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« Should You Put Gold into Your IRA? | Main | Obama Has No Clothes »
Monday
Feb232009

Silver Leads The Way!

Silver chart 24 feb 09.JPG

As we can see from the above chart Silver is leading the way so far this year
closely followed by gold, precious metals stocks, the dollar in fourth place and the DOW heading south for now.

Silver has come from a negative position to show more than a 25% gain this year which is terrific news and brings some relief to silver bugs as silver trades at $14.43 as we write.

Gold is in second place having made new all time highs in many currencies and is currently trading at $991.70 as we write. Despite the drop off in demand from the jewelry sector the void has been more than filled by safe haven buyers along with a few speculators. The speculators may well decide to take some profits at this juncture so a slight pull back may be on the cards.

The precious metal producing stocks have almost doubled since they bottomed late last year which is an excellent recovery in such a short time frame. However they do have a long way to go in order to emulate their previous highs, but they are heading in the right direction. On closer inspection we can see that some of the stocks are now taking a breather which is to be expected.

Today the DOW dropped 250 points to close at 7114, thus penetrating a previous important support level. If it does not recovery in the next day or so then the broader market could well be in for another battering taking it down by 15% to 20%, to around the 5700 level. Our tiny sector could be the baby in the bath water once again as this sort of carnage does not take prisoners. If the physical metal can hold its ground and continue to garner more attention in the mainstream media then we could be the sector to run to if and when the cat hits the fan.

At this point we just don't know which way it will go. However we intend to hold on tight to what we have acquired as we believe this bull market is getting hotter by the day and when the mania phase kicks in it will be fast and furious dwarfing all previous record highs.

Have a good one.

Got a comment – then let us have it!

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Reader Comments (7)

And I recommend everybody head to ebay right now and pick up a 10oz Wall Street Mint bar in celebration! At least something good has come out of Wall Street. And the new stackable Academy bars are outstanding as well. Get 'em. Now. Aloha.

February 24, 2009 | Unregistered CommenterSnakeman

So do I understand that you will be "holding on" as our silver stocks are thrown out with the bathwater and you will not be using any sell-stop strategy on our silver stocks to save some gains with the intention to buy back again later?

February 24, 2009 | Unregistered CommenterObiwan

Obiwan,

What we said was “ At this point we just don’t know which way it will go.” and yes we are holding on, however, investment decisions are yours and yours alone and we wish every success which ever way you decide to play it. We invite everyone to let us know how they get on with their particular view of the market and what trades they implement.
Good luck!

February 24, 2009 | Unregistered CommenterGold Prices

I asked the question because their are a multitude of opinions about stop-loss strategies. I want to hear what the readership thinks about holding-on versus stop-loss with the intent to buy back again later.

February 24, 2009 | Unregistered CommenterObiwan

obiwan, I'm invested in the silver futures area and have found I don't have the skill to sell out then buy back at a lower price, so I buy and hold and buy again on any pull back. This strategy works for me as long as i've got the general trend in the market correct. I'm now looking at natural gas as this seems to be at a five year low right now and might be worth a punt.

February 24, 2009 | Unregistered Commenterian

Does any have any interest in Coure D'Alen Mine and can anyone make any comment about their recent 4th quarter call. I am not sure of what they said whether they made money or not.
All I heard was cash flow and reserve increases.
Thanks to anyone can respond.
Sincerely
Doug

February 27, 2009 | Unregistered CommenterDoug

How do i buy physical silver and store it

March 8, 2009 | Unregistered Commenterjohn preston

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