Friday, 21 January 2011

Silver: Trading Update

When we last posted on this, James H sagely commented that silver is a stacked game, only for the brave. Right on cue, something odd is happening - silver has lurched into backwardation.

I don't rule out for a minute that hanky-panky is afoot, which is reason enough for great caution. Nevertheless, for myself, I am still taking this as a buying opportunity: I'll let you know my average buy-in price in due course.

My reasoning ? Purely MHO, but I take the view that (a) strategically, there is probably a decent floor (Chinese at al diversifying) and (b) technically, I'd generally interpret backwardation as a signal of near-term shortage - though admittedly it has been coupled with spot-price softening in both gold and (to a lesser extent) silver itself.

So - a potential danger-signal for sure, but personally it suits me OK at the minute (see the 2011 predictions).



Anonymous said...

You might want to check out this blog for info on the GSR,
Gary does a lot of technical analysis for the lovers of squiggly charts.

Anonymous said...

Where can you buy silver, other than second hand and who is selling, without paying VAT?

CityUnslicker said...

Anon - well ND does not approve but there are some ETF funds that do actually hold Silver. By the standards of ETF's I reckon these are pretty secure.

Nick Drew said...

anon - you might want to take a look at who do physical silver & gold

but as stated before, that isn't a recommendation, nor are they advertisers of ours ... read their extensive small print & DYODD

James Higham said...

Nevertheless, for myself, I am still taking this as a buying opportunity ...

Oh, no doubt of it. If you can predict the moves of the major silver traders, you can ride on that in the short term.