Tuesday, April 26, 2011

Parabolic

The above term describes Silver's recent move quite well. This page is a very well aggregated source of data.
1 - We can see how crazily silver has moved. In my own dummy portfolio, Gold has delivered 28% in 1.5 years whereas Silver has delivered 160%+ in the same time period.
2 - The page says well how there is ample supply of silver in the real markets and that demand has been sufficing supply in the recent past.
3 - Going forward, silver supply seems conclusive for the next 16 years or so.

Another article is significantly bullish about Silver citing growing demand from China, solar power and new uses.

My (wanting) understanding says that in the last 2-3 weeks, silver shorts have been massively squeezed. On a longer time history horizon, a particular entity has been amassing silver; it could be China, Buffett, a new 'Hunt Brothers' - it is definitely not the market as a whole.

A friend asked me what I think of the Silver: Gold ratio. I said that I didn't care enough about the ratio. It's time that people stop comparing the two scarce natural resources.
Gold is in short supply and has very little real use. Silver is significantly available and has many practical uses (which, going forward might not be economical).

Moving slightly away from this topic, I believe that QE3 is at hand. Wait for June. Volatility is on its way.

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