Now that correction has lasted several months and the price has settled back down from the $33 level to the $29 area and I think the price will work itself back up to the $32-$33 area over the next three months, which is close to a 10% gain and a reasonable return given the risk (which I think is low).
I am comfortable owning silver due to its compelling fundamental supply/demand situation.
Happy New Year to all!
Tim January 9, 2012 12:24PM EST
Granted that is only 4.5% per year, averaged, but in an economy that is flat and employment and wages that are flat, a market that is growing demand at nearly 5% each year is poised to do well. Granted, there are many forces at work in the market for silver and many of those forces are designed to maximize the profitability of trading silver. The volatility of silver is huge when compared to the stock market and the total size of the silver market is TINY, especially compared to a $100+ TRILLION market for bonds and a $60+ TRILLION market for equities worldwide. Silver is a tiny, tiny, tiny slice of that market and the players range from producers, hedgers, their bankers, market makers, speculators, investors, and if you use tremendous leverage which is available in the market, then a small drop in price can produce massive losses very quickly. So, with silver, always assume that there is no way to know more than the market, but what you can do is to buy silver AFTER the small speculators who have been liquidated and sold out of the market. I don't want to parrot what the rest of the world is saying about silver, and what moves markets in the short run has literally nothing much to do with the long run. Figure out what time frame you are on and make sure you are taking advantage of whatever means you have possible to help you define risk and potential return. Money management is your most important weapon. How much do you buy and when do you get out are the two most important questions to ask yourself and your money management system.
China Silver Futures traded in Yuan
old news but relevant .. http://www.china.org.cn/business/2012-04/26/content_25241545.htm
BHP Billiton: China Stimulus Is Coming And Commodities Will Rally