Silver Has Broken Down

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Published : April 02nd, 2013
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( 5 votes, 1.6/5 ) , 15 commentaries
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Category : Market Analysis

I’ve written recently about the important levels to watch for in silver and went so far as to state that a “breakout” day was close. It appears as though today is that breakout day but unfortunately for longs it looks like the breakout was to the downside. This could imply that prices are now going to trend downwards to test the old support or, as is often the case with silver, we may see a whipsaw move to reverse.  Bottom line, confirmation on the move is needed.

As I warned in another of my posts, it all comes down to how you treat silver.  That is, whether or not you consider it to be a monetary metal or an industrial metal.  I used the breakdowns in copper and platinum as my examples that foretold the potential breakdown in silver coming. 

With Platinum rallying hard today, it is yet to be seen whether this is merely a counter trend bounce or the start of a new rally in Platinum.  However, the breakdown in silver is what we are focussing on now. Here’s the latest chart using the SLV.  Short term, this could have ominous ramifications for the price of the white metal.  Silver needs to reverse hard or face testing the old lows of $26.15 fairly soon.

 24hGold - Silver Has Broken Do...

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Where is your foundation?.....Have you built on the shifting sands or THE ROCK......Can you even tell the difference. Will you be blown here and there by every wind?
So....get understanding and knowledge, makes wise decsions and stay the course.... by the way......the paper mkt. does not represent physical metals anymore. Check out Greg Mannarino's 10 minute video here at 24H on the disconnection between the two.
Rate :   5  2Rating :   3
THE ROCK? no I don't build on ex-wrestlers who think they can act.

I researched into property for 2 years before buying. For my entire life I watched property double in value consistently roughly every 10-15 years. I observed and absorbed information for a good year before buying into PMs. In both cases I probably got the wrong advice but at the time historically both had done very well. I made decisions and I stuck to them for as long as I could.

Please, show me a market where I can sell my physical for more than the paper price and I'll be there tomorrow. I've been buying and sometimes selling physical for 2 years now and the only time I ever paid a premium over spot was my first purchase from a dealer. I'd challenge anybody short of working in a pawn shop who gets physical cheaper than I do.
Rate :   2  2Rating :   0
Here is Armstrong's recent comment on silver:

His article sees silver possibly falling to a low of $23 to $17 before a rally back in 2017. I have a large silver investment and have no intention of selling any time soon. I've been thinking about buying more at the $26 level but may now wait, accumulate cash, and be ready to buy below $20. There are so many different commentators on this with so many diverse views that decisions are difficult. The key might be need. Holding is fine if one can afford it

Armstrong's take on the fall of the Euro and the rush into dollars is interesting.

Rate :   9  -2Rating :   11
Cudos to anybody who can buy a large amount of anything and afford to sit on it for 4 years.

In fact, well done to all of you for doing so much better than me at everything. Pretty soon you'll have one less loser to push around.

Rate :   0  3Rating :   -3
Precious metals are a long term investment and I intend to keep mine along with all my other tangable investments. The only thing I worry about are my paper investments that can be erased.
Rate :   4  5Rating :   -1
Sorry but to my ears thats the same old dribble that kept me seeing "buying opportunities" instead of selling when I wasn't under water. Over it. The sooner that talk stops the sooner people can make better informed decisions in my opinion.

As for "other tangible investments" yeh there's the family dump that the bank owns 80% of thats lucky to be worth the same as what we payed 6 years ago... and... nothing. Other than a pile of shiny crud at the bottom of my cupboard that bleeds a motgage payment in value on a daily basis.

Seriously, I'm offering a decent stash of gold and silver for somebody (anybody) to kill me quickly and painlessly.
Rate :   3  6Rating :   -3
Dom, i regret to hear that you are feeling as depressed as you are and could not agree with you more that the preponderance of views expressed on this site are more of the "same old dribble." Of those articles which actually deal with the precious metals, far too many are by those who have made of gold something more resembling a religion than the asset class that it is. Of those that have not, most all have concentrated their focus on what is happening in America; not seeing the interconectedness of all markets and having no understanding of the importance of capital flows. We hear only of how irresponsible the Fed has been. We never hear that when compared to the Japanese or European central banks, Bernanke's Fed seems down-right conservative. Why do we not hear that since March of '09, stocks have outpreformed gold? Why are we never presented with the view that all forms of money are fiat, but force fed articles proclaiming that only gold is money? Why has there never been so much as a single article demonstrating that of necessity, every single experiment with a commodity based currency has proved a failure?

