Silver: Buy, Hold Or Sell? Update #22

IMG Auteur
 
 
Published : November 30th, 2011
608 words - Reading time : 1 - 2 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...

 

 

 

 

Your independent Swiss asset manager 


THE TIMELESS PRECIOUS METAL FUND

THE TIMELESS ENERGY FUND

THE SIERRA MADRE GOLD AND SILVER VENTURE CAPITAL FUND



NOVEMBER 30 , 2011



Silverinstitute



Silver/Ounces in US$

Buy Date

Amount/oz.

Buy Price

Total (USD)

Price Today

Value Today

November 15, 2002

10'000.00

4.54

45'400.00

Total

10'000.00

4.54

45'400.00

32.16

321'600.00

Profit

276’200.00

Profit (in %)

608%

OUR LONG-TERM RECOMMENDATION

BUY

OUR SHORT-TERM RECOMMENDATION

HOLD/BUY



1980 to 2011: From bear to bull









In 1980, the price of one ounce of silver reached $50. Today, the purchasing power of the US dollar is substantially less than in 1980. The price of one ounce of silver would have to rise to $ 135 to reflect the value of the US dollar thirty years ago.


The long-term picture of the silver price









The bull market of the silver price started towards the end of 2002. On the way from $ 4.02 to the recent high of $ 48.42 (an increase of 1,100%), several significant corrections took place, the most severe one in 2008 when the silver price sank by 56% only to jump 440% to a new high since the bull market started. “The bull market is not over. However, at present, a correction seems to be overdue.”, we wrote in March. It is time to consider re-entering the market (if you have sold).








“Extremes never last but no extreme is an absolute extreme and there is no guarantee that the extreme of 2006 will actually be repeated.”, we wrote in our last report. The 2006 peak was in fact surpassed in March 2011, followed by a sharp correction.









In the past, excluding 1980, it would have paid off to play the extremes, always assuming that one can buy back at the right moment which is far from easy. A long-term investor may feel better simply remaining invested as he believes that prices will eventually go much higher.



The medium-term picture of the silver price



Critics of technical analysis include well known fundamental analysts. For example, Peter Lynch once commented, "Charts are great for predicting the past." Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."








Fundamental Considerations: THE RISING SILVER DEMAND


Silver is unique. Its natural beauty is legendary. Its range of applications is exceptionally broad. As a precious metal, it has been a source of human adornment since the beginning of time. Such as a component of fine tableware, appropriately called silverware. As a light-sensitive element, it has revolutionized preservation of memories in the form of photographic images. More recently, its unique properties comprising of anti-bacterial qualities, corrosion resistance, malleability, ductility, reflectivity and conductivity have opened new possibilities for a myriad of other industrial applications.


The demand that pushes the silver price higher








World Silver Demand in millions of ounces (Source: World Silver Survey 2011)



Implied Net Investment demand, industrial demand and demand for coins cause the silver price to increase. Without it, the silver price would never have performed as it did. Industrial demand and demand for coins and medals are expected to grow further.



The Gold / Silver-Ratio





The gold/silver ratio has been steadily declining since its high in 1990 and reached a recent low early of this year when the silver price just about touched $50 an ounce. Since then the ratio has rebounded almost 30 points. This ratio may well move lower as the silver price is poised to recover from its oversold level.



Silver is again our preferred precious metal!


 

 



<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Peter Schiff Warns Of CRASH: ‘Everybody Is Going To Get Wiped Out!’
08 DecThe Recusant
"Schiff also said no one knows when this is going to happen for sure, only that it will happen." Peter has been warning of the next crash for years...
Meet The World’s Most Powerful Bitcoin Backers
07 Decsonora69
Why run a business or work for one when you can mine bitcoins for the price of the servers and electricity? The higher the price of bitcoin, the mo...
What Now?
04 DecDoom
Mathematically, doubling down is an amazingly powerful strategy...until it isn't. http://professorconfess.blogspot.com/2017/11/doubling-do...
The Flat Earth Society Responded To A Tweet By Elon Musk: ‘Thanks F...
03 DecS W.
I put the Flat Earthers in the same category as those who believe there is a God, a Heaven and a Hell.
Whipping-Post Politics
02 DecMr. Gnawbone1
I couldn't agree more, Keillor's dismissal was a bridge too far, but it is reflective of the fear, by Boards of Directors across the US, guiding ...
The Flat Earth Society Responded To A Tweet By Elon Musk: ‘Thanks F...
30 Novprljr1
The majority of Humans are ignorant. Private central banking is a prime example of what the majority will swallow as a working financial syste...
Bitcoin’s Inconvenient Truths: The Silence Is Deafening - Dave Kran...
30 Novstew temby
Dave I agree with your analysis but there are a maybe a couple of outstanding differences. First, the BTC community may reject the derivative rig c...
Why It's Important to Define Money Correctly
29 Novkevthorne
A quote: "Money is gold, and nothing else" - J. P. Morgan, 1912. There is an important definition within that statement. Nowadays, many repea...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS