Thursday, November 4, 2010

Silver (SLV) shining brighter than Gold

3 month daily chart of SLV iShares Silver Trust ETF

SLV has hit the first fibonacci objective 161.8 level based on the 2008 lows and the 2009 high in December. With the Fed's announcement of QE2 yesterday and essentially printing up an additional 600 billion, the devaluation of the US Dollar continues.

SLV was up 5.69% while GLD was up 3.39% today. Silver continues to outperform Gold since the start of this seasonal rally. The Gold/Silver ratio continues to drop and investors that have been long Silver have been handsomely rewarded.

There are still quite a few Comex Silver short contracts that have been loosing money with every penny that Silver goes up.  Most probably thought that last weeks correction was going to go deeper so they could cover, but investment demand proved otherwise. Expect a short squeeze continuing for the remaining of November and possible profit taking in December by large institutions and hedge funds to book in a profitable 2010 year.

A combination of physical Silver, ETF's and Silver miners are the best way to invest in this particular metal. All of the major and mid tier Silver miners have made significant gains over the last 2 months which include:

Pan American Silver
Silver Wheaton
Silver Standard
Silvercorp Metals
Mag Silver
Hecla Mining
Endeavour Silver

Sit tight for the next 18 days (the amount of business days left in November) and watch the rally continue. The shorts should be uncomfortable now and should be covering unless they are waiting for higher buyback prices....

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