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Keep These Tips In Mind When You Buy Gold Online
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Archive for July, 2011

Keep These Tips In Mind When You Buy Gold Online

There is good reason why gold is considered to be a universal currency, as no matter what country in the world you are from, this precious metal is considered to be very scarce, thus making it extremely valuable. However, if you are looking to buy gold online, then it is important that you consider a few points. First of all, understand that once you begin to browse through the catalogs of different online gold dealers, the only thing you will ever be able to do is see pictures of gold coins and bars, so there is no way you would know whether the pictures in fact do contain real gold items or not. Therefore, your first step is to ensure that you always buy gold online from a reputable gold dealer, because this will ensure that no fraudulent activity will occur against you. In order to choose a reputable dealer, it is important to look for one that has been established for many years, as this in turn will allow you to get enough information on the dealer in question without any difficulties.

It is also important to do enough research on gold, because you will find that there are many options available in the type of gold you buy. For example, you are able to buy gold bullion, coins, and bars, and then there is also the option to invest into a gold exchange, whereby your gold will actually be stored for you. This could be a practical solution, because it can be very difficult to store big amounts of gold while still keeping it safe. Of course, another option would be to purchase gold funds, or to buy shares in gold companies. But once again, no matter what type of option you take once you decide to buy gold online, it is important to be very careful of who you do business with, otherwise you might find yourself purchasing gold at a very good price, and then only to find out too late that what you purchased was just worthless metal.

Regardless of whether you buy gold online or through a dealer that is located near you, by doing the proper amount of research on who you choose to buy from, as well as keeping in mind what the overall value of gold is at any point, you will find that this form of investment can be very lucrative. The reason for this is due to the way gold works when compared to other currencies and scenarios. In nearly every situation, when the economy has difficulties, gold becomes more in demand, and thus increases in price. So, even if the local currencies were to drop in value, you can easily lower your risks by investing in gold to counter the loss of value that comes from your local currency.

James Turk On Fiat Money

Excellent reminder why you should hold “Honesty Money” – Silver.
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A Nervous New World

For more than 25 years, I have closely studied the silver market from a supply/demand and market structure perspective. For almost 15 years before that, I traded silver, along with other commodities, as a commodity and stock broker. In all those 40 years, I have tried to avoid analyzing silver in the context of it being an asset of last resort in a world financial crisis. Not because silver is not an asset of last resort but because that attribute has always been widely accepted and written about. I have always strived to uncover new and unique aspects to silver; there was no real value added in me writing about what was already known.

Today, however, I would like to share some thoughts that have come to concern me recently about general world financial conditions and silver. Before I do that I wish to assure you that I still hold an optimistic outlook that many of today’s financial problems in the US and the world will be resolved in a fairly reasonable manner. But I don’t think resolution will come easily or without some type of a real scare. Nor do I think a worst case outcome is impossible. Importantly, I don’t want to paint a picture that silver should be held only because the world is headed to hell in a hand basket. Based upon all the facts, silver should do fine almost no matter what world financial circumstances are eventually witnessed.

One of the things that concerns me the most is the proliferation of debt in almost all quarters, particularly on a government level. Any time the quantity of anything is greatly increased, value is decreased. That collective world debt has grown disproportionately to the world’s ability to service that debt is a serious problem. Sluggish economic growth in the western world makes the choices for reducing debt burdens more difficult. Even with shared sacrifice, the reliance on debt will not go away quickly or easily.  Because almost all government debt is basically a paper obligation (backed by creditworthiness, as opposed to a lien on specific property), all paper obligations may become suspect in a financial crisis.  Assets completely disconnected from the ability of a creditor to meet obligations generally become more valuable in such crises. Hard assets, like silver, become more in demand if paper assets are shunned. In a moment, I’ll try to explain why silver may be the best hard asset refuge in a crisis.

