Commentaries, Silver

Breaking Down The Chart: Silver (May 19th)

Here’s the chart for the poor man’s gold, which is silver. I’m sure all the silver investors are disgusted on how the price of silver is reacting this week. It was at 19.80 last week and it was only 20 cents away from breaking the second hurdle at 20 dollars. When this week started, Hell broke loose and silver went down to 18.09. After analyzing the silver chart, it looks out of sync for me. Kitco reported that all the investors were selling to take a profit for gold and silver. Well, if that report was true, then we would notice a spike in the volume. Kings World News reported that the bankers are covering their short position. That may be true, but where’s the spike in the volume on this chart? The answer lies in the paper metal market like SLV (17.87 ↓3.77%) and GLD (116.63 ↓2.39%). The volume for GLD on May 19th was 34.4 million, which is double the three month average of about 17 million. The volume for SLV is 20.6 million, which is also double the three month average of about 10.8 million.

The recent sell off did not do any technical damage to the silver chart. However, it will need to show a big jump soon to stay alive. I believe that silver prices will continue to rise slowly because of reports that the bankers are covering their  short position in the silver market. The bankers are creating paper metal certificate backed by an empty value. The recent reports of a investigation by the Department of Justice on the manipulation of the silver market could be the end game. Silver expert, Ted Butler, is predicting the end of the manipulation is coming soon.

If the report regarding them covering their short position is not true, then I expect for the price of silver to drop back between 17 to 18. The bankers will continue to depress the price down for as long as possible.

As an intelligent investor, the short term volatility should not bother you if you focus on the big picture. The big picture is the unlimited amount of money being printed by the central bank in Europe, United Kingdom, and the U.S. The consequences is hyperinflation and the precious metals will do well during that time.

Good night and good luck!