Hi-Ho Silver Silver Charts

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Hi-Ho Silver
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Latest McHugh Silver

Here is a link:

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1-5.gif

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Aronnax
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Both?

Thanks for accommodating -- is there a way to insert both the chart AND the active link in the post? It IS easier to see on the slightly bigger original -- though I tend to try to recreate charts on my own platform so tee better, zoom out, etc.

Vypuero
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silver and gold broke UP fairly hard just now

silver up to 36.6 and gold 1555

Sockeye
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HI HO SILVER Fantastic Thread

HI HO SILVER

Fantastic Thread you deserve every hat tip given to you on this one. 

Come on guys pass out some more Hat Tips here.

I am learning a lot from you.  I could learn more if you could post a detail chart of the most recent area on the charts.  The details of what is happening is hard to see.  My eyesight is failing me.  I am going blind as it is with macular degeneration. 

And by the way HI HO.  You are one beautiful woman. 

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Sockeye
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Hi-Ho Silver

Beautiful awesome graph.  maybe mix them up a little depending on what you are showing.  I like some closeups too.   When you do some of the big long range graphs it is nice to get a close up so one can read the prices and see the chart with the lines up close.  If you make comments about the action then it really helps to see the action up close.  other wise the comments lose their impact. 

God Bless You for these charts.  Absolutely wonderful. 

thanks again and tons of hat tips to you.

some of your charts have those little red upside down triangles.  what do they represent ?

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silverbleve
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great charts, great commentary too Hi-Ho

This is great info as well

Hi-Ho Silver wrote:

Buying Dips in a SECULAR BULL market has the advantage that over TIME, one's ill-timed buys will be ironed out because in the long run the metals will continue to run up....UNLESS the Gov't/Politicians do the CORRECT thing...which I somehow doubt...lol

btfd! I wish someone had told me this when I first got started. Hi-Ho deserves some hat tipping and the eyes and ears of any new trader coming to the site. Thank you hi-ho for all this good stuff.

Hi-Ho Silver
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Silver Update

Silver is looking quite strong here by breaking thru the 36.50 resistance. Only problem is there are many other congestion-resistance points above if the 36.50 SUPPORT holds and price decides to move up.

240 minute: Shows silver trying to break/stay above the trendline

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1-7.gif

120 minute: Shows that it is testing Support of 36.50 AND sitting at the upper end of the tight channel it has been trading in.

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1a-3.gif

60 minute: Closer up on the channel

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1b-2.gif

30 minute: Shows price consolidating AT THE HIGHS which is usually BULLISH.

EDIT: Below is confirmation that one should BUY DIPS. Would you be BRAVE enough to buy each of these legs DOWN on the 30 minute chart?  If not, you better learn to do so!

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1c-1.gif

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Hi-Ho Silver
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re: Sockeye

Thank you for your kind comments.

The little Red triangles seen on some charts are SELL signals generated by the software.  Green triangles are Buy signals.

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ChicksDigIt
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silver will break out

silver will break out topside!

Hi-Ho Silver
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Here is an example why one shouldn't Short metals

Confirmation of Fractional Gold Lending--if more news comes out from other CB's WATCH OUT!

Here is a reason why one shouldn't Short metals:

Dennis Gartman, publisher of the daily commodity market review The Gartman Letter, writes today:

"One interesting facet of the gold market has made its way to our desk, courtesy again of our good friend, John Brimelow, who had it brought to his attention by Mr. Chris Woods of The Greed & Fear Report. (We normally steer very clear of newsletters with titles such as these, but Mr. Woods has shown to be quite wise when it comes to the gold market over time, and if Mr. Brimelow respects his work, so then shall we.)

"Mr. Woods noted that the Vice Governor of the Belgian Central Bank said that 43 percent of the bank's remaining gold reserves have been lent out. Despite our antipathy to the argument that GATA has been making for years that much of the world's reservable gold has been put out on lending programs, this number caught our attention. Neither we, nor John, know of any central bank that has admitted putting this much gold out on loan. What then of the Bank of France, or the Bank of Italy, or the ECB itself? Suddenly our interest is piqued. Bill Murphy, where are you?"

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Hi-Ho Silver
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30 minute Channel Reversal. Will the Lower channel line hold?

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1-8.gif

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Peter Schiff - US Set to Default, Silver Headed to $200
With gold back above $1,550 and silver firming, today King World News interviewed Peter Schiff, President of Europacific Capital.  When asked about the mining shares Schiff stated, “Well I think they are throwing these stocks away.  I mean gold is less than $20 from a record high, yet if you look at the HUI (Gold Bugs Index) a 16% rally is what it would need just for the index to get back to where it was when gold was less than $20 higher than its current price.  You look at some of the big gold mining companies, Barrick Gold is trading at 10 times forward earnings, 10 times earnings! 

I remember when that stock was 30 to 40 times earnings, yet here we have a huge bull market in the price of gold and the PE’s have compressed to 10.  I think anyone who believes there is a bubble in precious metals, all you have to do is look at the PE’s of these mining stocks and realize this isn’t a bubble at all.  This is a huge wall of worry and everybody is more fearful than greedy in the gold mining market.”

