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Impact of the end of QE2 on Silver Price

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#1 Sat, Jun 25, 2011 - 4:31pm
dgoad
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Impact of the end of QE2 on Silver Price

Folks, trying to wrap my head around what to expect over the next few weeks and could use some seasoned advice...

Here are my assumptions:

  • QE2 completes at end of June
  • With the fed making up 70% the market for purchase of treasuries, increased interest rates are needed on subsequent auctions 
  • Interest on everything tied to treasuries starts to increase
  • Dow blows off
  • Increased possibility of a failed auction spooks everyone
  • ...

How do you see this as impacting silver prices?

Of course this may be a very unrealistic and simplistic view of things. Would love to hear wiser heads...

Thanks

Edited by: dgoad on Nov 8, 2014 - 5:09am
Sun, Jun 26, 2011 - 3:10pm
atlee
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Gold (and silver) reversed

Gold (and silver) reversed when Bernanke started talking about no new stimulus. ( ultimately whether there is or isn't doesn't matter at this point). That removes the biggest fundamental driver of higher prices.

That is what the pm mkt is looking at right now. Also absence of further stimulus should negatively impact equity mkts too. Of course we can't have the equity mkt crash immediately after Ben's speech. First we will have some Greek theater and dollar action as this shows opening act.

Sun, Jun 26, 2011 - 3:39pm
Sockeye
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All Aboard Going Down

basically it is expected that PM will go down without QE, Stay out of the markets. They are far too dangerous. Only experts should play the market. go buy physical gold and silver and hold long term.

I expect Monday to explode to the upside and then collapse into hell. 

It is against the rules of trading to ask anyone else what to do. You must decide for yourself.

I am almost always wrong. But the fun in life is those few times when I am right.
Sun, Jun 26, 2011 - 3:55pm
John Galt
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Impact of End of QE2?

I'm inclined to agree with Sockeye that the white noise of QE2 ending will impode equities and PMs in the near term. I've had a nagging feeling that gold and silver are still going to see a massive correction to the downside ... perhaps taking gold down to $1100 or $1000, and silver down to the mid-teens. This, of course, would create an excellent last chance buying opportunity for TPTB to load up on the last remaining supplies of physical - especially from traders forced to liquidate their position to meet margin calls as cash becomes king once again. Whatever is left in the COMEX warehouses will (and is likely already) being piled out the back door.

Anyone else sitting on cash waiting to buy this physical on sale will likely be told that that they're SOL because there's no more physical to be had.

"So you think that money is the root of all evil. Have you ever asked what is the root of all money?"
Sun, Jun 26, 2011 - 4:28pm (Reply to #4)
dgoad
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Apologies if I inadvertently

Apologies if I inadvertently committed a faux pas about what kind of question is fair game.

I only accumulate physical in PMs, I don't trade paper for obvious reasons. My plan is to wait until mid - late July before my next purchase and give the market a chance to speak its mind.

Wish I was like some of the folks I read comments from about buying physical since it was in single digits, but I just started last year and hope to watch, listen and learn.

------ Answers are a perilous grip on the universe; they seem sensible, yet explain nothing -- The ZenSunni Whip
Sun, Jun 26, 2011 - 7:59pm (Reply to #5)
CK
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Dgoad, wait until september

Dgoad, wait until september or late august at earliest. Don't jump into this thing when gold and silver start going back up in July (if it happens) .

Nothing goes straight up or down. There's a chance you'll be buying gold around $1300 or so.. if you're lucky 1250 or less :)

This is a time of forced liquidation. QE2 poured 100s of billions into equities and commodities. It's really simple that when the money starts to dry up, commodities and equities begin to tumble. This will continue for a while. All I know is September-December gold/silver are shooting up.

We're not trading against the market, we're trading against ourselves.
Mon, Jun 27, 2011 - 4:31am
tpbeta
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I would echo CKs comments.

I would echo CKs comments. QE3 is long game, unless Greece forces the pace.

I don't expect any significant changes in QE policy to be announced (though they may still be implemented discreetly) before Bernanke's Jackson Hole get together at the end of August at the earliest. At the moment QE3 (or rather inflation) expectations are putting a floor on silver, but that floor will erode right up until the actual QE announcement. Better to be a couple of days late to that party than try to get in too early. I think (and selfishly hope) that Silver will hit the 20s before it hits the 40s again.

One place I respectfully disagree with Turd is on his emphasis on the fundamentals. I personally think sentiment is also a big driver. Sentiment says don't buy PMs without new QE on the table.

Patience.

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