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Silver: Will it Drop to $ 10/ounce?

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Published : June 19th, 2013
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( 8 votes, 4.5/5 ) , 4 commentaries
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Category : Gold and Silver

Up-date N° 26 / June 18, 2013

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 22.20 222,000
Profit         176,400
Profit (in %)         369%

1980 to 2013: From bear to bull

24hGold - Silver: Will it Drop...

A drop of the silver price to $ 10/ounce is highly unlikely in view of the sharply rising National Debt in the USA but also in Europe.

To quote John Hathaway, manager of one of the most respected gold funds, a sharp rise of the gold and silver price is more likely:

"With gold and silver under continued attack from the mainstream media, John Hathaway warned King World News that we are at the point where global investors will be shocked as gold is quickly re-priced a jaw-dropping $1,000 (about $ 40 / ounce of silver) higher, taking gold and silver to new all-time highs.

Hathaway also cautioned that global markets are rapidly approaching a loss of confidence in central banks which will cause tremendous turmoil in the paper currency markets. Hathaway, of Tocqueville Asset Management L.P., is one of the most respected institutional minds in the world today regarding gold, and his fund was awarded a coveted 5-star rating."

The long-term picture of the bull market since 2001

24hGold - Silver: Will it Drop...

The bull market of the silver price started towards the end of 2001. On the way from $ 4.02 to the recent intraday all-time high of $ 48.42 (an increase of 1,104%), several significant corrections took place, the most severe one in 2008 when the silver price sank by 57% only to jump 441% to a new all-time high.

The bull market is not over! The silver price is in an oversold position, as shown above, which is far worse than in 2008 or in 2001. Such extremes have always been followed by strong movements to the up-side. After 2008, silver rose more than 400% while some gold and silver shares jumped 2,800% (First Majestic Silver).

What the PMO Indicator shown above clearly demonstrates: extremes will always be corrected. In fact, we had great sell opportunities in 2006, 2008 and 2011. On the reverse side, 2001 and 2008 were unique buying opportunities.

At present, we again have such a buying opportunity! This is not the time to stay on the side-lines. You have to buy now!

Should you rather buy gold or silver shares instead of gold or silver?

First, there are a few basic facts that one has to know:

  1. Gold and silver stocks are more volatile than gold or silver.
  2. It is hard work to select the right companies and to monitor them.
  3. You should know the Management.
  4. You should have a long-term view.

As most do not have the time to devote several hours a day

  • to employ a bottom-up selection process and fundamental, proprietary research to identify companies that are considered undervalued, based on growth potential and the assessment of the company's relative value, and
  • to seek exposure to overlooked and undervalued gold stocks across the world,

this work is best left to an experienced fund manager. The following chart reveals the risk and rewards of such investment:

24hGold - Silver: Will it Drop...

Silver sometimes outperform gold & silver shares, at times however gold & silver shares fare much better? Following some figures:

  • SILVER 2000 to 2011 (high): +1,104%
  • GOLD & SILVER SHARES 2000 to 2011 (high): +1,616%
  • SILVER 2000 to 2013: +448%
  • GOLD & SILVER SHARES 2000 to 2013: +532%
  • SILVER 2011 (high) to 2013: -55%
  • GOLD & SILVER SHARES 2011 (high) to 2013: -63%

Big companies or rather "juniors"?

  • Every big company was once a "junior"! See First Majestic Silver!

24hGold - Silver: Will it Drop...

  • Selecting the right "junior" is high risk. It makes therefore sense to choose a Fund that invests in "juniors" to diminish the risk.
  • To find out more, go to


To quote John Hathaway once more: "So from a contrarian point of view, the setup is perfect for the commencement of a huge upward leg that will take gold and silver to all-time highs."

How to invest:

Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so.

Disclaimer: The author's objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock.

Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock - or to use their own brains.

In our opinion, the best approach is to buy a diversified portfolio of stocks as represented in THE TIMELESS PRECIOUS METAL FUND or THE SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND instead of shares of only a small number of companies.

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Peter Zihlmann is an independant Swiss asset manager, who manages the Timeless Precious Metal Fund and the Sierra Madre Gold and Silver Venture Fund.
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The fact that this question is even being asked is disturbing -- especially to holders of silver coin like myself. Zihlmann does ask the question, throws up a chart, and quickly disposes of the question as not likely.

I hope it is not likely, but strangely many items from candy bars, basic food items and homes, are only 10% above their 1964 level -- the last time silver was in circulation as official United States money.

Zihlmann urges us to purchase silver now. The best course might be, not to sell anything, but to accumulate some cash in that unlikely event and purchase even more. Last year when silver was pushing $50 an once that question would have been met with laughter -- not now.
Rate :   7  -3Rating :   10
10% since 1964 ???? Wow that certainly seems to contradict my own experience. Can you site me some examples?
I wasn't alive in 1964 but I can remember back as far as 1977.

In Australia: 1977 / 2013

Candy Bar: 30c / $2.50
petrol (gas) per litre: 25c / $1.50
Milk per litre: 40c / $1.50
Loaf of bread: 50c / $3.50
Sydney home: $37,000 / $1m+
Family car: $5,000 / $42,000

This experience was outside the USA but I'm struggling to find anything as modest as a 100% rise, let alone a 10% rise. Have things really been that stable in the US?

with the exception of milk
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I don't live in the US either, I live in Canada but do travel to the US at least a couple times a year for weeks at a time traveling through several states which allows me to get a good feel for how expensive things have become there as well as at home. Jim C is dreaming if he thinks that many items are only 10% above their 1964 levels. Homes are well above this 10% mark. Houses that sold for $11K or $12K in 1964 are well over $70K (even post bubble) which is no where near 10%. Basic food items like a loaf of bread even in Walmart is still above $1.50 which is ten times higher than it was in 1694. Milk, flour, peanut butter, tomatoes, you name it, all basic food stuffs are 10 to 50 times more expensive even when you shop at Jim C's favorite store Walmart.

I don't know where it is that Jim lives (except for that fantasy world in his head) that he quotes such low prices. He has expressed that he is a prepper so he may have squirreled away all sorts of items and possibly the last time he bought something (1979?) prices were that low. In the real world the rest of us live in we know that everything has gone up well beyond 200%.

I was alive in 1964 and recall what we used to pay for everything from apples to zucchini's.

Rate :   4  1Rating :   3
the only way I can explain what Jim C. wrote is that he is saying that in terms of silver, prices for basic items are 10% above their 1964 levels. Meaning for say 10oz of Silver in 1964, you could buy Item A, while today it would cost 11oz silver. This is closer to reality. I cannot say whether this is true or not, I did not look it up, but if this is the case, then silver would have about the same value now as it did back then.

So going by this theory, in 1964, silver was somewhere around $1/oz. Today it is at $20/oz, factor 20. Could you buy a certain item back then for 1/20 of the US$ price than you can now? That would be interesting to know.
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the only way I can explain what Jim C. wrote is that he is saying that in terms of silver, prices for basic items are 10% above their 1964 levels. Meaning for say 10oz of Silver in 1964, you could buy Item A, while today it would cost 11oz silver. This i  Read more
odanez - 6/20/2013 at 11:59 AM GMT
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