To learn more click here
The silver market showed weakness again on Wednesday, as the "risk off" attitude continues as far as commodities are concerned. Silver fell during most of the session, but still remained above the vital $31.00 level. We are still long-term bullish of this market and as such are simply looking for a supportive candle in order to start buying. We believe that the $30.00 level will be too much for the sellers to overcome, based upon the massive gap that we saw there in August.
As long as the Federal Reserve continues to print currency, you can assume that precious metals will have a bit of a bid in them no matter what happens. In other words, while other assets may fall apart from time to time, the precious metals market should have some natural buyers. If nobody else, the central banks are buying gold and silver in massive amounts.
Obviously, you want to wait until you see some type of supportive candle in which the market shows that it's time to buy. Such examples would be hammer somewhere between the $31 and $30 levels, as well as bullish engulfing ones between here and there. The fundamentals are most certainly in silver, as it is an industrial metal as well which of course gives it the added benefit of not only be in inflation protection, but also a very valuable commodity for industry on the whole.
Unlike gold, silver gets used up in mass amounts. Electronics are the biggest culprit, and it is a known fact that roughly 90% of all gold that's ever been pulled out of the earth has been used. In other words, we are in a situation where the perpetual shortage of silver is now the norm. On average, silver has roughly an 11 month supply at best. With that kind of pressure on pricing, this is a great long-term investment, and we are buying massive amounts of physical ounces as time and resources allow. We also like losing our returns with the occasional futures contract, and do hold a core position in the SLV ETF.