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.
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.