The proliferation of world debt has also resulted in an enormous explosion in derivatives products, such as credit default swaps, that has created the potential for exacerbating any financial crisis. It was just such derivatives products, especially those issued by AIG, which brought the world to its financial knees in 2008. Back then, silver sharply declined in price, due to an increasingly obvious (in retrospect) manipulation by large New York banks that were heavily short silver. It will be hard for that manipulation to occur again. Any new financial crisis is likely to be met with soaring silver prices.

My other chief concern is that the animosity between the two political parties in the US has grown to alarming levels never witnessed in my lifetime. I have always monitored the political mood of the country, although I try to be politically neutral. What I see today is most alarming. In almost every instance, there seems to be automatic disagreement and disengagement on every issue along party lines. Considering the economic circumstances in which we find ourselves, such political head banging can hardly be considered constructive. Combined with the levels of debt and related derivatives concoctions and the weak economy and high levels of unemployment, this political backbiting raises the odds of a miscalculation and financial accident.

My sense is that the European debt crisis and the clash over the US debt ceiling and deficit have had the unintended consequence of instilling doubt in the minds of many where that doubt never existed. Confidence is a tricky thing; hard to earn, easy to lose. Perhaps people should have been more concerned about debt and financial matters earlier, but more are currently as a result of recent headlines. This undermines the confidence needed to continue to buy and hold paper debt obligations. Maybe this confidence is not lost overnight, but it does erode gradually and enhances the chance a panic will come at some point. In a genuine financial panic, it is hard for me to conceive how people won’t flock to hard assets, particularly precious metals.

I understand that I have just outlined the most popular argument for owning gold and silver, namely as an insurance policy against inflation and financial calamity. This is the argument I have tried to avoid for decades, not because it had no merit, but because it was widely advanced. I had always considered the insurance argument as a bonus and not the central reason for owning silver. I still feel that way, but recent events have made me more sensitive to outside financial factors. It seems to me that as more people are exposed to daily reports of world debt struggles and political infighting in the US, more will become convinced of the wisdom of diversifying away from paper obligations and towards assets not depending on the promise of others. Certainly, price increases in precious metals will only solidify that process.

Gold and silver are, of course, assets that are no one else’s liability. As such, they are the perfect antidote to a world increasingly worried about everyone else’s liabilities. The great thing about precious metals is that they are so different from conventional paper financial assets as to be completely distinct and unique in substance. Years ago, I remember writing that silver was in a different realm than other financial assets. Most financial advisors suggest diversification as a method of increasing the safety of a portfolio; to spread out holdings among different stocks and bonds and other securities. But what could be more of a diversification than including assets of a completely different realm, namely, hard metal among paper financial assets? Ask any gold or silver investor what fears flash before their eyes when financial crises threaten. I assure you the last thing they are worried about is the hard metal they own. That peace of mind alone would merit inclusion of metal in an all-paper portfolio.

To my mind, the inclusion of metal in an all-paper portfolio in today’s world is a no-brainer. After all, gold and silver have outperformed just about every other paper investment over the past five or ten years. The harder choice is which one should be emphasized – gold or silver? The difficulty in deciding diminishes as the level of objective investigation increases. The more time one spends in studying the merits of gold or silver makes the choice for silver much easier. Let me highlight a few.

There is less silver bullion inventory in the world than there is gold bullion inventory; around one billion ounces of silver versus three billion ounces of gold. Common sense would suggest that an item more rare than another similar item would reflect that relative rarity in price. While silver has vastly outperformed gold over any reasonable time period over the past ten years, the rarity of silver is vastly underappreciated. I would guess that maybe one out of every million of the world’s inhabitants knows of this fact.  Even among those exposed to the rarity of silver compared to gold, few accept it. Inevitably, as more come to learn and appreciate this startling fact, more will choose to invest in silver.

While much more silver is mined and produced each year than gold, when one considers the fact that silver is an important industrial commodity compared to gold, a different picture emerges. After subtracting the industrial and other fabrication usage of silver and gold, the amount of each “left over” and available for investment the attraction of silver becomes clear. Who cares if more silver is produced if most of it is spoken for by industrial and other fabrication consumption.  Very few people consider silver in this perspective. As time progresses, more will.

