SilverSeek.com 2013 Virtual Silver Investment Conference: THURSDAY - JANUARY 31

Investors should key off the gold chart for buy & sell signals, but there is no question that the 14,7,7 Stochastics oscillator suggests silver is poised to begin a nice move higher.

After a nearly 9% dive in silver prices this month, investors should be able to breathe a sigh of relief as growth in industrial and investment demand gains pace, and calls of “oversold” conditions and “bargain” prices for the precious metal intensify.

Back in 2008, silver fell from over $20 per ounce down to below $10. This was a stomach-turning experience for those who had begun investing heavily in the metal. I heard reports of bullion dealers in the US who simply were not selling Monster Boxes of Silver Eagles. Physical metal was hard to find in spite of the price collapse.

Gold edged up to $1428.79 in Asia before it fell back to as low as $1404.92 at about 10AM EST, but it then bounced back higher in the last 6 hours of trade and ended with a loss of just 0.74%. Silver slipped to as low as $22.606 in Asia before it also rallied back higher, but it still ended with a loss of 1.8%.

Coach Nick Saban - the state of Alabama’s greatest citizen and college football’s top coach - has two mantras our state’s residents have come to know. They are “finish” and “process.”

Investment demand for silver rose to 122.5 million ounces in 2012, up 32.1% from the previous year. This was the sixth highest annual volume of demand from investors on record. Investors remained interested in silver, amid concerns about U.S. fiscal issues, European sovereign debt concerns, and a slowdown in Chinese economic growth. The strong increase in annual investment demand mostly was driven by three major price declines throughout the year, which triggered strong bargain buying activity in the market.

Unfortunately, there is not, that I can see, a simple pattern that predicts the next high or low in the price of silver. Markets seldom make it that easy. However, there are patterns that provide valuable information to help illuminate the “big picture” perspective of where the current price of silver lies in the up-down-up-down cycle of prices.

Historically gold has made its significant gains, relative to other assets (as well as nominally), not during inflation, but during deflation (Note: I am using the terms inflation and deflation very loosely in this case). These significant gold rallies historically occur when value flees instruments such as stocks and certain commodities.

June 1, 2012 will be remembered as a watershed day. “Cartel Rule #1” was already broken on Wednesday – i.e., “thou shalt not let PMs rise when the Dow plunges,” and nearly was yesterday as well, until they viciously ATTACKED PMs and GOOSED the “Dow Jones Propaganda Average” at midday. But today – with European markets already in freefall, the BLS published its third straight catastrophic NFP employment report.

One of the biggest difficulties facing serious silver analysts, rather than those who just interpret data without looking at, or understanding, its true background is that many of those conducting 'independent' (i.e. those who are not themselves 'silver bugs') analyses mostly predict a weak silver price ahead because of what they see as a large silver production surplus. Gold analysts, on the other hand, have come to accept that any surplus in gold production over normal jewellery and industrial demand is largely accounted for by investment demand.

The U.S. Mint just halted production of fractional gold coins; just as April 2013 just passed January 2013 for its largest ever month of gold sales. Meanwhile, most one ounce silver rounds are backordered six weeks, and premiums on silver Eagles are $6-$8 above spot.

In early Asian trading, the spot silver price broke past $30 an ounce, the first time above this level since early May.