the then astounding price of $6.40 in early 1974, it crashed back to $3.80 and then traded sideways for 2 years. Less than 3 years later it had briefly traded at $50.00, due to a combination of inflation, debt and deficits, political issues, conflict with the USSR, fear, a market corner, and dollar weakness.
After rallying to another “unthinkable” price of nearly $50 in 2011, silver crashed to about $18.50.
In another 3 -5 years, perhaps in 2017 – 2019, I expect silver will have rallied to $50, $100 or maybe $300 or more, due to a combination of multiple wars, unpayable debts, inflation, deficits, bailouts, bail-ins, massive “money printing,” inflationary expectations, QE, potential hyperinflation, considerable fear, currency wars, counter-party risk, political issues, derivatives, conflict with Russia, economic and dollar weakness, and the weakening or outright loss of the dollar’s global reserve currency status.
We know that financial television (and others) expect (hope) the S&P to rally and silver to collapse, but we must remember who pays the bills for financial television, buys the advertising, and supports the various fictions in our current economic and political environment.
The fundamentals along with sentiment cycles suggest that silver will rally for the next 3 – 7 years.
Gary Christenson from the Deviant Investor.com joins the SGTReport to discuss his new book ‘Gold Value and Gold Prices From 1971 – 2021: An Empirical Model‘. Gary’s carefully constructed model projects a Gold price of $10,000 by the year 2021 and a Silver price of $500 – $1,000. Gary notes that these numbers are based on simple mathematical projections using current levels of government spending which will undoubtedly continue unabated.
Gary’s conservative empirical model projecting $10,000 gold & $1,000 silver by 2021 does NOT even factor in the possibility of US debt default, Weimar-style hyperinflation of the Dollar or other dramatic economic catastrophes.
As the MSM, Wall Street and various so-called analysts waste time focusing on worthless and insignificant data, the price of silver is positioning itself for the coming TWO-STAGE RALLY.
The majority of the precious metals analysts discuss the revaluation of silver as it pertains to the amount of fiat currency in the system.
While this is a good determination (from past historical guidelines), it only deals with one part of the overall equation.
The second and maybe the more important factor… is the destruction of “PAPER CLAIM CHECKS” on physical assets.
Following on from last week when Iraq hit the headlines and the price of oil firmed up, gold was steady for the first three trading days. It seemed the shorts just held their breath and hoped Iraq would go away. But with oil prices up yet again Thursday a vicious bear squeeze followed after someone bought over 3,500 gold contracts, driving the price up to just under $1300. Once this level broke at 13.40 New York time, gold jumped a further $15 as stops were triggered.
Silver also responded dramatically, rising through the $20 level to $20.90 for a gain Thursday of 5%.
The price action and open interest this so far month is shown in the following charts and illustrates how record bear positions are being squeezed in both metals.
After the standard post FOMC metals smash that has occurred after 95% of the FOMC statement releases over the past 7 years never materialized yesterday, one had to wonder whether a short squeeze was imminent.
It appears the short squeeze is on as silver has shot through major resistance at $20 on the COMEX open, and after a quick retest of the level, is again shooting vertically higher with a last of $20.90, a 3 month high!
The silver COT data (yes, I know, manipulated…) is, as I read it, as bullish for silver as it was at the silver bottom last June. This suggests another good buy zone either just passed or will arrive very soon.
Many technical indicators for both silver and gold markets are deeply over-extended on the down-side and flashing “buy signals.”
Silver has dropped back to levels seen in 2008 and 2010, before the run-up in late 2010 – April 2011.
Is another big rally about to happen?
In his latest video update, Chris Duane explains why the most oversold markets make for the largest returns.
Duane makes the case for the fact that silver is poised to place LEGENDARY GAINS once the current correction is completed, and that now is the time to accumulate physical silver while the metal is out of favor by nearly everyone.
People marvel at the returns silver made from 2008-2010, but it is obvious that the next rally will blow that silver move away.
Is it possible that a substantial 2014 summer rally begins after the release of this Friday’s key jobs report? I think so.
I’ve outlined a rough scenario for summer rally enthusiasts on the daily silver chart below. I’ve suggested silver could move up to about $22.
Much higher prices are possible if Western world inflation and Indian buying increase significantly, and I think that’s exactly what’s going to occur.
Statistically, gold and silver prices closely follow each other.
But what is more important is the ratio between silver and gold and the trend of that ratio.
The 30 year gold/silver ratio chart reveals that the silver-to-gold ratio is currently priced at the low end of the range, long-term silver prices are gradually increasing relative to gold, and a price explosion could occur at any time!
We have well documented over the past few months the unprecedented flows of physical gold and silver being drained out of Western vaults and shipped East.
SD reader Ji Hai Shan, an American currently residing in China, has provided a boots-on-the-ground first-hand account which substantiates our recent claims that spiking silver premiums on the Shanghai Gold Exchange indicate a shortage of the physical metal in China.
“3 months ago, when I inquired about buying some more bars, they said that I would have to wait a month.
So, yesterday, I stopped by the shop and was told again that I would have to wait a month.
The affordable investment grade bars are in shortage.”
Ji Hai Shan’s first-hand account of the developing shortage of investment grade silver in China is below:
Everyone in the precious metals community is scratching their heads over the recent behavior of the price of silver. At the end of the day, the severely depressed price level can only be attributed to the extreme degree of manipulation and price containment activities of the Federal Reserve and the U.S. Treasury’s Exchange Stabilization Fund team (which is officed in the same building as the NY Fed).
Besides containing the upward price movement of gold and silver in order to support its effort to prop up the dying U.S. dollar, the question is, why is silver being hammered like this with Comex futures? Ultimately, I believe a severe shortage of unencumbered physical bars for delivery into India and Asia has developed. More on this in the next few days.
In the meantime, you can see from the 20-yr graph of silver that silver is, by far, more oversold than at any time in the last 20 years: