Jon Nadler has some great info which may explain the poor performance - seems to me China is quite apt to ride this one out as I have sated before and I will state again. They are an industrialized state and they DO NOT want silver to rise. It does not make it easy to cost when your raw material costs keep rising.
Thanks to Jon Nadler for this info below: visit Kitco for the story.
Here is a finding that flies squarely in the face of rosy projections that China will –somehow-be the salvation for the silver market, owing to its putatively “insatiable” demand for everything. Read on. Standard Bank (SA) commodity market analysis issued this morning correctly points out that silver demand is heavily (60%) dependent on industrial offtake (along with investment participation by speculators). Since silver demand has been helped by the fact that China had become a net importer of the metal in the period of from 2008 to 2011, many have jumped onto the bandwagon that believes that which we mentioned above.
However, it turns out that, at the moment, that country is filling the approximately 1,400 tonnes of metal it needs to fill the supply/demand gap it faces by drawing down internal stockpiles rather than importing silver. There has been a sharp decline in SGE silver premiums (from $4 per ounce to about a tenth of that recently) and there is evidence that Chinese imports of the white metal have also declined.
Thus, the SB team concludes that while silver has scope to trade back up near $40 again, it might not do so unless China finishes de-stocking, and that the current quarter might not allow for prices much above the $35 level actually.
I have to say I agree - we appear to have peaked and a reversal is the most likely scenario rather than the upside. Does anyone see it any different? I have read other articles and studied charts and it just does not have volume or momentum to break 35 this quarter. As I said we may revise the temporary top to be reached in February and it certainly appears that was the case.
Cheers.
I don't know about all that. Nadler is one of the last 'pundits' I would base anything on. I stopped reading him several years ago - he writes way too much and with his supposedly clever titles makes me think he writes mostly because he has to put out a daily column . . . when really he has nothing of substance to say.
And I think the Silver chart, with its nice double bottom, looks bullish, possible very bullish.
-GZ
i hadn't even noticed that double bottom at 26.15, thanks for pointing that out GZ
Argumaents can be found for higher or lower prices. My counter argument is old and tiresome, but carries truth. Silver is the little sister to gold. Better in some ways because of affordability to the masses and its industrial usea. Money printing will continue giving the gold/silver bull legs. We are in the early stages of European bailouts. Greece is only the beginning. Gold in Euro terms shall go higher. Gold vs USD$ will go higher for the same reasons. Where gold goes, silver shall follow. As Gerald has said," Gold is the dog, silver is the tail". While this does not always hold true, the premise is sound.
Short term, a correction could happen and would just be a buying opportunity. Industrial uses by China continues. So what if they use stockpiles? They are using silver. Investment demand is what will drive silver higher IMO. We still have a ways to go. We will not go in a straight line so guess your entries and exits the best you can. Right now, a correction would not surprise me, but a run to 40 would not be shocking either.
Cheers! Lance.
Used to wonder about your eloquent style but now enjoy rather than question. I do know that Zheng is high on my list for intelligence and posts common sense. I trust the China connection from her. As a side i bought a mini silver contract just now @ 34.195. Not big play but will hold ad nauseum. Good luck Riley
Thanks Riley,
I am learning a lot from folks here. Nadler quoted a ripper yesterday. He quoted some guy who said that gold and silver are 'bearish.' If what we have had since January is a bear, I am looking forward to the bull. (TIC)
I just listened to Mike & Ike chatting about markets & they are talking about a correction in stocks. I think we are certainly anticipating a correction. I am just a bullion day trader and a long term physical bullion holder. Futures are out of the ballpark for me but I glean a lot of info from the great folk here.