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Glyn G
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Silver Has Broken Down

- Dan Dontrose - The Fundamental View

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.

Commented 4033 days ago

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Beginning of the headline :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... Read More

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