COT Silver Report - May 17, 2013
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.
With a market cap of less than $10 million, Golden Arrow Resources Corp. (TSX.V: GRG) just released a first-ever NI43-101-compliant resource estimate on its +100 million silver ounces Chinchillas Silver-Zinc-Lead Deposit which is just 30 km away from the productive Pirquitas Silver Mine (reserves: 84 million silver ounces; output: 9 million silver ounces per year) run by Silver Standard Resources (TSX: SSO; market cap: $560 million). The near-by El Aguilar Zinc-Lead Mine and the Palpala Smelter are both owned by mining giant Glencore Xstrata. In December 2012, Coeur d’Alene Mines (TSX: CDE; market cap: $1.5 billion) paid $1.78 per ounce for Mirasol Resources’ 30 million ounces silver deposit which is also located in Argentina.
The Dow making new highs is likely to be very good news for silver investors, because nominal silver peaks tend to come after significant nominal peaks in the Dow. These stock market rallies are driven by the expansion of the money supply, causing a big increase in value of paper assets (including stocks) relative to real assets.
The SILVER MARKET often gets a bum rap. The reason is that often its gyrations are much greater than those of the gold 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.
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.
These are dog days for precious metals investors with just about everybody out to dance on your grave. But as any contrarian investor knows that is usually a positive signal. It is when everybody agrees that you are right that it’s time to sell.
COT Silver Report - May 10, 2013
What are solar panels made from? How do they work? What magic lets us turn sunlight into usable electricity? We tackle all these questions in this look at how solar energy works.