The most important factor to consider in deciding between silver and gold is the price of each. Because gold is so much more expensive than silver, the dollar valuations of each are distorted. At current prices and the amount of gold and silver bullion inventories in the world, there is more than 120 times more gold in the world than silver in dollar terms. What this means, among other things, is that it takes a lot more money to move the gold market than it does to move the price of silver. That’s probably the biggest reason for why silver has been outperforming gold. There is nothing on the horizon to suggest that will change anytime soon.

As more people are subjected to the daily reports of a financial world in distress and of political animosity, their thoughts will naturally gravitate to assets with no liability to that stress and animosity. As more people come to learn of the rarity and value of silver compared to gold, their choice will be to buy and hold silver. The trick, as always, is to beat the crowd.

Ted Butler

COMEX Has Everything to Fear With Asian Entry Into Silver Market

I have been writing for some time that I could not get my hands around the silver trade. I had a feeling when the market went up 202 points on Tuesday that gold and silver would sell off into a healthy pullback and they both did. Today I was very surprised to see gold and silver put in very strong showings and was totally confused by this. AS I wrote yesterday I expected them to continue to sell off to about $35.00 in SLV and $141.50 in GLD. They did not act as scripted. What was I missing?

Well Tuesday I spoke to Christian from and he pointed me to a link on YouTube by someone using the nom de plume Brother John F. I watched this video in stunned disbelief. This man had a live streaming video from the Commercial Mercantile Exchange (COMEX) for the minute by minute trades. Silver contracts were selling higher and at about 1:40PM they started to sell off for no reason. Then at 2:03PM there was a trade for 50,000 contracts of silver sold. (This would lead anyone to conclude that the sale was known 23 minutes before it occurred.) This is not a typo. That is 50,000 contracts in one minute! If you are not aware each contract is for 5,000 ounces of silver. So if we do the math 50,000 contacts x 5,000 ounces per contract equals 250,000,000 ounces of paper silver contracts. If you’re getting dizzy reading all of those zeros I will spell it out for you. That is Two Hundred Fifty Million ounces of paper silver traded in one minute. If we do some further math and we multiply two hundred fifty million contracts by the proxy price of silver yesterday which was $40.00 per ounce. That trade was for 10 billion dollars in one minute.

I just want to take this one step further. According to Jason Hommel writing on behalf of the U.S. Mint, the amount of silver produced per year in the entire world is roughly around 680 million ounces of silver and the amount mined in the United States last year was 50 million ounces. The amount that was traded on the CME yesterday was approximately one third of all of the silver mined in the world. It was 5 times the amount mined in America. So how can this be?

You may ask why this is so troubling. The reason is that I have been writing for some time now that there are rumors that the silver ETF (SLV) does not have the silver that the paper purports to represent. There are reports that if SLV was ever called upon to produce the underlying asset it represents it would be unable to do so. Is there any wonder why this commodity is so volatile?

The fact is that the silver market is being incredibly manipulated. Well that is about to change. On Friday July 22nd, the Hong Kong Mercantile Exchange will start trading dollar denominated silver futures contacts with the hopes of tapping into the growing demand for the metal in China and India. The new contact will enable buyers and sellers in China to trade effectively with their counterparts across the world, while at the same time allowing investors to gain exposure to silver price movements and broaden their investment portfolio. The exchange also plans to roll out yuan-priced gold and silver futures to capitalize on growing investor demand for China’s strengthening currency. They also have ambitions for products in base metals, energy and agriculture.

This was the missing piece of the puzzle I could not find. Starting tomorrow Friday July 22nd the Anglo American monopoly on silver is over. This will be the first time that Asians can buy and take future delivery of silver in Asia. No longer can the CME raise margins close to 100% in eight days. The silver shorts are and should be afraid of the hundreds of millions of Asians that will be entering this small market. China alone has trillions of dollars and they could drop 0.01% of that money into silver and explode silver beyond the control of the American elite.

The one that has the most to fear is the Comex. Yesterday’s manipulation 23 minutes before the trade of 50,000 contracts was consummated only proves that the COMEX has been manipulating the market. There has never been true price discovery as this manipulation of the COMEX has kept the true price of silver hidden. Well, I see dark days ahead for the COMEX. There will be investigations, there will be discoveries, there will be trials and there will be jail sentences handed out. Market manipulation is not something the Feds take lightly.

The real reason for this post is to tell all of my readers to buy as much physical as they can. Until I am convinced that the markets have established a transparent state where true price discovery is possible I will stay away from these vehicles. I do exclude PSLV form this list as their paper is really backed up by the physical it purports to represent.

“Physical Silver is the bullet that slays the financial vampires. Physical Silver is the stake in the hearts of the Wall Street werewolves.”

Written By: George Maniere

11 Silver Investor Mentality Shifts

Written By: Chris Duane

We are going to see a huge shift in silver investor mentality.

Silver buyers will no longer be “nerdy” guys talking about Austrian Economics or “momentum monkeys” trying to make a quick buck trading metals. It will be wide eyed panic buying as people wake up to the fact they everything they have ever worked for is being destroyed by the massive money creation from the world’s central banks. Once people see that the only answer the bankers have is to print more money and that the only answer the politicians have is to spend more money, they will see that there is no safe place on earth to store their wealth other than real tangible assets. And of course the best real tangible asset is silver. (Read the Silver Bullet and the Silver Shield.)

I predicted that silver,at one point, would not be available at any dollar price

You can throw away all of your $50, $100, $500 price targets, because society would finally see the enormity of the fraud in the silver market. Once this fraud exposed, no person on earth would dare let go of their silver for fiat paper money. Sure a couple of ounces might be available at the local shop, but the vast majority of the silver markets will be as barren as the shelves of a post collapse Soviet Union grocery store. This global mentality shift in asset values will lead to a paradigm shift where the world no longer wants debt money. Only real money will do in the new paradigm.

1. Physical investors who have been stacking physical silver will be stunned by the sudden appreciation

It will be akin to someone winning the lottery. They will shocked at the enormity of their new found wealth which occurs at the same time the economy becomes an absolute horror show. A shift in the perception of wealth will confirm that they are holding something truly precious. The years of being told they are crazy for buying silver will finally give way to, “you were right.” After the shock wears off, these newly minted kings will seek to make the most off of this once in a life time opportunity. These men were astute enough to buy silver when everyone said they were nuts, they are certainly now not going to give up what they have for some dirty dollars that they did not want years ago. They will wait for something much, much better. They will not see immediately many opportunities to invest their new wealth in, because the final throes of the debt based economy will be horrific. No one will invest when it is not certain what will happen to humanity. They will have no choice but to wait until the act plays out and the music stops.

2. Long term paper investors who have been sitting on the sidelines, will rush to buy silver this time around

I cannot tell you how many people I know that are literally dragging their feet buying silver. ( You know who you are.) They understand why to buy, but it is just so hard for them to pull the trigger. Unfortunately, it will not be until much higher prices that they will finally pull the trigger. When they do buy, they will be joining a fast and furious rush as those fence sitters finally panic for the exits. They will see that Europe’s debt problem, is the world’s debt problem. We cannot solve debt with more debt. They will see a world awash in more debt/money. They will see that no paper asset is safe with the amount of money printing that will occur this next round of “too big to fails.” This time the “too big to fails” won’t be some puny, billion dollar company, it will be trillion dollar nations. I have said that there is quadrillions of dollars in paper assets and only a few million ounces of real physical silver on the market. Right now, there is probably less than 1% of people invested in silver,what will the price of silver be if it went back to 15% of the population like it did in the 80?s? Don’t forget the last time precious metals went up it was really only the Western nations that participated in that bull run. This time, it is truly a global reality with China leading the way.