When asked about year over year increases in inflation in the UK with butter being up 57%, bread 50%, potatoes 103%, tomatoes 63%, cauliflower 82.6% Schiff remarked, “Inflation is the money that the Fed is printing that is causing all of these prices to rise.  The Fed has been printing money like crazy.  The Federal Reserve has been printing enough money to buy all of the net new issuance of US government debt...Central banks around the world are also printing money to prevent their currencies from rising against the debased dollar. 

So the world is in a money printing fest and the result is that prices are rising, mostly for commodity prices.  The Fed is going to be announcing today what it’s going to do with interest rates once the official policy of QE2 or dollar debasement comes to an end.  Will they replace it with a QE3?  I think the Fed will try to deny that, but I believe that they will do it because without the continuous printing of money interest rates will rise sharply and this phony bubble economy that’s built on a foundation of cheap credit will come tumbling down. 

The Fed does not want that and so the Fed will print more money which means bread prices, butter prices, all of those prices that you mentioned are going much higher, including the price of gold and ultimately the value of the companies that mine the gold.”

When asked how long the little guy can stand up against the massive year over year inflation with Brent Crude oil up 53.2%, diesel 45.8%, car insurance 74.7%, cotton uniforms 66% to 77% and oranges up 67% Schiff responded, “It’s going to be harder and harder, especially since more and more of the little guys are unemployed and struggling beneath their own debt...

“We (the US) are the grandaddy of all sovereign credit problems and our crisis is going to be too big to hide beneath a bailout or to kick down the road.  The IMF is not going to step in with loans to the United States government.  The IMF is getting its money from the US, and of course we are getting our money from China.  So when we fail, there is no way out.

We’re going to have the same problems as Greece.  The reason that Greece can’t pay its bills is that interest rates are rising and the Greeks don’t have the money.  Well, the same thing is going to happen in America.  When interest rates eventually rise, we can’t afford to pay because we’ve borrowed so much...And unless we can find new buyers of our debt, we’re going to have to default.”

When asked about gold and silver in that environment Schiff replied, “They’ll go straight up.  That’s why you want to buy your gold and silver before that atmosphere.”

Regarding silver specifically Schiff had this to say, “I think anything in the low $30’s represents a pretty good entry point for people to buy...Once we go through $50...I see silver going to $200 an ounce.  I own a lot of silver personally because of that outlook.”

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murphy
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@Hi Ho

Fantastic posts and thread! Keep it coming. Always been a chart novice but with your help am getting a tutorial lesson. Thanks much. Many hat tips.

Hi Ho Silver! Hat tips away!!

Hi-Ho Silver
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Silver Update 23 June

I created new cobwebs on the charts today.  36.00 seems to be an important support level as shown by the juncture of PRICE and TIME on the 240 minute:

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1-9.gif

There are a few different important channel options at the moment. TIME will tell which is most important. I've highlighted the one that is working now in the 120 minute:

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1a-5.gif

The 60 minute chart below shows more clearly the current channels. You can see 36.00 is important.

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1b-3.gif

Iif 36.00 fails, then 35.80 is support, then 35.40:

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1c-2.gif

Here is one last look at the 240 chart. Note the bolded trendline channel. Looks like we will head back down to the Lower channel line. IF WE DO, then will will not only break down through a pennant formation, but to NEW LOWS.

IF we break UP out of the channel (ie yesterday's HIGHS), then we MAY have confirmation that the correction is over.

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1d-1.gif

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Hi-Ho Silver
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Silver Is And Remains The Best Investment Opportunity Of Our Lif

Excellent Silver Commentary:

http://goldharvest.blogspot.com/

Silver Is And Remains The Best Investment Opportunity Of Our Lifetime

How many times did Bumbling Ben Bernanke say "uh" or "um" while answering questions at his press conference today?  Watch it.  I swear that "uh" and "um" were every other word out of his mouth.  The guy is freaking clueless!  Princeton professor?  Is it too late for his students to get a refund? 

I fell asleep listening to him...[no, really, I did].  The economy is going to get better because Ben Bernanke says it is going too?  Unemployment is going to improve because he says it is going too?  What fool believes this jibber-jabber?  Ben Bernanke has been 100% wrong about everything he has "predicted".  E-V-E-R-Y-T-H-I-N-G!!! 

Bernanke must go
By MARK WEISBROT 
The problem with rewarding incompetence and failure in high places is that even a well-regulated financial system — which we are still very far from achieving — cannot serve the public interest if the chief regulators don’t do their jobs. Secrecy, lack of accountability, and incompetence — these are weapons of mass destruction for America’s economy.

Enough of Bumbling Ben's blah-blah...if you are reading this blog, you are already well aware of this mans incompetence...

Of course Gold and Silver were pressured after the "genius" gave his pep talk to prove that he is "on the job"... and the poor results of all his efforts are "temporary"...

Let's take a look at Silver today.  What are the prospects for Silver moving forward from here?  The following an assortment stories and essays I have been collecting since late May:

Silver Should Be $150 Today
By Eric King, KingWorldNews.com
King World News interviewed one of the top ranked money managers in the country, Dr. Stephen Leeb, Founder of Leeb Capital Management.

Stephen Leeb:
...Another critical metal, silver, which the Chinese have been accumulating is vital. Vital for building out anything resembling solar energy. You really cannot produce solar without silver...so silver really becomes a critical metal. What are we doing with silver? We raise margin requirements on the commodity exchanges and we think we’ve solved the silver requirement.

...We are stuck in a world of resource scarcity and unless we figure out a way around this we won’t even be able to build out renewable resources...and if we are not careful, sooner or later the Chinese will control most of the silver.”

