Its often tough being in the metals space and this article is not going to help, however we need to consider all angles and look for buying opposrtunities. Lets be blunt, gold looks absolutely awful. It’s up the proverbial creek and there’s no paddle in sight. Silver looks even worse. Just how much more ugly can all this get?
We’ll start with silver. Last week, Reuters reported that silver holdings in exchange-traded funds(ETFs) were at all-time highs. That is incredibly bearish – and it was worrying me a few weeks back.
Bear markets do not end when record numbers of people own the asset in question. Bull markets end that way. Few people owning the asset means there are more potential buyers out there. A lot of owners means there are a lot of potential sellers.
If those people holding silver in ETFs decide to sell, they could seriously hurt the price – just as the introduction of the ETFs brought in a lot of buying pressure in the late 2000s.
For all of silver’s volatility, its chart is actually quite symmetrical. This chart shows silver since 1970. From the 1980 high ($50 per ounce intraday) to 2011 is an enormous saucer shape.
This post was published at TruthinGold on September 24, 2014.
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