3. Silver retailers will be stunned as people throw their fiat dollar for real tangible metals

Some retailers will celebrate and sell everything they have at higher and higher prices. They will expect to buy back in at a lower price, but this time instead of correcting, it keeps going up. After a short while these former precious metals players will see that the world changed and that they were on the wrong side of the trade. They will then become one of those panic buyers that they once celebrated selling to.

4. The smart silver retailer will see mentality shift of these silver buyers and take silver off of the market

They will see a mentality that is not one of a monetary or freedom “nerds”. It is not the mentality of a momentum monkey trying to make a quick buck trading metal. It will be one of wide eyed sudden panic that people’s entire life’s savings are at risk and that they need to buy silver (or other real assets.) These new buyers will not be letting go of their silver anytime soon, because they will no longer trust the dollar, the stock market, the banks, or the government. The smart retailer will now see that the real money is not selling the metal, but in holding the metal. The longer they hold it, the more that they may never sell the metal for paper money again. They will join the rest of the strong handed investors that will not sell until there is a new monetary paradigm established or they can sell/leverage their silver directly for other income producing assets.

5. Momentum monkeys, who play the paper markets on real assets, will seize upon the new mentality a drive the paper markets higher as they smell blood in the silver short water

Hedge funds will jump all over this market as they seek to squeeze every dollar out of the silver market. Vast paper wealth will be made in a very short time. These momentum monkeys will fail to see that while they were right on the trade but they were in the wrong vehicle. The paper market will cheat them of their ultimate reward of wealth. The mentality shift in asset values that will send real assets soaring at the same time all paper asset markets fail. Even if the momentum monkeys are “right” with their long silver bet…

there is nothing stopping the CRIMEX from changing the rules for paper traders capping their gains.
there is nothing stopping a failure of their brokerage account or their bank as the paper markets seize.
there is nothing stopping people from not accepting their paper “winnings” for the real physical silver.
there is nothing stopping the very dollars they “won” from not having any value at all.

6. JP Morgan the ultimate silver buyer?

In the final act I do not expect JP Morgan to fall on the sword to defend a failing system. JP along with many other banks know full well the reality of the physical silver market. They have been perpetuating this fraud on a massive scale for years. They have kept the regulators at bay by having their boys actually become the regulators. They know full well that they are trading 100 paper ounces to 1 physical ounces. They are doing this because it is easy money to make now. During this mentality shift they will change with the wind and be first in line for the real metal that they are in control of. These banksters will most likely shift their losing silver short positions on to some other shell company, pension fund, the Federal Reserve or most likely the tax payers. These former silver shorts could ride the physical silver market all the way up. (I may have to change my Blythe Masters Rides The Silver Rocket pictures to ones of ecstasy…)

7. Institutional silver sellers will take their silver off the market

Most people do not realize that the recent depletion of silver on the CRIMEX from 41 million ounces to 28 million ounces has NOT been from people buying and taking delivery of physical silver. It has been from cancellation of warrants of sellers no longer wishing to sell. This is a huge factor from the supply side of silver that will push the price up further.

8. Miners will no longer seek to rush to push more real metal into the paper markets

If they do sell their metal they will most likely sell it in Asia where there will be a huge demand for the metal. These miners will also see that like OPEC or DeBeers, there is great power in restricting output of their product. Most silver is merely a byproduct of mining other metals. Smart miners would be wise to sell their zinc or other metals and keep their silver byproduct as profit. This silver would grow in value and not be taxed. Since they never sell it, there is no tax on its increasing value. This increasing value would be monetized through the appreciation of their stock price as their balance sheet becomes more and more attractive. (Somewhere, someone is smiling at this thought…)

9. Corporations who were once comfortable with paper contracts guaranteeing delivery of their metal, will only want immediate physical delivery.