When asked about the seriousness of the silver situation Leeb stated, “I think it’s desperate, literally. I’m using that word in a well-measured way. I think when you look at Japan right now in the wake of that horrible nuclear accident, Japan is on record as saying that they are going two ways with their energy situation. They are going to try to conserve, and that leaves renewables. Well we know they are very limited in terms of wind, why? Because of the rare earth situation, they can’t get those high temperature rare earths from China.

That leaves solar and in order to really build out solar in any meaningful way you need silver, and silver becomes a very, very critical metal. Yes it is, silver is an extremely special metal as you said Eric...You need it across the board in military applications, in electronic applications and especially in my view of the world, building out renewable energy.”

When asked where silver is headed in terms of price Leeb responded, “I could just look at it from a monetary point of view, forget about all of the industrial applications. The ratio of silver to gold in the world is about ten to one, maybe seven and a half to one, above and below ground if you look at reserves. So as a monetary metal you could make a case that silver should already be no more than a ten to one ratio with gold.”

When asked with the ten one ratio putting silver $150, is that an outrageous price for silver today Leeb responded, “No it isn’t, it’s not at all outrageous. Silver at $150 is in no way outrageous. I’m not counting the critical applications in the industrial and renewable areas.”

Hi-Lo Silver

By: Neeraj Chaudary, Investment Consultant and Hemant Kathuria, Managing Director
In nominal dollars, silver peaked at roughly $50/oz in 1980. But in inflation-adjusted terms, silver would have to reach $131/oz just to get back to its 1980 high. And that only counts inflation to the present day. With The Fed seemingly determined to debase the US dollar for the foreseeable future, the ultimate destination for a new inflation adjusted high becomes hard to estimate.

Of course, no market moves in a straight line. Recent gyrations should remind us that silver can be a wild ride, with movements often exacerbated by possible market manipulation. But in our view, the moves in the silver market over the last two months do not invalidate our long-term outlook. For those who can stomach the thrills, silver remains a means to simultaneously gain protection from dollar devaluation while harnessing the benefits of global economic growth. The big boys may push and pull the market to their own temporary advantage, but they can't alter its fundamental direction.

Silver to move towards $50, reach nominal all time highs
Commodity Online
Because silver has been so undervalued for so long with a gold/silver ratio averaging north of 50 for the past century, most silver produced in recent decades has been consumed by industrial purposes and there are actually much larger inventories of gold available above ground today. Most likely we will probably see the gold/silver ratio overcorrect to the downside, possibly down to 10 or lower. Only 10 times more silver has been produced in world history than gold so a gold/silver ratio of 10 is actually a very realistic possibility. This means those who own silver will likely more than quadruple their purchasing power from current levels this decade, while Americans with savings in U.S. dollars lose all of their purchasing power.

COMEX registered physical silver inventories have declined 30% over the past six weeks down to 28.8 million ounces or just $1 billion worth of silver. A major shortage of physical silver is developing. A COMEX default is likely coming in the near-future as those holding futures contracts demand physical delivery and COMEX can't deliver. This could cause an explosion in silver prices, possibly to $100 per ounce overnight.

Silver Shift Shows Defensive Bent
By Alix Steel
NEW YORK (TheStreet) -- A significant decline in levels of registered silver suggests major investors are taking a defensive stance when it comes to the metal.

There are two kind of inventories on the Comex -- registered and eligible. Registered is available silver not yet spoken for. Eligible is silver that investors have purchased, but is stored by the CME for them, otherwise known as taking phsyical delivery.

Since the beginning of 2011, the amount of registered silver has fallen almost 38% with a steep drop coming in mid April. Registered silver now stands at 28.7 million ounces as of June 8th while eligible silver has risen 23% to 72 million ounces.

Part of the explanation for this shift was that Scotia Mocatta, one of the banks that holds the Comex' silver, reclassified a large portion of their silver from registered to eligible, which means more silver was being taken off the shelf and being claimed by investors.

This shift occurred when the silver price was at $43.26 and continued as silver rallied to nearly $50 an ounce, which means investors might have been scared of supply crunch and grabbed the metal while they could, leaving less silver in the marketplace for everyone else.

"More and more people are taking delivery of the product," says Phil Streible, senior market strategist at Lind-Waldock. The silver futures market is also in backwardation, meaning that the most current month trades higher than future months. Backwardation often indicates that investors are worried about an immediate supply crunch.

Mark O'Byrne, executive director of Goldcore, a bullion dealer, says the small amount of registered silver is dangerous because if a "tiny fraction of those in the futures decide to take delivery, there is the potential to default." If the Comex can't make good on their commitments, O'Byrne predicts there would be a huge rush into the physical metal or allocated storage and out of paper silver. He also wonders if the steep and aggressive margin hikes silver saw in May, which led to a more than 30% correction in the silver price, were a way of the Comex shaking out investors to prevent them from taking physical delivery.

650 Years of Silver Prices
This is a 650 year graph of silver prices and silver/gold ratio.
[Silver is cheaper today than you can even imagine!]

Silver Preparing For Another Shock And Awe Move
By Eric De Groot
Money flows reflect a bullish setup despite the negative headlines and growing pessimism towards silver.

Open interest continues to decline as the weak hands are flushed. This action is consistent with paper operations in which the weak hands are flushed in an environment of headline fear.

