Silver, How Low Can You Go?
Well, it is becoming increasingly obvious that the price action driven mostly by the large banks (read JPM) and the commercial short-sellers on the COMEX are not yet done pushing silver to the downside. As silver analyst Ted Butler said in a recent commentary…”In silver, the price action has been so poor that every day the phrase “the beatings will continue until morale improves” plays in my mind. I’m left with the impression that the commercials [short-sellers] are deliberately making silver look so bad in order to extract every last drop of blood from the speculative selling stone.”
How long will this price pressure continue? Not forever! One thing is for sure, the price action in all the precious metals is as distant from a free market as one can possibly imagine.
Note the 2-year silver chart below. We are much closer to a bottom than we are to a top. Two principal indicators to watch. First, notice the top green line. This is the RSI (Relative Strength Index). When it has approached 30 in the past, it has indicated a bottom and buying opportunity. Second, the silver price has come down to the $27.50 range four times in the last two years. Each time it has been a bottom and each time has been a buying opportunity.
All Things Considered – John’s Commentary
Silver was hurt more than gold yesterday. It dropped 63.3 cents (2.07%) to close on the Comex at the discount price of $29.95. This is the second time in a month that silver has broken below $30.
However, don’t get greedy! $30 silver is cheap by any measure. By holding on for a dollar or two, which may or may not come, you may miss your chance. Think for a moment, would you rather own $30 silver when it hits $50 again, or not have the silver at $50 because you were trying to get that last dollar and missed it?
Quote of the day: “All that is necessary for evil to triumph is for good men to do nothing.” – Edmund Burke
