Sunday, September 25, 2011

Another buying oppurtunity

What can anyone say about the PM markets over the last 2 trading sessions?  Silver had a massive run up earlier this year and Gold ran up from July to August. Gold is up about 15% for the year and Silver is just under break-even.

Most people that purchase both physical Gold and Silver are in it for the long run as this bull market is not over, most guru's will agree with this statement.

If you are in PM's for the long term, there is no reason to worry or sell as the fundamentals have not changed. Look at the post below with the graph of the St. Louis Federal Reserve monetary supply. That is all you need to know to stay long PM's. All the governments know around the world is to fix a debt problem with more debt and they will continue to do so which is 100% positive for commodities.

Our friend Ben mentioned that the economy has "significant downside risk" which was enough to sink the PM markets and the bullion banks are eager to bring down the price. (And possibly cover massive short positions?)  The government does not want everyone to dump the US Dollar and buy PM's as a safehaven.  As the dollar drops, inflation will rise significantly and the government does not want that to happen at this time. (Election in 2012 and someone would like to be re-elected)

They want to make a statement to anyone that wants to invest in PM's - they are not a good 'investment' and you can loose a lot of money.  This is total B.S.   It's the manipulated Crimex/LBMA/Government paper/electronic market shaking out all of the weak hands in the market.  Those that are on margin and are highly leveraged, they are the ones that are forced to sell. With the Crimex margin increases, it will actually drive the price down a bit more next week.

I am personally buying more, little by little as no one can pick the bottom.  It's much easier to dollar cost average when you think the bottom is near.  At what price?  Ask the Crimex, LBMA, JPM, HSBC, Goldman, etc...  when they will start covering their short positions.  And if the Crimex has more margin increases in the future.  When you purchase an item for the home or when buying a car, don't you shop when the item you want is on-sale?  Well, this is a fire sale on Silver IMO, not so much for Gold.

1 year from now we will look back on the charts and see that it was a good time to accumulate and add to our positions.

Gold has dropped to the 100 day moving average, is under the bollinger band and is oversold. It can continue down under the BB for a few more days  before Gold sees a short covering rally.

Silver has dropped to the 38.2 fibonacci level and has bounced a bit before the close on Friday. Notice that there was no support at the 200 day moving average. It was sell, sell, sell on the futures market.  The Fib is drawn from the August 2010 low to the peak in April 2011.  Silver is also oversold and it will see a short covering rally next week.  Does it mean that $30 is a bottom?  No, especially when the CME hikes margins on their futures account.

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