Accumulation by strong hands has achieved statistical concentration. Statistical concentration tends to precede tradable bottoms.

The only hitch in the setup at this point is retail money. Retail money with its tendency to be concentrated on the wrong side of the trade near inflection points remains relatively neutral as of June 7th. Short side concentration by retail money would galvanize the bullish setup. Watch for it in the coming weeks.

Silver’s next move has the potential to be “shock and awe”. Smart money is buying long contracts hand over fist. This type of concentrated buying has not been seen since late 2008. The concentrated buying of 2008 foreshadowed nearly a doubling and quadrupling in price by early 2009 and 2011. In other words, the money flow setup foreshadowed a ‘shock and awe’ run that few experts saw coming.

Silver Will Trade Like an Internet Stock to the Upside
Eric King, KingWorldNews.com
King World News interviewed one of the most street-smart pros in the resource sector, Rick Rule Founder of Global Resource Investor.

Rick Rule:
“The interesting thing about silver is that it doesn’t respond to fundamentals very well in the sense that most silver that’s produced, is produced as an adjunct to mining other metals. What you are seeing is a slight increase in pure silver supplies as a consequence of the high price bringing production in place at the same time that you are seeing capital constraints in the base metals industry constraining the byproduct supply of silver.

Investment demand for silver has been extraordinarily robust. Both James Turk and Sprott Money have indicated that on a dollar for dollar basis, demand for silver bullion is outpacing demand for gold bullion...It suggests that the silver demand relative to gold demand is extraordinary. And ironically as a consequence of fabrication, silver supplies are lower than gold supplies with demand much, much higher. That would seem to be supportive of a higher silver price to me.”

The Case For Silver
By Prieur du Plessis
To me the most important factor to watch in the silver market to get a lead where the silver price is heading is the open interest in derivatives in silver on Comex. The commitment of traders is given on Tuesdays. In the graph below I plotted the open interest (futures and options combined) with the closing price of silver the week prior to the announcement of the open interest. Amazing stuff! The week before the silver price plummeted in the closing week of April, the open interest fell by 24 000 contracts equal to 120 million ounces of silver! Somebody made big bucks at the expense of others.

What the relationship suggests is that when the open interest is trending upwards you should be buying silver and conversely, when it trends down you should cut your longs and if you are brave enough you can even short the market with some confidence. The current situation is a clear bottoming of the open interest and that, together with increased interest in physical silver interest is indicating to me that the current bounce in the price of silver is likely to be extended.

The 2011 Silver Quiz
by Jeff Clark, BIG GOLD
If you’re a silver investor, or are concerned about the recent selloff, you may find the following data very compelling. It provides an inside track on the market and will certainly make us all more knowledgeable investors.

4) Silver represented what percent of global financial assets at the end of 2010?

1.7%
0.7%
0.07%
0.007%

D. In spite of last year’s record-high prices, silver is, by any account, a miniscule portion of the world’s wealth.

The ratio’s high occurred in 1980, reaching 0.34% of financial assets. Silver as a percentage of global assets would have to grow over 48 times to match the record. It is true that many more paper assets exist today than 30 years ago, but the renaissance in silver will continue to increase its portion of worldwide assets.

At the close of business on the CRIMEX today:

The registered CRIMEX Silver inventory rests tonight at 27.72 million oz...an all time low.  Silver Open Interest in the front silver delivery month of July is 33,656.  These contracts, at 5000 ounces each, is the equivalent of 168.28 MILLION ounces of Silver.  First Notice Day of intent to take delivery of a July Silver contract is one week from today.  Ray Charles is phoning in the supply versus demand shortfall to the CFTC as I type this.

No matter the diarrhea that drips from the lips of our bumbling Fed Chairman, Silver is and remains the best investment opportunity of our lifetime.  Accumulate! Accumulate! Accumulate!

Want to Buy Gold or Silver Today?

"Dramatically cuts the costs for gold investors..." Financial Times

"Particularly cost effective..." Capital magazine, Germany

Get a FREE gram of GOLD or a FREE ounce of SILVER at BullionVault here...

How many times did Bumbling Ben Bernanke say "uh" or "um" while answering questions at his press conference today?  Watch it.  I swear that "uh" and "um" were every other word out of his mouth.  The guy is freaking clueless!  Princeton professor?  Is it topo late for his students to get a refund? 

I fell asleep listening to him...[no, really, I did].  The economy is going to get better because Ben Bernanke says it is going too?  Unemployment is going to improve because he says it is going too?  What fool believes this jibber-jabber?  Ben Bernanke has been 100% wrong about everything he has "predicted".  E-V-E-R-Y-T-H-I-N-G!!! 

Bernanke must go
By MARK WEISBROT 
The problem with rewarding incompetence and failure in high places is that even a well-regulated financial system — which we are still very far from achieving — cannot serve the public interest if the chief regulators don’t do their jobs. Secrecy, lack of accountability, and incompetence — these are weapons of mass destruction for America’s economy.

Enough of Bumbling Ben's blah-blah...if you are reading this blog, you are already well aware of this mans incompetence...

Of course Gold and Silver were pressured after the "genius" gave his pep talk to prove that he is "on the job"... and the poor results of all his efforts are "temporary"...

