Posts Tagged ‘silver’

Dirty Tricks In the Silver Market

June 10, 2014

I started paying attention to silver prices about five years ago now, and bought my first silver in 2010 just as the price was hitting $30 an ounce, on it’s way to a high of a splash beneath $50.00. Blogs and websites sprung up speculating daily about price manipulation and speculating silver would easily rise to $100 an ounce if some shadowy entity were not manipulating the market. And they had some convincing arguments, the most persuasive to me being that JP Morgan and other manipulators simply didn’t have enough silver in its vaults to cover demand if everyone wanted their silver at the same time.

Then the price crashed. Quickly. Maybe it was slower than I remember. For the most part I sold the silver I had bought between 30-40 at 30-40 on the way down. I ended up even Steven. But that’s not exactly why I bought it in the first place. I wanted to make money. I wanted to buy an asset that would be worth more money when I sold it than when I bought it.

So, what did I do wrong, and what would I do differently if I did it again?

The answer is so deceptively simple it evades most people. Buy it low, sell it high. The thing that happened in this latest silver rush was no one wanted to sell high. We were all high on the almost narcotic effect of having the asset that is hot. What we forgot was that if you don’t sell the asset that is hot when other people want to buy it, you can’t make money.

This very week silver has been as easy to buy at around 20-22 an ounce as it has been in years. It’s not that much fun to buy an asset at a low because there’s no immediate gratification. You put it with the others and wait.

Is JP Morgan manipulating the price of silver? Hell if I know. Seems unusual to me that they wouldn’t, considering that’s their business. You probably would, too. I wonder if in the future, though, if it won’t be in their best interest to inflate the price of silver to some insane number. Quickly. And if they do that, this exact moment would have been the time you needed to buy all the silver you could to make money later. Volatility has been flatlined for a couple of years now. The one factor I see that makes me believe there won’t be any real rocket ride in silver prices anytime soon is that now everyone has it. The low prices haven’t done much to get silver out of the hands of all those people who bought it these past five years, and if you have it they have no real motivation to make it valuable again.

So, what would a reasonable expectation for silver be in the next five years?

I don’t see it above $50. I don’t think it’s in any of the power broker’s interest to allow it to rise above that level. I think there will be one more climb to fifty in the next two years. Probably a very rapid one. One so rapid that if you don’t already have it you won’t be able to take advantage.

Now, if that flash of upward volatility were successful in shaking the silver out of the hands of a lot of people who have too much for their own damn good, then i could see a later run, perhaps in the next five years, that might approach $100. But don’t feel bad if you take advantage of the chance to sell at $50.

Go buy now.


Dirty Tricks In the Silver Market

April 24, 2013

As a child I fantasized about having a sack full of jewels and gold and silver. I think that’s a rather common fantasy for children to have. 

As an adult I became more enamored with silver, and recently copper. Gold just seems too rich for my blood, but silver and copper have been precious to humans since the first time they were extracted from the Earth. The huge bull market in precious metals seemed to burst last Monday when gold and silver lost close to 25% of their value in four days.Those who never participated in the market seemed to be really happy. 

For the four years I’ve been following precious metals I’ve seen the world change quite a lot. Preppers and conspiracy theorists have become commonplace. I’ve seen some of the sites I initially went to for information about prices and availability information turn into virtual havens for lunatics and malcontents who seem to think the end is near.

The end of what I have no idea, but whatever ends they seem to think they’re ready for it. Sometimes it feels like they actually welcome the collapse of civilization. That seems foolish to me. 

After silver flirted with an all-time high at fifty dollars an ounce then slowly plummeted to 23 dollars today I lost a lot of interest, but since I hopped aboard the bandwagon when silver was at about $25 an ounce I have always wanted to buy it at that price, so I started checking out prices. Despite the spot price being 23 dollars no one on the planet was selling it for under thirty dollars. I called the coin dealer I have been buying from for four years now and he laughed me off the phone. he said I wouldn’t find any silver for sale for weeks unless I wanted to pay a ten dollar premium.

So I have found myself in the unusual position of hoping a commodity i own plummets further in price. I’m several years from even contemplating digging my silver from out of its resting place, so I say let it fall, and let it stay low for a long time. Maybe enough people will lose interst that those who jumped on the bull when it was riding roughshod will sell of at a fraction of what they paid.

I love silver. The Silver American Eagle is one the most beautiful coins ever created. 


2010 American Silver Eagle

I hope in a few weeks to go out and pick up a few of these at discount prices.