Silver - WHERE TO NEXT
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Hi, thanks for viewing.
I just posted this because the chart is the definition of neutral on the 4 hourly chart;
The price is side-ways,
RSI is almost at the 50 mid-point,
MACD (not shown because I don't have sub) is right on the zero line as well.
So, I watch with interest to see what is next. I am a bit less stressed about the price of silver dropping of late - as demand is super high for physical, the price between futures contract silver and physical have become unrelated in the last few weeks, but most of all - you price it at any level you want on the futures markets - but you have very little chance of getting any in your hand. Soon, you will have no chance - the supply chains will be frozen, many silver mines are already in care and maintenance due to you-know-what. This will also mean no secondary market for holders - but I don't think anyone buys silver because they have a short time horizon. The markets will re-open again and the world will be a different place. Then we will see how things look.
In the meantime, there are a lot of interesting developments to cover. Developments like;
- The Fed buying bonds, debt, and equities,
- The Fed balance sheet increasing my trillions a week,
- Helicopter money,
- Mine closures,
- The growing near-term potential for the failure of paper futures markets bullionstar.com/blogs/ronan-manly/comex-cant-find-a-400-oz-bar-for-its-new-400-oz-gold-futures-contract/. The article relates to 100oz gold futures - not silver. However, if one should buy 100oz futures contract for physical delivery you are being told - I think quite explicitly - that you should not expect physical delivery. What you are primed to expect as settlement is in fact a promissory note. A 25% claim on a 400oz gold bar held in LBMA vaults. Why? It seems that COMEX has no 100oz bars. They are offering contracts on 25% shares of 400oz bars that are likely in London (who is willing to bet that air routes will be open in a month?). Its all very strange.
I was expecting the gold and silver price to be more volatile, even to significantly sell-off - as happened in the last recession. It's not all about futures contracts manipulation - people and businesses (maybe even some hedge funds too) will be forced to liquidate collateral (although I am aware of two hedge funds carrying around 10% of their long positions in gold. Actually both invest in GLD ETF - not physical metel) during a recession.
Again, its not silver. But a number of bullion suppliers have announced that the physical bullion prices have become unrelated to prices from COMEX. I tend to believe the suppliers, as they deal in finite metal (supply chains are freezing up while bullion demand it through the roof - I have heard levels between 477 and 1000% above 2019 demand levels in NZ, Australia, Singapore, and the US) and the futures contracts are not similarly limited. So, they can drive the prices down on the futures markets as much as they like - they will still have to settle some contracts with a physical delivery (I am aware most futures contracts are not for physical delivery). It is looking increasingly likely that physical settlement will not be possible at the end of the month. That realisation - effectively a default - will likely lead to a gap up re-pricing.
Ok, check ya later.
I just posted this because the chart is the definition of neutral on the 4 hourly chart;
The price is side-ways,
RSI is almost at the 50 mid-point,
MACD (not shown because I don't have sub) is right on the zero line as well.
So, I watch with interest to see what is next. I am a bit less stressed about the price of silver dropping of late - as demand is super high for physical, the price between futures contract silver and physical have become unrelated in the last few weeks, but most of all - you price it at any level you want on the futures markets - but you have very little chance of getting any in your hand. Soon, you will have no chance - the supply chains will be frozen, many silver mines are already in care and maintenance due to you-know-what. This will also mean no secondary market for holders - but I don't think anyone buys silver because they have a short time horizon. The markets will re-open again and the world will be a different place. Then we will see how things look.
In the meantime, there are a lot of interesting developments to cover. Developments like;
- The Fed buying bonds, debt, and equities,
- The Fed balance sheet increasing my trillions a week,
- Helicopter money,
- Mine closures,
- The growing near-term potential for the failure of paper futures markets bullionstar.com/blogs/ronan-manly/comex-cant-find-a-400-oz-bar-for-its-new-400-oz-gold-futures-contract/. The article relates to 100oz gold futures - not silver. However, if one should buy 100oz futures contract for physical delivery you are being told - I think quite explicitly - that you should not expect physical delivery. What you are primed to expect as settlement is in fact a promissory note. A 25% claim on a 400oz gold bar held in LBMA vaults. Why? It seems that COMEX has no 100oz bars. They are offering contracts on 25% shares of 400oz bars that are likely in London (who is willing to bet that air routes will be open in a month?). Its all very strange.
I was expecting the gold and silver price to be more volatile, even to significantly sell-off - as happened in the last recession. It's not all about futures contracts manipulation - people and businesses (maybe even some hedge funds too) will be forced to liquidate collateral (although I am aware of two hedge funds carrying around 10% of their long positions in gold. Actually both invest in GLD ETF - not physical metel) during a recession.
Again, its not silver. But a number of bullion suppliers have announced that the physical bullion prices have become unrelated to prices from COMEX. I tend to believe the suppliers, as they deal in finite metal (supply chains are freezing up while bullion demand it through the roof - I have heard levels between 477 and 1000% above 2019 demand levels in NZ, Australia, Singapore, and the US) and the futures contracts are not similarly limited. So, they can drive the prices down on the futures markets as much as they like - they will still have to settle some contracts with a physical delivery (I am aware most futures contracts are not for physical delivery). It is looking increasingly likely that physical settlement will not be possible at the end of the month. That realisation - effectively a default - will likely lead to a gap up re-pricing.
Ok, check ya later.
Nota
Looking for swing low re-test at $11.614 to hold before we take off. I am seeing an explosion of videos online about COMEX offering contracts on gold (in LBMA vaults) and silver that has very little chance of being in vaults in sufficient amounts. Instead of settling contracts for physical deliver with paper promissory notes. These notes can then be swapped to meet clients' physical delivery requirements. I'm not sure about you, but if I request physical delivery of bullion, I do not want a promise printed on a piece of paper. This is simply a way to avoid settling contracts for physical delivery with USD (which would cause immediate outrage). This should be very very interesting to watch unfold.Nota
Even though I expect the price to re-test the swing low, I have no chance of adding any reasonably priced silver to my holdings. Premiums have blown out (to 50%+) on minted items and other sources remain closed. Despite my bullishness on silver, I am unwilling to pay that much premium.Nota
The blue shaded area is where I thought support was before the drop... wrong. I'm watching $16.37 as resistance - and hoping I am wrong again.Nota
Hoping for a dip to $22.50 - $22 so I can add more silver - because the gold/silver ratio is again above 80:1. After this correction, I expect silver to continue higher - following gold (gold to $2200 in 2020 and higher longer-term) on about a 2:1 % basis (gold goes up 5% and silver 10% - same proportionally on the dips though). I am targeting (fingers crossed) a G/S ratio of 45 and below to sell silver and convert of gold for roughly a 2x gain in gold weight terms (I have more silver bought well over the 80:1 ratio - up to 120:1). I see gold in terms of accumulation of weight not in terms of $ value - although it is fun to watch the $ price.
Nota
If we get to 45:1 and the silver price is 550/OZ (plausible) that matches up with a gold price of $2250.A silver price of $70 at 45:1 would match up with a gold price of $3150 which is a plausible value as per BofA and Goldman between now and the end of 2022 (their targets are $3000+). That would be a good trade - silver to gold - as long-term I see gold a lot higher.
Trade attivo
Still hanging in there...
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