Silver May Be Headed Toward $26.50+ Per Ounce Soon

Post Update: 10.14.2010 By CK Hunter: Copyright Chase Kyla Hunter 2010
Since August 11th 2010, [60 days] silver has soared nearly 20%, gaining over $4.00 per ounce in price. I was writing about silver in January, telling readers to begin accumulating as much in hard silver bullion as they could. Those who have taken my advice are most likely sitting pretty by now. I predict silver prices to spike up to at least $26.50 per ounce before correcting back to around $17.52 and hovering in the trough for awhile.

The entrance to an underground gold mine in Vi...

[ Earlier this year I wrote…]  January 2010

Is $100 per ounce silver
 possible in 2010?

These types of sudden upward moves in silver usually happen after a gradual correction downward, and they tend to take the inexperienced metal investing public by surprise. Silver recently corrected back down to about $15 per ounce, from a high of around $18.50, but any new twist in the global economic meltdown i.e. for example, the recent collapse of Greece’s economy, could set off one of those hard to predict “upward price escalating chain reactions” that could very suddenly elevate the price of silver bullion almost overnight. Silver prices do not always follow gold in tandem.

Folk wisdom says to buy and accumulate silver bullion and scrap silver in all small denominations while the price is still depressed at under $20 per ounce. The $20 per ounce price range represents a “psychological threshold” and once silver passes that mark, all bets are off as to how high it could go. Buy silver bullion and hold it. That’s the recommendation.

Here are several supporting news articles and links:

1 oz (.999) Fine Silver Buffalo Round – Best Buy

Best Price $19.95
or Buy New $19.95

Market Nuggets: Silver Remains Higher After Hitting 30-Year Peak14 October 2010, 1:22 p.m.
By Allen Sykora
Of Kitco News
(Kitco News) — Silver remains higher after hitting its strongest level in 30 years. The metal has been rallying with gold lately on expectations for U.S. quantitative easing and weakness in the U.S. dollar. Silver got an added boost in early London trading from options-related buying, says Afshin Nabavi, head of trading at MKS Finance. Further gains came when buy stops were hit. These are pre-placed orders activated when certain chart points are reached. The market then backed down from the psychologically important $25-an-ounce level, with Comex December silver peaking at $24.95. “It’s been very whippy to say the least,” Nabai says. A key for Friday will be remarks from Federal Reserve Chairman Ben Bernanke as market participants watch for further clues on whether the Fed undertakes further stimulus, Nabavi says. In the meantime, he puts the key near-term chart support around $24 for both spot metal and futures. December silver was up 53.8 cents to $24.47 an ounce at 12:51 p.m. EDT (1651 GMT).By Allen Sykora of Kitco News; asykora@kitco.com14 October 2010, 12:46 p.m.
By Allen Sykora
Market Nuggets: Comex Gold Pares Earlier Gains On Profit-Taking

(Kitco News) — Comex gold has pared much of its earlier gain as some traders sell to exit long positions and book profits. Release of September FOMC minutes earlier in the week confirmed the thinking of many that further quantitative easing is coming, says Kevin Grady, gold trader on the Comex floor with MF Global. Gold since ran higher, with the December futures earlier Thursday hitting a $1,388.10 peak that is a record for a Comex most-active contract. It has since backed down to $1,374.20 as of 12:27 p.m. EDT (1627 GMT), although this was still up $3.70 for the day. “’Right now what is happening is you have some ebbs and flows in the market,” Grady says. “The market is up so high and so fast that you’re seeing some profit-taking.”

By Allen Sykora of Kitco News;

14 October 2010, 9:18 a.m.
By Allen Sykora
Market Nuggets: Comex Gold Continues Rise As Market Participants Flee Dollar

(Kitco News) — December gold futures hit a peak of $1,388.10 an ounce, a record for a Comex most-active contract. “It’s clear the U.S. dollar is under a lot of pressure,” says one trader. “It really is a market where people are running away from the U.S. dollar and looking for some sort of safe haven, and they view gold as a safe haven.” Gold seems to be moving with equities lately, he adds. “The equity market yesterday was reasonably positive about the view that quantitative easing is going to help the economy recover, and that has been a good reason to give assets a lift across the board,” he says.

By Allen Sykora of Kitco News;

14 October 2010, 9:17 a.m.
By Allen Sykora
Market Nuggets: Barclays: Longer-Term Gold ETP Investor Interest Remains ‘Sticky’

(Kitco News) — Barclays Capital says investors are showing a willingness to stick with positions in gold exchange-traded products. “Some very modest profit-taking has emerged from physically backed ETPs, with total holdings falling by 1.6 (metric tons) yesterday, but overall, the longer-term interest remains sticky, with the total metal held in trust just 10 (metric tons) shy of the peak set at the end of September,” Barclays says in its daily research report. The bank says silver prices “continue to ride on gold’s coat-tails, but the ETP interest is more impressive.” The bank reports silver ETP demand rose by 40 metric tons to a “staggering” 14,148, including inflows of 389 so far for the month.

By Allen Sykora of Kitco News;

14 October 2010, 8:34 a.m.
By Allen Sykora
Market Nuggets: Gartman: Technicals “Mandated That We Increase Our Positions Yesterday”

(Kitco News) — Newsletter writer Dennis Gartman says whereas he had been looking for gold to make a correction, technical-chart conditions Wednesday nevertheless “mandated that we increase our positions yesterday” and “we did so.” He says in his daily report: “Not to have done so would have been worse than holding out for the inevitable correction.” Furthermore, he points out that gold in both dollar and sterling terms is rising. “Gold is rising not because the U.S. dollar is falling but because investors globally are dismayed by their currencies generally,” he says. “Governments are racing each other toward some devaluationist no-man’s-land. Gold is the harbor of choice as this war is waged.”

By Allen Sykora of Kitco News;

14 October 2010, 8:34 a.m.
By Allen Sykora
Market Nuggets: SEB Sees Potential For Short-Term Correction In Gold

(Kitco News) –Swiss bank SEB offers caution about potential for a short-term correction in gold while maintaining a bullish long-term view. The metal hit another all-time high Thursday on another wave of dollar weakness, SEB says. “The mix of uncertainty, slumping currencies, exceptionally low interest rates and retail investor hype adds more and more fuel to the fire,” SEB says. However, the bank also says, softening jewelry demand, record speculative positions, stabilizing ETF holdings and reduced worries about European nations with debt issues may limit the upside in the short term. “The main upside risk lies in the dollar,” SEB says. The greenback has been hurt by expectations from another round of quantitative easing, but this is “beginning to get fully priced in,” SEB says. “We believe that temporary dollar rebounds in combination with longs covering positions or taking profits could offer buying opportunities going forward.” The bank says its longer-term strategic view “remains bullish on distrust in currencies and economic uncertainty even though the view has moderated somewhat due to the almost uninterrupted rally since the end of July.”

By Allen Sykora of Kitco News;

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