Silver is such a strategic metal and is used in such small quantities. There are billions of dollars in corporate valuations at risk if corporations cannot secure the basic components for their products. Companies like Apple computer will whip out the big check book for only the real thing. Corporations will use their power to create a stock pile which will add further demand. Most likely they will bypass the paper markets all together and deal directly with the corporations who mine the silver. What a power shift that will be when tech giants have to go hat in hand to a small mining company to get their metal. Who knows, maybe these tech giants will use their wealth and just buy the whole mining company…

10. Mining nations will make their move

So many mines are in nations that can and will, at the drop of a hat, nationalize mines. Nations will be facing tremendous social upheaval and will not hesitate to steal wealth from the mines that rest in their lands. China once the largest exporter of silver only 5 years ago is now the largest importer of silver. Bolivia was on the verge of nationalizing their mines last May, they could pull the trigger anytime they want. Even in the United States,do you really think the thieves in Washington will not steal the mines in America? Or the CRIMEX or the SLV? Or even it’s citizens?

For the record, I do not think they will go for the little guys like us

First the majority of silver holders are smart enough to hide their silver beyond the sight the Federales. Second, the majority of silver owners I know are former military, gun owners who don’t trust the government. They would never willingly give up their silver anymore than they would give up their guns, food or children. If they won’t give it up, what are they going to do send in the SWAT team to grab some Mercury dimes? Finally, I believe that the government will have much bigger problems on its hands with riots and starvation to mount any effort for confiscation. All of this assumes that these bozos even understand how important silver is.

11. The Anti-Hegemon makes it’s move

I have written that there is a group of nations that have not benefited from the current world order and are seeking a way to end it. They have been very wise to not agitate the mortally wounded beast of the Anglo American Empire. They have been sitting on the side lines sharpening their knives waiting for the right time to carve up the remains. China is leading these nations with their huge reserves and the opening up of new markets like the Pan Asian Gold Exchange and the Hong Kong Mercantile Exchange. These nations have been using their paper assets to buy real assets all over the world. China is now in every continent buying oil, farms, and mines. They do not waste their wealth on frivolous showcase properties like the Japanese did when they bought golf courses and Manhattan sky scrapers. They are buying assets that will be the basis of power in the new paradigm of real wealth.

This mentality shift in real asset values will ultimately lead to a paradigm shift in power

Those that have the real assets will be the ones making the rules. Those investors who hold the physical metal will finally have the upper hand over the paper manipulators. Those miners will finally become more valuable then these frivolous companies like Facebook. Those nations that have the natural resources will have the upper hand economically over nations that have nothing else to offer but debt and death. This shift is power will be from those that produce nothing to those that produce something. Reality will take hold and the day of something for nothing will be over for good.

When the game changes you will see that the counter party risk becomes the most important aspect of investing

Paper assets rely on another party to fulfill their end of the bargain, real assets do not. When the world is panicking, it will be every man for himself. There are many more powerful people higher up the food chain that will get theirs before you get yours. A very wise man, Ponce, once said. “if you don’t hold it, you don’t own it.” When this shift happens, will you be in the right place, at the right time? Got physical?

James Turk: Just “Several More Days of Silver in The 30s”

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With silver and gold rallying strongly against the tide of the risk-off trade, bullion expert James Turk forecasts that silver is about to launch into the 40s, as more nervous investors come to terms with the inevitability of further devaluations and/or sovereign defaults, forced upon the world’s central banks by investors and weak politicians.

“One never knows exactly how the markets will unfold, but my sense is that we only have several more days of silver in the 30s,” Turk told King World News. “Once silver clears $38 on a closing basis, you are going to get back into the mid 40s in a heartbeat.”

Turk, the founder and president of overseas precious metals storage firm has warned long ago of the events playing out in Europe today, so his words carry significant weight among the bullion community.  The timing of his call back in January for silver to reach $50 by June 30 was considered reckless and daring at the time.  But history has proved him correct.  Silver reached an intraday high of $49.70 on May 2, just pennies shy of $50 and a month sooner than he expected.

Recently, Turk (along with another PM giant, Jim Sinclair) has differed with another hard-money advocate, Marc Faber, on the direction of precious metals prices during the months of July and August.  Faber expects the precious metals to meander in the hot summer months, which is a bet that the long-standing historical record of weakness during that time is most likely.  On the other hand, Turk anticipates a repeat of 1982, the year of the Mexican peso devaluations.