Let's take a look at Silver today.  What are the prospects for Silver moving forward from here?  The following an assortment stories and essays I have been collecting since late May:

Silver Should Be $150 Today
By Eric King, KingWorldNews.com
King World News interviewed one of the top ranked money managers in the country, Dr. Stephen Leeb, Founder of Leeb Capital Management.

Stephen Leeb:
...Another critical metal, silver, which the Chinese have been accumulating is vital. Vital for building out anything resembling solar energy. You really cannot produce solar without silver...so silver really becomes a critical metal. What are we doing with silver? We raise margin requirements on the commodity exchanges and we think we’ve solved the silver requirement.

...We are stuck in a world of resource scarcity and unless we figure out a way around this we won’t even be able to build out renewable resources...and if we are not careful, sooner or later the Chinese will control most of the silver.”

When asked about the seriousness of the silver situation Leeb stated, “I think it’s desperate, literally. I’m using that word in a well-measured way. I think when you look at Japan right now in the wake of that horrible nuclear accident, Japan is on record as saying that they are going two ways with their energy situation. They are going to try to conserve, and that leaves renewables. Well we know they are very limited in terms of wind, why? Because of the rare earth situation, they can’t get those high temperature rare earths from China.

That leaves solar and in order to really build out solar in any meaningful way you need silver, and silver becomes a very, very critical metal. Yes it is, silver is an extremely special metal as you said Eric...You need it across the board in military applications, in electronic applications and especially in my view of the world, building out renewable energy.”

When asked where silver is headed in terms of price Leeb responded, “I could just look at it from a monetary point of view, forget about all of the industrial applications. The ratio of silver to gold in the world is about ten to one, maybe seven and a half to one, above and below ground if you look at reserves. So as a monetary metal you could make a case that silver should already be no more than a ten to one ratio with gold.”

When asked with the ten one ratio putting silver $150, is that an outrageous price for silver today Leeb responded, “No it isn’t, it’s not at all outrageous. Silver at $150 is in no way outrageous. I’m not counting the critical applications in the industrial and renewable areas.”

Hi-Lo Silver

By: Neeraj Chaudary, Investment Consultant and Hemant Kathuria, Managing Director
In nominal dollars, silver peaked at roughly $50/oz in 1980. But in inflation-adjusted terms, silver would have to reach $131/oz just to get back to its 1980 high. And that only counts inflation to the present day. With The Fed seemingly determined to debase the US dollar for the foreseeable future, the ultimate destination for a new inflation adjusted high becomes hard to estimate.

Of course, no market moves in a straight line. Recent gyrations should remind us that silver can be a wild ride, with movements often exacerbated by possible market manipulation. But in our view, the moves in the silver market over the last two months do not invalidate our long-term outlook. For those who can stomach the thrills, silver remains a means to simultaneously gain protection from dollar devaluation while harnessing the benefits of global economic growth. The big boys may push and pull the market to their own temporary advantage, but they can't alter its fundamental direction.

Silver to move towards $50, reach nominal all time highs
Commodity Online
Because silver has been so undervalued for so long with a gold/silver ratio averaging north of 50 for the past century, most silver produced in recent decades has been consumed by industrial purposes and there are actually much larger inventories of gold available above ground today. Most likely we will probably see the gold/silver ratio overcorrect to the downside, possibly down to 10 or lower. Only 10 times more silver has been produced in world history than gold so a gold/silver ratio of 10 is actually a very realistic possibility. This means those who own silver will likely more than quadruple their purchasing power from current levels this decade, while Americans with savings in U.S. dollars lose all of their purchasing power.

COMEX registered physical silver inventories have declined 30% over the past six weeks down to 28.8 million ounces or just $1 billion worth of silver. A major shortage of physical silver is developing. A COMEX default is likely coming in the near-future as those holding futures contracts demand physical delivery and COMEX can't deliver. This could cause an explosion in silver prices, possibly to $100 per ounce overnight.

Silver Shift Shows Defensive Bent
By Alix Steel
NEW YORK (TheStreet) -- A significant decline in levels of registered silver suggests major investors are taking a defensive stance when it comes to the metal.

There are two kind of inventories on the Comex -- registered and eligible. Registered is available silver not yet spoken for. Eligible is silver that investors have purchased, but is stored by the CME for them, otherwise known as taking phsyical delivery.

Since the beginning of 2011, the amount of registered silver has fallen almost 38% with a steep drop coming in mid April. Registered silver now stands at 28.7 million ounces as of June 8th while eligible silver has risen 23% to 72 million ounces.

Part of the explanation for this shift was that Scotia Mocatta, one of the banks that holds the Comex' silver, reclassified a large portion of their silver from registered to eligible, which means more silver was being taken off the shelf and being claimed by investors.

This shift occurred when the silver price was at $43.26 and continued as silver rallied to nearly $50 an ounce, which means investors might have been scared of supply crunch and grabbed the metal while they could, leaving less silver in the marketplace for everyone else.

"More and more people are taking delivery of the product," says Phil Streible, senior market strategist at Lind-Waldock. The silver futures market is also in backwardation, meaning that the most current month trades higher than future months. Backwardation often indicates that investors are worried about an immediate supply crunch.

Mark O'Byrne, executive director of Goldcore, a bullion dealer, says the small amount of registered silver is dangerous because if a "tiny fraction of those in the futures decide to take delivery, there is the potential to default." If the Comex can't make good on their commitments, O'Byrne predicts there would be a huge rush into the physical metal or allocated storage and out of paper silver. He also wonders if the steep and aggressive margin hikes silver saw in May, which led to a more than 30% correction in the silver price, were a way of the Comex shaking out investors to prevent them from taking physical delivery.

