Archive for July, 2006

Sivler has been hoovering around the $11 mark for a few weeks now and even though there was a recent charge up in prices the payroll reading and dollar outlook have pulled back on the thought to be re-emerging bullish silver.

Neal Sloan has daily commentary on the commodities and metals markets that we found interesting today. He points out that even with a lower than expected payroll reading silver will continue it’s rise due to demand factors in other commodities such as copper.

He too sees a stagnant $11 silver that should increase through the shaky dollar and even with a fed that holds interest rates at the next meeting.

Here’s what he says about the $11 an ounce price we are seeing and what pressures could effect or not effect it.

“While the silver market seems to have entrenched above the $11.00 level, we are somewhat concerned about the lower volume and open-interest pattern on the recent rally. There is an old gap on the charts down at $11.20 to $11.13 and that area could easily be filled today in the wake of a soft payroll reading. It is also possible to see an ultra-strong payroll reading apply pressure to silver prices, but we are doubtful of that result. We think the overall uptrend pattern in silver will remain intact through the action today but we suspect that some early weakness will be seen.”

Daily Commodities Comments
for 7/07/2006 

technorati tags:Silver, Money, Investing, Commodities, Precious, Metals

Do you want to buy gold for under $300 and ounce, US dollars. How does $252.00 per ounce sound. Pretty good right.

Well if you were to adjust the recent prices in Gold and Silver for inflation you’d see that the 24 year highs that we are seeing aren’t really that high at all. Back in the late 70’s and early 80’s gold reached record highs that might have been a bit overpriced for the times but in today’s dollars would have been a bargain. If you adjust for inflation, at today’s prices of around $600 an ounce would mean that adjusted for inflation that same $600 would buy about $280-$300 an ounce.

If you look at the graph below the price of Gold adjusted for inflation has been in a steady decline (obviously so from the past 20 years), then with the recent climb over the last 7 years we really haven’t seen close to the overpriced market that we saw in the early 80’s. Gold and silver alike have a long way to climb to even come close previous record highs.

Source: How to buy Gold for $252.00 per ounce!

 

technorati tags:Silver, Price, Inflation, buy, gold

With all the ups and downs of the precious metals markets lately there has to be some people making money on all that volatility right? Right. When theres volatility theres money to be made for the options world. I recently found a fascinating article about some of the key factors contributing to the volitility of the precious metals market and in particular silver.

Silver has seen it’s highest increase as well as highest decrease inprice with the span of about 4 months starting in February. The article states that speculation rather than demand have boosted prices leading sporadic trading methods to take over and prices that don’t seem to make sense.

Although the overall tone of the article was bullish they wanted to emphasize that due to the ups and downs that come with speculation of precious metals they suggest playing options on the up and downside to make money in the current silver market. Silver has fundamentals that will keep it’s price rising, namely demand in developing countries coupled with a supply that can’t keep up and silver ETFs like iShares SLV that store away silver bullion, the current market is dangerous for straight buy and store silver investing.

Read more about the article at:

Resource Investor - Commentary - Silver Rush May Be Over but Volatility Means Fertile Ground for Option Sellers

technorati tags:silver, investing, options, trading, ETFs, precious, metals

iShares Silver Trust (SLV) increased their holdings of Silver in June by a massive amount. As reported on their website the trust now holds 2580 tonnes of silver with their London based holding company.

The trust held on June 8, 2006 2082 tonnes of silver and moved that holding up to the currently reported level of 2580 tonnes in just 20 short days. That’s an increase of 500 tonnes in less than 3 weeks!

The purchases came while silver was at it’s lowest point since the fund opened for business back in April dipping below $10 on several trading days during that 20 day period. It would appear as today’s prices indicated that the purchases were wise ones as spot silver surpassed the $11.00 an ounce mark to reach $11.20 an ounce in late New York trading.

The iShares Silver Trust (SLV) is an electronically traded fund run by iShares, whom specializes in ETFs. The fund holds silver in a vault for it’s shareholders and the fund is valued off this bullion minus overhead fund costs. The fund trades on the American Stock Exchange (AMEX) and rose 2.41 in days trading ending at 113.80. This comes after a strong week last week on surges late in the week for silver.