Monday, August 9, 2010

The range remains

SLV Silver Chart

The Week of MAY 5-12 brought a move of almost 15% uprise in silver. Since that point it has not broke below its low or high as it is now approaching three months. The longer we are in this range, then the odds favor a bigger breakdown or breakout. Just because you know silver is a great investment for any reasons that are all great, does not mean it can not go lower. For if this was the case, then silver would not have lost over 60% in 2008. An article written by kitco today states a nice size purchase of contracts were entered. Today we are seeing silver sell of marginally, while the dollar is higher marginally.

09 Aug 2010, 12:23 p.m.
By Debbie Carlson
Of Kitco News

Chicago -- (Kitco News) Speculative investors increased their long positions in all precious metals futures contracts, but their purchases in silver were the most pronounced, according to U.S. government data.

The Commodity Futures Trading Commission’s weekly commitment of traders’ data from Friday saw the managed money group increase their long silver positions by 6,364 contracts to net 28,941 contracts in the disaggregated futures and options combined report. They also cut shorts by 1,108 contracts. Meanwhile, swap dealers and the producer/merchant category saw long positions cut and shorts added for both. Swap dealers are net short only 1,340 and producer/merchants are net short 51,950 contracts.

The rise in speculative silver long positions comes as silver prices have rallied lately. Prices rose during the week the data covers, which is through Aug. 3, and continued to gain through the rest of the week, so speculative positions could build again when fresh data is released Friday.

Barclays Capital said in a research note Monday that speculative longs are the highest in month, when using the CFTC legacy report.

Commerzbank said Monday while speculators increased net-longs in all precious metals, “the expansion regarding silver was particularly pronounced.” The bank said the increase in managed money positions to nearly 29,000 contracts was a 33% rise, and the highest in five weeks, when using the disaggregated data.

“This means that financial investors have significantly contributed to the rise of the silver price by more than 4% in the reporting week,” the bank said.

With the gold-silver ratio slightly over 65, the bank said the white metal remains “relatively low priced” versus gold and calls silver “an attractive investment alternative to gold and expect a price increase to US$ 20 per troy ounce by the end of the year.”

Regarding other precious metals, Barclays said platinum and palladium net-long fund positions are at their highest since mid-May.
From Kitco Website

Mike Maloney on Rich dad from 2009

No comments:

Post a Comment