650 Years of Silver Prices
This is a 650 year graph of silver prices and silver/gold ratio.
[Silver is cheaper today than you can even imagine!]

Silver Preparing For Another Shock And Awe Move
By Eric De Groot
Money flows reflect a bullish setup despite the negative headlines and growing pessimism towards silver.

Open interest continues to decline as the weak hands are flushed. This action is consistent with paper operations in which the weak hands are flushed in an environment of headline fear.

Accumulation by strong hands has achieved statistical concentration. Statistical concentration tends to precede tradable bottoms.

The only hitch in the setup at this point is retail money. Retail money with its tendency to be concentrated on the wrong side of the trade near inflection points remains relatively neutral as of June 7th. Short side concentration by retail money would galvanize the bullish setup. Watch for it in the coming weeks.

Silver’s next move has the potential to be “shock and awe”. Smart money is buying long contracts hand over fist. This type of concentrated buying has not been seen since late 2008. The concentrated buying of 2008 foreshadowed nearly a doubling and quadrupling in price by early 2009 and 2011. In other words, the money flow setup foreshadowed a ‘shock and awe’ run that few experts saw coming.

Silver Will Trade Like an Internet Stock to the Upside
Eric King, KingWorldNews.com
King World News interviewed one of the most street-smart pros in the resource sector, Rick Rule Founder of Global Resource Investor.

Rick Rule:
“The interesting thing about silver is that it doesn’t respond to fundamentals very well in the sense that most silver that’s produced, is produced as an adjunct to mining other metals. What you are seeing is a slight increase in pure silver supplies as a consequence of the high price bringing production in place at the same time that you are seeing capital constraints in the base metals industry constraining the byproduct supply of silver.

Investment demand for silver has been extraordinarily robust. Both James Turk and Sprott Money have indicated that on a dollar for dollar basis, demand for silver bullion is outpacing demand for gold bullion...It suggests that the silver demand relative to gold demand is extraordinary. And ironically as a consequence of fabrication, silver supplies are lower than gold supplies with demand much, much higher. That would seem to be supportive of a higher silver price to me.”

The Case For Silver
By Prieur du Plessis
To me the most important factor to watch in the silver market to get a lead where the silver price is heading is the open interest in derivatives in silver on Comex. The commitment of traders is given on Tuesdays. In the graph below I plotted the open interest (futures and options combined) with the closing price of silver the week prior to the announcement of the open interest. Amazing stuff! The week before the silver price plummeted in the closing week of April, the open interest fell by 24 000 contracts equal to 120 million ounces of silver! Somebody made big bucks at the expense of others.

What the relationship suggests is that when the open interest is trending upwards you should be buying silver and conversely, when it trends down you should cut your longs and if you are brave enough you can even short the market with some confidence. The current situation is a clear bottoming of the open interest and that, together with increased interest in physical silver interest is indicating to me that the current bounce in the price of silver is likely to be extended.

The 2011 Silver Quiz
by Jeff Clark, BIG GOLD
If you’re a silver investor, or are concerned about the recent selloff, you may find the following data very compelling. It provides an inside track on the market and will certainly make us all more knowledgeable investors.

4) Silver represented what percent of global financial assets at the end of 2010?

1.7%
0.7%
0.07%
0.007%

D. In spite of last year’s record-high prices, silver is, by any account, a miniscule portion of the world’s wealth.

The ratio’s high occurred in 1980, reaching 0.34% of financial assets. Silver as a percentage of global assets would have to grow over 48 times to match the record. It is true that many more paper assets exist today than 30 years ago, but the renaissance in silver will continue to increase its portion of worldwide assets.

At the close of business on the CRIMEX today:

The registered CRIMEX Silver inventory rests tonight at 27.72 million oz...an all time low.  Silver Open Interest in the front silver delivery month of July is 33,656.  These contracts, at 5000 ounces each, is the equivalent of 168.28 MILLION ounces of Silver.  First Notice Day of intent to take delivery of a July Silver contract is one week from today.  Ray Charles is phoning in the supply versus demand shortfall to the CFTC as I type this.

No matter the diarrhea that drips from the lips of our bumbling Fed Chairman, Silver is and remains the best investment opportunity of our lifetime.  Accumulate! Accumulate! Accumulate!

Want to Buy Gold or Silver Today?

"Dramatically cuts the costs for gold investors..." Financial Times

"Particularly cost effective..." Capital magazine, Germany

Get a FREE gram of GOLD or a FREE ounce of SILVER at BullionVault here...

 

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Silver Buys Too Much Oil?

http://www.gotgoldreport.com/

Silver Buys Too Much Oil?

Excerpt #3:  Silver-oil exchange rate near 20-year lows, but ratio skewed by low silver prices last two decades. COMEX deliverable silver inventory falls below 30 million ounces. 

Silver Buys Too Much Oil? 

20110623oilSilverRatio
Oil/Silver Ratio, since 1990, weekly, using West Texas Intermediate Crude for oil, updated thru June 21.  If any of the images are too small or get cut off click on the top of them for a larger version or click on the title of this post for the full page.  