“The action in gold and silver so far this summer indicates to me that this is in fact poised to be explosive on the upside,” Turk explaind.  “Nobody is talking about this, but it could be a reality in short order.  Here it is nearly 30 years after the breathtaking summer of 1982, and history is about to repeat all over again.”

Turk’s battle with Marc Faber in the fight to be right on the outcome of precious metals during the summer months favors Turk, at the moment.

Gold and silver took center stage during the flurry of bullion-friendly news coming from both sides of the Atlantic, yesterday.  The timing of the news releases from both sides of the Atlantic seemed contrived, timed and salvo-like, as the dollar and euro battle it out in the race to cut sovereign debt loads through currency devaluations.  Gold reached new highs in the euro and new closing high in dollars.  Overall, gold was the winner in the scramble out of euros.

Tuesday’s news of widening spreads between the German and Italian 10-year notes, as well as soaring CDS pricing of Italian debt; an IMF warning launched by the new French (but Ameri-centric) chief, Christine Lagarde, at Italy, chiding the Italians for dragging its feet on implementing its own austerity plan; Moody’s downgrading Ireland to junk; FOMC minutes release, which strongly hints at the possibility of further stimulus from the Fed is coming; the posturing war that’s broken out between Democrats and Republicans over the U.S. federal budget; and the timely strengthening of the Japanese yen to save the day from a dollar breakout of 76 on the USDX have demonstrated the desperation among the officialdom and the equally fearful investor who searches for a truly safe haven.

“Eric this is the start of the next big leg higher in the precious metals,” suggested Turk.  “We’re at a new record closing high in gold today, that is extraordinary considering it is happening against the headwind of a stronger dollar.  There is an important message here, Eric, money fleeing the Euro is not just going to the dollar, it’s flowing into the metal of kings.”

As the public enjoys summertime vacations and respite from the daily slew of bad economic and political news, Turk sees the investor public mostly unaware of the theft of purchasing power currently in progress.  But for the precious metals stalwarts and recent converts, this summer could be a very profitable one.

“People are recognizing that the only true safe haven is the precious metals,” said Turk.  “There are still so few people talking about gold and silver having an explosive summer.  The only place I’ve heard it is on KWN.  The fact that there is still so little bullish sentiment just reconfirms my view that gold and silver are ready to rocket higher.”

It will be mighty interesting to see if silver does indeed exceed $38, and if an assault on the May 2 high is in store for the silver faithfuls.


Eric Sprott – Paper Markets Are A Joke: Prepare for Bullion Prices to Go Supernova

SILVER: Accumulation Period!

The Commitment of Traders data for futures contracts is released by the CFTC each Friday. The data is compiled as of the preceding Tuesday. For each long futures contract there is a short position. Unlike equities that have a fixed number of shares issued by a corporation, there can be an unlimited number of contracts. For each new buyer and new seller a contract is created (called open interest). In a strong uptrend the open interest will expand, identifying that new buyers are stronger than new sellers. In a rising trend with declining open interest it identifies that the market is being pushed higher by more short sellers exiting positions than new buyers establishing positions. When the last of the undercapitalized short sellers have exited their positions the market becomes vulnerable.

The COT report breaks down the positions based upon the type of market participants. In our analysis we monitor the net positions of non-commercials (speculators) and commercials. The total level of positions can be significant, however, what interests us more is the rate of change in positions. When there is a dramatic decline in positions of both commercial and non commercial participants due to a shift in market direction it serves as a buy alert. As of last week commercials have reduced their shorts by 48% and non-commercials by 61%. This produces the ninth cluster of alerts in the data (available from the CFTC back to 1986).

For those investors with deep pockets is it time to begin accumulating bullion and related stocks.

Bob Hoye
Institutional Advisors
Posted Jul 7, 2011

SILVER GURUS: Paper to Physical Ratio of 25, 100, 500 to 1?

SILVER GURUS: Paper to Physical Ratio of 25, 100, 500 to 1? Sprott, Martenson & Bix Weir