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Woah! Silver is Crashing!

Silver is doing something interesting over the last couple days, and I thought I’d comment on it.

For those of you familiar with technical chart analysis terms, it’s toying with major support around $26.50/oz. In non technical terms, if silver goes below $26.50, there is a good likelyhood that it will continue to go down.

So does this mean that we should sell our silver and get out while the getting is good?

No. This dip is entirely predictable.

The main cause is the fact that the dollar is getting stronger, primarily against the Euro. And since the dollar is getting stronger, that means that fewer dollars will buy more ounces of silver.

But why is the dollar getting stronger?

It’s because Europe is well on its way to implosion. And money is going from the Euro to classic safe haven currencies like the US Dollar.

But our fundamentals are still horrible for us.

Another round of QE (read: massive inflation through printing of currency, virtual or otherwise) is coming. It must. These guys will try anything to keep juggling the balls.

Result? The dollar will inflate, reducing its value even more.

Bottom line?

Expect massive buying opportunities in metals. I don’t know how much farther down I think silver will go. I wouldn’t be surprised if it doesn’t break the magic $26.50/oz mark.

But I don’t know that I’d be surprised if it did. There’s lots of technical traders out there that ignore the fundamentals.

If it does, it could drop all the way back to $20. Now that would be a fantastic opportunity.

Because I won’t be surprised AT ALL if we hit $50/oz by the end of the year.

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4 Responses to Woah! Silver is Crashing!

  1. It’s an opportunity to backup the truck and grab some silver before it goes through the roof. Jamie Dimon and the powers that have been manipulating the silver market for so long are getting scared as the house of cards is coming down around them. Remember, nothing has changed here in the U.S. We’re still on a path of economic destruction. The media isn’t reporting any more on the massive exposure that the big U.S. banks have to European debt. If you don’t own silver and can’t afford to own gold, this is a great opportunity to hedge your savings into something that reduces your exposure to a devalued dollar.

  2. This is exactly why I am buying as much silver as I can get my hands on. And if it breaks through that $26.50 benchmark, I will continue to buy it.

    Like you I will not be surprised if it hits $50/oz. But, I see it going even higher as demand for Silver in both coins and small bars will start to increase as investors and even common folk realize the banks and the dollar is not where they want to be.

  3. Unless you are buying it one month and planning on spending it the next, the fluctuation doesn’t matter. It’s part of my long term storage plan. I may rotate the food I buy but I don’t have to rotate my metal buckets or shovels. Silver is something that I store but don’t rotate. All it does is make it more affordable for the average buyer. I hope it drops a lot more because I believe that when what’s happening in Greece and the rest of Europe happens here we will be grateful that we have put away silver.