Someone must have written a piece just lately that says that silver prices will fall soon because it is overvalued relative to oil.  We received several comments along those lines over the past two weeks.  If one only had the last 20 years of data to go by, then that would be a reasonable conclusion as the chart just above shows.  

In 1960, back when U.S. coins still contained 90% silver, the average price of a barrel of oil came in at $2.91 and the average price of silver that year was $0.91.  That’s about a 3.2:1 ratio, so is silver overvalued today relative to oil with the ratio at 2.6 to 1?  

We would argue that for the last 20 years the price of silver was artificially low, and thus the ratio was skewed higher for that period.  We would not at all be surprised to see the oil/silver ratio moving below 2.0 in the not too distant future as the world comes to grips with tight silver supplies and intense demand for metal.  The point is with $100 oil, $50 silver is reasonable in our view if silver is adequately supplied relative to the demand.  

However, we don’t think that there is sufficient silver metal to meet the burgeoning demand for it.  Not as of right now anyway.  We’ll go out on a limb and predict that at some point between now and the end of this Great Gold and Silver Bull, the ratio might be at or less than 1:1.  Don’t bet the ranch on that one, but don’t be all that surprised by it either if/when it comes.  

COMEX Registered Silver Inventory

(On another note) Traders are buzzing because the overall inventory of silver in COMEX warehouses dropped below 100 million ounces just recently, a supporting factoid for tight silver supplies.  Perhaps a more powerful argument is the amount of silver in the COMEX that has a warrant issued for it (Registered silver), or the metal that could actually be taken delivery of by futures contract buyers as of a certain date, has fallen below a very, very low 30 million ounces. 

The other class of metal held in the COMEX vaults is the Eligible category, which can be thought of as metal stored at the COMEX, (which is) ‘Eligible’ for delivery, but not ‘Registered’ for delivery.  Eligible silver is theoretically deliverable at some price, but could also be earmarked by the owner of that metal for other purposes.  

A floor trader once told us, “Registered metal is deliverable to anyone.  Eligible metal is deliverable only to the owner of the warehouse receipt.”  It is more complicated than that, but not a lot and it’s a good way to think about it.       

Ed Steer, who writes a daily commentary blog for Casey Research and is a GATA director had the following chart in his Wednesday offering.  We believe the chart is from Nick Laird at sharelynx.com, and thus we have high confidence in the data. 

20110623oilSilverCOMEXinventory
As of Friday there were 27.97 million ounces of silver held in the Registered category of silver inventory at all the warehouses connected with the COMEX in New York.  The simple reason that the Registered inventory has been falling as the Eligible category has increased is because investors, users and speculators have been taking delivery of silver.  It is not at all hyperbole to say that the amount of available silver marked as available for delivery at the COMEX is now quite small relative to the 37,925 contracts which remained open in the July ’11 contract as of Thursday’s data.

As of Friday there were July contracts representing 189.6 million ounces open or more than six times the amount of silver metal that could be delivered into those contracts. (Ed. Note: As of June 21 the July open interest showed 33,656 lots open.)  

Not that we think that a COMEX default is imminent, we really don’t, but the odds of a failure to deliver keep rising, not falling as the data comes in.  More importantly, the falling COMEX inventory figures speak of tightening silver supplies, as does the continued backwardation condition in the futures strip.  Tightening supplies and strongly increasing demand is the very definition of a bull market, is it not?  

In bull markets we have but three possible positions as speculators.  Leveraged long (the most bullish stance, best taken when a bull market has been pummeled), long, and flat.  In a major bull market we cannot take the short side of the trade, except to hedge, but that is another story, for another time. 

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COMEX Silver Inventories Drop Another 578,853 Ounces

COMEX Silver Inventories Drop Another 578,853 Ounces

 
Another day, another significant reduction in COMEX silver supplies. This cannot be good for the cartel.
Watching the COMEX slowly bleed silver is almost like shooting a 15 point buck with a BB gun and watching it bleed to death.  The blood loss is slow and steady, but if it continues long enough the big buck is going down!

Tuesday saw three significant moves in COMEX silver supplies, which saw deliverable silver inventories drop to 27.7 million ounces.

COMEX Warehouse Silver Summary for 6/21/2011

*Brink's had an adjustment of 9,736 ounces from registered to eligible inventories
*Scotia Mocotta had a withdrawal of 330,618 ounces from eligible inventories
*HSBS had a HUGE adjustment of 238,499 ounces of silver from registered to eligible inventories. Someone decided their massive silver hoard is no longer for sale at current terms.

*Registered COMEX silver supplies dropped 248,235 ounces leaving only 27,720,803 ounces remaining.
*Eligible COMEX supplies dropped a net 82,380 ounces on the day down to 72,395,302
*Total COMEX silver inventory declined to 100,116,105 ounces.

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Harvey Organ

http://harveyorgan.blogspot.com/

The silver comex OI awoke from their slumber rising by  2735 contracts to 120,238 from 117503.

Mysteriously again the front options expiry of June saw its OI rise from 12 to 16 with zero deliveries yesterday.  Thus the number of silver oz standing will increase and no silver cash settlements were noted.

All eyes will be on the front delivery month of July and here the OI continues to contract at a very very slow pace with one 1 week before first day notice.  The OI for July is now at 33,656 dropping 1167 contracts.

Generally, we see a contraction in OI in the front month of about 4000 contracts as we approach first day notice.  The bankers are getting a little nervous.  They are hoping that  longs will not stand and thus roll to a future month.

