As I’m sure you have noticed, silver has been “hitting” it’s head on $20 for the last couple of days. This is reminiscent of when gold kept bonking its noggin’ on $1,000. Look at the following chart, and note the price points as noted by the red arrows:
Although I analyze technical charts all the time, it is easy to see above how gold repeatedly attempted to definitively pierce $1,000. And when it did, it hasn’t looked back – and won’t.
Now let’s look at silver, once again noting the price points with the red arrows:
Twenty dollar silver is a significant psychological threshold. In the past couple of days, $20 silver has captured all metal investors’ attention as it has skirted over $20 during the trading day – only to close below the threshold.
Said quite simply, silver is preparing to do exactly what gold did – definitively pierce a major psychological barrier. It’s on its fifth try, just as it took gold five attempts. Three consecutive closes above $20, and stand back. There is minor technical resistance at $20.47 and that is it until $49.50.
Why might silver fail? For only one reason, there is a huge disincentive for silver to make this breakout – primarily the big institutions with massive short positions on the COMEX. They yield tremendous power, coupled with their bullion bank friends and cigar buddies at the Fed and Treasury.
All Things Considered – John’s Commentary
Action to take: Keep adding! Just as there are those waiting for gold to fall back to $1,000 in order to buy – don’t be one of those waiting for silver to go back to $16.00 before you buy more. I would be extremely surprised if we will ever see that price point again. Load up on as much silver as you can comfortably handle. Yes, it’s heavy. But weight is your best friend as the price per ounce rises.
What to buy: US 90% pre-1965 coin (3.9% premium) and 100 oz. COMEX deliverable bars (4.4% premium) are your very best buys – shipping and insurance included on 200 oz. or more. I discourage buying high premium silver items, as you will not recoup the additional outlay as spot moves up.
Quote of the Day: “The problem with socialism is that eventually you run out of other people’s money.” – Margaret Thatcher