That being said, let me try to make you feel somewhat better about your situation; though quite admittedly, knowing very little of it. i am going to take it that you are based in America. (If you were from Japan, you would be quite pleased with gold's price action over the last 6 months.) The good news that i have for you is that this is actually a matter of perspective and if your situation is such that you can keep on paying your bills without touching your stash, you are no more under water now than you were above water earlier. You still have the exact same amount of ounces as you did before. Its price is quite immaterial during all the moments between when you buy and when you sell. More good news is that the monetary system is irretrievably broken and so there will come a time when owning this asset class will pay off handsomely; assuming that the collapse of the monetary system does not result in a new Dark Age. If you are not able to hang on without selling, i would suggest that you consider selling only a portion of your stash based upon the following formula. Calculate just how much you require to tide you over until the end of September. Divide that sum by $400 and then sell that number of ounces. If things go as i believe them likely to, gold may be ready to rebound by then and could be down another $400 from where it is now. If that is so, you would then be able to buy back the same number of ounces that you sell. If i am wrong and gold only goes up from here, you would at least still have some of your stash left....Most importantly, you must understand what gold really is. It is for the most part a fairly useless commodity with very few industrial applications and so the available supply only increases. The primary function of gold is as an insurance policy that is good to have lest the monetary system collapse and we are living in a time when its collapse is a clear danger. As the inevitable demise of the system becomes more evident to a greater number of people, that insurance will cost a good deal more to purchase. And when you understand what gold really is, you will be happy that you have an insurance policy to see you through a catastrophe as severe as a currency collapse. And you will be happier still if you never need to make use of the policy.
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Thanks for your comments. I'm based in Australia and sitting on top of a property bubble that everybody thinks is "different here" when the rest of the world has dealt with theirs. Pretty much resigned to the fact that I'm just a sheep who is going to get fleeced, fleeced some more and then skinned for good measure. Oh and I lost my job 3 months ago so there won't be any treading water... just sinking like a stone. I want out, permanently.

Well if you are sitting on top of a property bubble and have unfortunately lost your job,then the best thing you can do is sell your property at market ASAP and get any job ASAP.
This will give you cash and freedom.
If needed, that freedom will allow you to move anywhere there are jobs and/or opportunities.

Investors,every single one of them,lose money on deals. Successful ones cut their losses and move on ASAP.
And they never take it personally. That is, they do not feel sorry for themselves.
Good luck
Rate :   5  4Rating :   1
I'm not an investor... I don't own shares or have a portfolio. I don't even have any superannuation (401K) due to being "self-employed". I bought PM's because I was seeing a 40% drop in my US dollar salary (in AU dollars) over the past 5 years. I tried to protect myself against the crashing value of money, at least as I saw it.

My property needs maintenance before selling which I can't afford of course. Selling now would mean that I'd been paying double what I would on rent for the past 6 years to make zilch at the end of it. Plus the 50K the government got for the privilage. The losses would be 2+ years salary right there.

As for jobs, I have a degree and tons of experience but my skills are not in demand. Especially since I've been "off the radar" professionally here at home I have no connections and no network. At 42 I'm not in a position to re-train out of my dead career path.

We are all responsible for our own destiny, this is all due to my own stupidity of course. For every person that makes a good investment there is a sucker on the other end. I get it. It's the idiots like me that keep other investors happy. Smart money is counting on fools like me to pick up our feet and try again, only to lose again. I don't really feel like making them any richer by doing so.

After spending half my working life and having basically nothing of value to show for it I'm not seeing any point in making the 2nd half of this journey.
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Well the PMs got slammed again yesterday.... I'm guessing I'll be feeding my bullion to the pigeons by years end. Unless of course I can manage to suicide before then. I'm done.

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I agree, silver may trend downwards to test the old support or we may see a whipsaw move to reverse. Some things never change.
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I agree. But is the author short in any way?
Lets say he is. I also think he should be very careful here as I am.
Easter holidays and likely very thin trade so I am on a breakeven stop.
I also believe there is no shortage of silver.
Silver is a monetary metal first and industrial second.
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Re: the shortage of silver. Hmmm! There is a gaping hole in the logic of much of the silver bug articles I read which worries me as someone who holds silver. You'll all be familiar with the argument. It says that the current combined industrial and investment demand for silver is only just met by the supply. Hence in such a small market, a small increase in 'investment demand' could lead to a huge upswing in price. My difficulty is that 'investment demand' is a misnomer in precious metals. None of us are in it to gain an income. Most of us are actually speculators hoping to cash in at a higher price. As such all that 'investment demand' over the last ten years represents future supply. At the right price we'll all sell out to take profits and flood the market crashing the price in the process. How strong we are in holding out for the right price appears to depend on how high we believe it should go.

Unless of course confidence in fiat money really does totally collapse in a hyper-inflationary event in which case we'll have to hope that people will accept silver as payment...or we'll all starve before we get to congratulate ourselves on investing in silver.
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Often thought of that same question myself. What happens when the price goes up and we all jump out at once? Though I would like to hold on to my silver until maybe Im ready to retire (haha!). Hopefiully the base value will continue to go up over time and I can use it as somewhat of a hedge.
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Often thought of that same question myself. What happens when the price goes up and we all jump out at once? Though I would like to hold on to my silver until maybe Im ready to retire (haha!). Hopefiully the base value will continue to go up over ti  Read more
samking73 - 4/4/2013 at 6:31 PM GMT
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