It looks like there will be a raid tomorrow as the bankers try to influence the deliveries of silver. They are very fearful of the huge number of open interest still resting in the front silver delivery month of July.

The estimated volume today was tame at 51,684.  The confirmed volume yesterday was quite good at 74,.604.

Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
330,618  (scotia) 
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
 nil
No of oz served (contracts)  today
zero  (0)
No of oz to be served  (notices)
80,000  (16)
Total monthly oz silver served (contracts) so far this month
1,820,000  (364)
Total accumulative withdrawal of silver from the Dealers inventory this month
1,202,585 oz
Total accumulative withdrawal of silver from the Customer Inventory this month.
3,761,456oz

The silver vaults are active again today and it is all withdrawals. Again we witnessed no silver deposit enter the dealer.  The customer also did not have a deposit.

The comex notified us that there was a big withdrawal of 330,618 oz from the Scotia vault
of a customer. The dealer had no withdrawals.

There were two adjustments and in both of them silver left the dealer and entered the customer vault:

1. 9736 was adjusted out of Brinks  (dealer to customer)
2. 238,479 oz adjusted out of HSBC (dealer to customer)

The registered inventory thus lowers tonight to 27.72 million oz an all time low.

The comex folk for the 6th straight day notified us that there were no delivery notices filed.
Thus the total number of silver notices remain at 364 or 1,820,000 oz.

To obtain what is left to be served upon, I take the OI standing which mysteriously rose:  (16) and subtract out today's deliveries  (0) which leaves me with 16 notices or 80,000 oz left to be served upon.

Thus the total number of silver oz standing in this non delivery month is as follows:

1,820,000 (oz served)  +  80,000 oz (to be served)  =  1,900,000 oz.

We gained 20,000 oz of silver standing.

If the comex cannot settle upon a very tiny number of silver oz standing, what on earth will happen in July? stay tuned...

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Embry - Western Central Banks Don’t Have 30,000 Tons of Gold
With the Fed saying they will continue with stimulus and gold hovering at the $1,550 level, today King World News interviewed John Embry, Chief Investment Strategist of the now $9 billion strong Sprott Asset Management.  When asked about Peter Schiff’s comments earlier on KWN about the US defaulting Embry stated, “When you look at the financial condition of the United States at the federal level, at the state level and at the municipal level, to me I don’t see any way out of this.  There’s too much debt, interest rates are far too low.  If interest rates really reflected what’s going on, this risk in the debt and the risk of inflation, they would be hundreds of basis points higher and under that event the debt couldn’t be serviced.  So there will be some form of default.”

“I mean you can default by refusing to pay it like Argentina did a few years ago or you can default it by debasing your currency so aggressively that the debt becomes less onerous.  The ultimate result of it is a hyperinflation and I believe that is the most corrosive thing that can happen to a society, just observe what happened in Zimbabwe recently, it just destroys society.”  

When asked if he was surprised by the admission that the Belgian central bank had leased out 41% of its gold Embry replied, “It caught me a bit by surprise because I have been one of those individuals who has been adamant that the western central banks collectively have leased out or swapped a significant portion of their gold.  

When they (western central banks) report having 30,000+ tons, that is not true.  They may say they still maintain ownership, but they do not have it and they will never get it back.  It’s been sold, it’s gone into the market and it’s gone.  Ultimately I assume that gets settled up with cash, but for Belgium to admit it the other day, yeah I was taken a bit by surprise because it confirmed my thoughts on the subject.”

When asked if Jim Sinclair was right that there would not be an audit of US gold Embry responded, “I think he is.  To me if I don’t have anything to hide, come and get it guys, have a look.  So if the US is adamantly resisting an outside audit and it has for a long time, I think they are hiding something....

“I really don’t think there will be a voluntary audit of US gold because suspecting what I suspect, that would just blow the whole thing up immediately.”

When asked about the action in gold Embry had this to say, “I think the gold price is behaving very well given the fact there’s a lot of negativity from mainstream on it, and the fact that the anti-gold cartel is continually acting in the market to try to hold it under $1,550.  It (gold) just keeps popping up, it’s like something being held under water, eventually it’s going to pop above the surface and it’s going to take out $1,556 with gusto.  Then at that point we’ll have new closing highs very quickly.”

When asked about downward manipulation of the gold shares Embry said, “I think there is some outside force that is doing this.  I’ve heard speculation that there’s a government driven algorithm to actively sort of make the gold stocks look terrible and keep people away from them.  I certainly heard Jim Sinclair and Dan Norcini’s comments about the hedge funds driving gold stocks into oblivion. 

I don’t understand because eventually how do you cover these things?  The gold price is going to explode and these things are so cheap relative to the gold price.  There’s only been one other time in my career when they’ve been cheaper and that was in 2008 when we had the complete panic, and see what they did after that, stocks recovered smartly.  So they are going to recover again smartly, if hedge funds are doing this, they must have a death wish.”

When asked about the continued tightness in the silver market and if the manipulation can continue for much longer Embry stated, “You can’t, I don’t think you can.  I think that one of the most tell-tale signs is the declining inventory levels on the Comex and the LBMA.  One wealthy entity could come in and clean them totally out of every ounce of silver they have.”

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120 minute Channel getting clearer. Bounce coming?

http://i933.photobucket.com/albums/ad175/nirvs/Charts/1-10.gif

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