Silver: At which price to buy?
Silver has taken a breather since last April. The price has now corrected and many “weak”holders of the commodity have sold their holdings. Open interest (the total number of long and short positions in Silver futures contracts) has dropped by 50% since April of last year.
Unfortunately, silver will not go back down to the cheap level where I was able to buy boatloads of it in 1995 when I and three other traders at Phibro bought a little over $1 billion worth of the metal. But, the time is coming close when we will be able to jump back onto the band wagon.
Last year’s sharp decline chased many investors away from the market. But just as silver began to glimmer in my eyes in 1995, it has begun to look very shiny to me again today.
A Silver Bonanza in 2012
I believe silver will climb higher in 2012. And the drivers will be massive deficits, weaker paper currencies and the demand for hard assets.
I would not be surprised to see silver trade up to $75 over the course of the next year.
But before its ascent begins, the price must erase the technical damage done last year.
Long-term resistance for Silver stands at $36 an ounce. Once prices break above this level and hold, the sky is the limit and silver will once again act and trade like the precious metal that it is.
That’s when silver will once again become gold’s little brother.
How to Play the Market
There are many ways to participate in the next leg up in this exciting and volatile market. Be prepared to buy silver on a break above $36.
Silver options and futures are traded on the COMEX division of the CME. And there are silver stocks, such as Silver Wheaton (SLW), as well as silver coins and bars, which are available from reputable coins dealers and banks such as EverBank.
Silver promises to shine once again in 2012. Keep your eye on this precious metal because once it gets going it will not take any prisoners!
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- Silver To Average Lower Price In 2013 Than In 2012 But Demand For Silver Coins Is Soaring Globally: Silver Institute - April 25th, 2013
- Silver Could Reclaim $30/Oz In 2013 - Thomson Reuters GFMS - April 25th, 2013
- China Silver imports decline in March 25% y/y to 195.98 tons: Barclays - April 24th, 2013
- India, China governments cling to Silver stocks with no sales in 2012 - April 24th, 2013
- Silver demand seen rising in 2013 on industries, investment-GFMS - April 24th, 2013
- Silver coin investment demand in China surges industrial demand in India too - April 24th, 2013