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Daily Precious Metals Review for 11-Dec-03 - Silver |
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Daily Precious Metals Review for 11-Dec-03 - Silver |
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| Fundamental
Silver Commentary from
Erik Gebhard at ALTAVEST:
www.britefutures.com. Early yesterday when gold was near 413 we
said “if you overlay a 14-period RSI, the chart is showing bearish
divergence. We wouldn’t suggest
establishing short futures positions in front of this roaring bull, but one
could consider puts to possibly play a correction”, and that turned out
to be good timing as on TradeScope we purchased puts that morning. Look to 420 as the top of a new trading range
with longer term uptrend support in the mid $380 area. Remember that futures and options can be used
for bullish or bearish positions; feel free to contact me to discuss trading
strategies. Each contract/option = 100
ounces, a $1 move in a futures contract = $100. “Silver is strong, malleable and ductile. It’s a superb conductor of
electricity. It is endlessly useful,
with applications in industry, medicine, photography, the arts and, yes,
speculation. It seems to do everything
but enrich its long-suffering holders.” He points
out that in September Eastman Kodak announced less focus on conventional
photography, and with 200 million ounces of silver set aside for film each
year, about 24% of world consumption, it’s no wonder silver slipped. He goes on
to say: “But the major looming use for silver is the ancient monetary
one. The metal that used to be money
will serve as a store of value once again.” “Gold is a better monetary asset than silver, but silver has
better supply-and-demand characteristics than gold. Since the Silver Institute began keeping
track in 1990, silver consumption has annually outpaced silver production, and
not by a little. The cumulative 13-year
difference adds up to 1 billion ounces.” “I am counting on the epic miscalculations of the Fed and the
Treasury to push the price, in not back to $49, at least a little closer to
it.” There you have
it, he says to buy, buy, buy. Yesterday
we said, “Nonetheless, you could be pressing your luck by trying to enter
the party right now, it might be safer waiting for a correction in the dollar
to pressure metals lower before getting in with longs”, so now perhaps we
do have a shot at buying a bit lower. Gold
however will continue to determine the fortune of silver, which in turn is
being driven by the dollar, which is being guided by the Fed. Whatever trading strategy you use be sure
that it focuses on offset targets as well as entry points, as no trade is good
or bad until it’s completed.
Remember, each contract/option = 5,000 ounces, a 1-cent move in a
futures contract = $50. Contact me
anytime to discuss strategies to fit your needs. |