Silver's Rally Looks to Continue on the Emergence of Chinese Silver Futures and Growing Fabrication Demand - MarketWatch

Silver's Rally Looks to Continue on the Emergence of Chinese Silver Futures and Growing Fabrication Demand - MarketWatch

www.TheSilverPrice.info

NEW YORK, NY, May 24, 2012 (MARKETWIRE via COMTEX) -- It has been a tough month for both silver prices and silver stocks. The Global X Silver Miners ETF (SIL) has fallen nearly 16 percent in the last month. Despite the recent drops analysts are still optimistic about silver's future. "A greater amount of confidence in the global economy generally means higher growth and that means more silver demand. If you look out beyond the end of the year, you can still see reasons to be bullish," David Jollie, an analyst at Mitsui & Co. Precious Metals Inc. said to Bloomberg News. Five Star Equities examines the outlook for companies in the Silver Industry and provides equity research on iShares Silver Trust ETF (nyse arca:SLV) and First Majestic Silver Corp. 

Access to the full company reports can be found at:

www.FiveStarEquities.com/SLV

www.FiveStarEquities.com/AG

Silver will look to rally in 2012 on the emergence of Chinese Silver futures and increased fabrication demand. According to China Daily the Shanghai Futures Exchange recently gained approval to begin trading silver futures. "There has been an absence of a means of trading in silver in China," Wang Ruilei, an analyst with precious metals trader CGS Co Ltd, said to China Daily. "The market will be bigger and more liquid with the advent of these futures contracts."

Phillip Klapwijk, global head of analytics at Thomson Reuters GFMS, expects fabrication demand, which makes up roughly 80 percent of silver demand, to increase about 3% to 5% this year. "Prices are probably going to head higher [in the second half of 2012] and we could see a push above $40 at some point," Klapwijk said last month in a phone interview.

Five Star Equities releases regular market updates on the Silver Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

The iShares Silver Trust ETF is intended to constitute a simple and cost-effective means of making an investment similar to an investment in silver. Although the fund is not the exact equivalent of an investment in silver, they provide investors with an alternative that allows a level of participation in the silver market through the securities market.

First Majestic has experienced another solid quarter of earnings and cash flow due in part to an increase in total production to 2,007,219 silver equivalent ounces, an increase of 10% compared to 1,825,366 silver equivalent ounces produced in the first quarter of 2011. Silver production remained robust during the first quarter with 1,826,803 ounces of silver being produced, representing an increase of 3% compared to 1,769,208 ounces of silver produced in the first quarter of 2011.

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: www.FiveStarEquities.com/disclaimer

Gold And Silver Long-Term Technical Signals | Precious Metals | Minyanville.com

Gold And Silver Long-Term Technical Signals | Precious Metals | Minyanville.com

www.TheSilverPrice.info

have been and remain bullish on gold, silver, and gold and silver stocks in the longer-term. However, the reasons why I believe gold and silver will perform well long-term are a bit different than what many economists and pundits are expecting.

I am a contrarian by nature. I generally try to do the opposite of the crowd in every situation I find myself in regardless of whether I am in a movie theater or trading options. Before getting into the gold and gold miners analysis, I thought I would explain my position. I do not consider myself an expert economist, but I try to read those who many consider to be experts to look for similarities in their viewpoints and expectations.

The same herd mentality that exists in financial markets exists among economists. Most economists in the mainstream media today tend to be Keynesians or neo-classical economists. Both viewpoints are generally accepted as the correct interpretation of economic and monetary policies by academia.

Very similar to political ideologies, economic ideologies are deeply rooted. Paul Krugman is a great example of Keynesian economist. Like it or not, the majority of economists believe his views are correct regardless of whether they are based on fact, history, or dare I say it, “common sense.”

This leads me to the reason why precious metals, and commodities in general, may be approaching a major bottom and the potential for a monster rally. The reasoning stems from the fact that across the world, central bankers generally share the same views as Paul Krugman; they believe that the modern finance system does not need gold and that fiat currency is the answer even though history argues against this view.

Most economists and financial pundits believe that sovereign debt is going to bring down the economy and they may be correct. Many believe that the debt will unleash a massive deflationary spiral that will consume fiat valuations, specifically on risk assets and debt obligations.

I do not necessarily disagree that this is a likely outcome, but what concerns me is the number of people that believe this is true. This is the herd’s idea and, as I have said many times before, the herd is rarely right. This time may be different, although it rarely is. For inquiring minds, I offer a rather different potentiality.

What if the debt crisis causes a totally different outcome that very few economists envision? What if they follow Dr. Krugman’s ideas and create massive amounts of debt to stimulate the economy while printing vast quantities of money to prop up failing financial institutions? Clearly increasing debt levels and debasing the currency do not imply a long-term positive scenario.

Central banks do not have a strong track record when it comes to reducing liquidity or increasing liquidity at the appropriate times. Thus these actions are likely to facilitate some sort of crisis in the future whether it is a result of runaway deflation or inflation.

