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

The gold eased further to $1,588.50 in New York, yesterday only 20 cents higher than the day before. In Asia and London it traded higher at $1,592 before Fixing at $1,593.25 and in the euro at €1,219.386, while the euro was $1.3066, up 1.3 cents. Ahead of New York’s opening, gold was $1,592.75 and in the euro at €1,219.34.

It looks like the Cartel has executed yet another "named storm" blitzkrieg attack on PAPER PMs; in this case, comically commenced with an anonymous "tweet" yesterday afternoon; yet again, regarding a potential "end to QE." It was only ONE WEEK AGO when the Fed decidedly reiterated QE - as its partner the ECB not only lowered rates, but stated they may reduce rates further (not to mention, rate cuts by Australia and South Korea); and oh yeah, the utter COLLAPSE of the Yen - which will ony further foster "THE FINAL CURRENCY WAR."

Basically that the trading structure in the silver futures market gives rise to price discovery, and that this mechanism has long been divorced from the real fundamentals for physical silver. Instead, it is almost entirely driven by the vested interests of the for-profit exchanges and their largest clients.

John Smith, CEO of Silver Standard Resources, says as central governments try to stimulate their economies, they'll devalue their own currencies, making silver a safe haven and providing price support.

The notion that silver has been recently trading more like a base metal is more a fallacy than fact. Some of the top technical analysts have been stating that the reason why the price of silver has not held up as well as gold is due to the fact that silver trades more like copper than gold. Basically, if the "King" of the base metals suffers... so will silver. While this makes good press, the reality is much different if we look at the data below.

The sharp advance by silver last week was presaged by the late July breakout from the important "inner" downtrend that we had earlier delineated, which had been in force from early March, as we can see on the 8-month chart for silver shown below. So is that it - are we on our way now? - almost, but there is one remaining major hurdle left to clear. Before going on to consider what that is we should take note of the fact that silver is now critically overbought short-term as shown by its RSI indicator, and it has also run into a still falling 200-day moving average, factors which point to a high probability of it pausing to consolidate or perhaps react back somewhat in the immediate future - if it does keep going higher near-term, the advance is likely to be measured. The fact that the 50-day moving average is still some way below the falling 200-day also suggests that some more time is needed before the major uptrend expected gets into full swing.

I have posted the following composite chart without any easily discernible labels to illustrate why I analyze the silver market in the manner that I have been doing for some time now. Both charts use last November 2011 as the starting point and carry on through the present trading session. See if you can pick out which one is the Continuous Commodity Index and which one is the Silver price.

There are many predictions for the price of silver. Some say it will crash to nearly $20, and others proclaim $100 by the end of 2012. The problem is that some predictions are only wishful thinking, others are obvious disinformation designed to scare investors away from silver, and many are not grounded in hard data and clear analysis. Other analysis is excellent, but both the process and analysis are difficult to understand. Is there an objective and rational method to project a future silver price that will make sense to most people?

This infographic shows all the Silver ever mined throughout history. Silver price is currently hovering around $30 / troy oz. When Silver price hits $31.10 / troy oz each gram of Silver will be exactly $1. Silver is usually measured in Troy Ounces. A Troy Ounce is about 1.09 regular Ounces.

This infographic covers silver’s meteoric increase and the factors that have led to silver’s exploding value. In short, it’s not speculation: silver is a commodity that’s being influenced by old-school supply and demand. We also take a nod to the future to see where silver’s price may be headed based on the most up to date demand data.

Much of what is written for the Gold Market update applies equally to silver, so it will not be repeated here. There are, however, some important differences that we will focus on here, which suggest that silver now has really big upside potential from this point, despite its comparatively anemic reaction on Friday to the news out of Europe, compared to other commodities.