I believe that, should a deflationary crisis caused by massive debt levels and diminishing economic strength present itself, central bankers around the world will behave exactly the same way. They will act simultaneously; through dovish monetary policy, central bankers will flood the world with massive sums of currency with the intent to print away issues with a liquidity induced risk-on orgy.

Should that be their ultimate choice, risk assets will rally sharply higher initially. Paper assets like stocks will produce huge gains in a short period of time while supposedly safe assets such as Treasuries would likely arrive at negative interest rates across the yield curve in nominal terms.

The next phase is the scary part, and it is why I am bullish long term on precious metals specifically.

The devaluation of fiat currencies simultaneously around the world will result in a monster economic crash when the masses realize that most of the major worldwide currencies are becoming worth less and less. The resulting crash would be caused by the opposite force of runaway inflation, The herd mentality that anticipates a deflationary debt spiral espoused by most experts and pundits would be proven materially false.

Under those circumstances, precious metals will be the true safe haven.

Gold and silver will prove to be the true store of wealth that they have been for centuries. So many so-called experts fail to recognize that gold and silver are currencies. Yes, they have industrial uses, but gold and silver represent the last unequivocal bastion of wealth preservation. 

Under the scenario where central bankers flood financial markets with currency, one would expect other essential commodities (such as oil) to also perform well. Furthermore, agricultural-based commodities would also flourish under those economic conditions. Investors would be in much better fiscal condition owning things that they could hold in their hands versus stocks or bonds.

I posit this potentiality not to say that this is exactly what is going to happen, but to challenge readers to open their minds. The crowd is usually wrong. The central bankers and most economists generally share the same viewpoints and their behavior is literally a giant group-think.

Is it possible that they are a herd that ultimately will be proven wrong? Will the herd mentality of economists and central bankers cause a massive currency crisis as they attempt to stem the tide of a deflationary debt crisis?

Regardless of which scenario occurs, precious metals will eventually be sought for their protection against the constant devaluation of fiat currencies by central banks around the world. For this reason, I remain a long-term precious metals bull. 


Read more: http://www.minyanville.com/sectors/precious-metals/articles/precious-metals-precious-metals-market-precious/5/23/2012/id/41202#ixzz1viJrwfZg

Silver Prices Dip on EU Woes. Silver Stocks to Watch: SLW, HL, PAAS, EXK, AGQ, SLV, SVM, CDE » Active Investor

Silver Prices Dip on EU Woes. Silver Stocks to Watch: SLW, HL, PAAS, EXK, AGQ, SLV, SVM, CDE » Active Investor

www.TheSilverPrice.info

may 23, 2012 by marcs leave a comment

European woes returned to the market today as leaders convene for a summit on the burgeoning Greek debt crisis. While promising to do all they can to keep Greece within the union, the uncertainty is causing headaches across the market.

Turk: Important Chart Suggests Massive Move for Silver & Gold

Turk: Important Chart Suggests Massive Move for Silver & Gold

www.TheSilverPrice.info

With continued volatility in major markets, as well as gold and silver, today King World News interviewed James Turk out of Europe.  Turk included an extremely interesting chart for this interview.  He discussed gold, silver, the mining shares and importantly, what to expect this summer.  Here is what Turk had to say about the recent action in gold and silver:  “The odds are improving that both gold and silver made an important low last week, Eric.  I particularly like two things that happened last Thursday.  First, gold jumped more than 1%, which is the limit regularly being imposed by the traders using mathematical algorithms in their attempt to cap the gold price.”

Finding a Floor for Silver & Silver Miners | Resource Investor

Finding a Floor for Silver & Silver Miners | Resource Investor

www.TheSilverPrice.info

Since silver reached our target of $50 last year it has been in a treacherous downhill descent. The depth of the decline in precious metals is approaching 2008 levels, and many mining stocks are at 2009 price levels. While it has been painful for bullion investors, it's been even more disastrous for silver miners and their investors. Now we must revisit our analysis to determine if silver and miners are near their trading floor.

We've seen a lot of bearish reports on silver including a comparison to the Nasdaq bubble crash, which overlays a projection of silver to continue falling to the $6-$8 range. Is it possible for silver to reach or hold at those levels?

 

Using earnings data for PAAS, SSRI, EXK, and AG from the first quarter of 2012, we divided earnings by actual silver produced, giving credit for gold and other base metals, in order to determine the actual break even cost of production. Gold sales averaged $1,700 and silver averaged $33 for the first quarter. Despite this SSRI wasn't profitable. EXK had the lowest breakeven point of $14.68 per ounce of silver, followed by AG at $18.33 and PAAS at $23.87. The average breakeven production cost was exactly $24 per ounce. Even excluding SSRI, the average was $21.50. Over the past 11 years, silver has risen by nearly 10 fold; however production costs have almost risen just as much. Silver's price is approaching its long term cost of production level, and given the depletion of silver stockpiles of the last 3 decades, we don't anticipate silver's price holding below that level for long – if at all. If you're somehow able to buy silver for less than $21.50 to $24 an ounce we'd argue that miners are literally paying you to buy it. Given that over the long run miners need a healthy profit margin as an incentive and buffer against their depleting resources, we'd argue that $26 to $30 is the long term nominal floor for silver.