Silver Headed to $50 an Ounce in 2011

Global Supply Dwindles While Demand Skyrockets

By Greg McCoach
Friday, February 25th, 2011

Gold will continue dominate the precious metal headlines in 2011. But it's silver that will ultimately be the year's top performing precious metal.

Don’t get me wrong; gold will do very well for investors this year.

But on a dollar-for-dollar basis, silver is going to blow the doors off gold’s performance in 2011.

Silver could easily eclipse the metal's 1980 nominal high of $50 an ounce this year.

And when you learn just how little silver is available on the market right now, I think you'll agree...

The ten largest precious metal traders on COMEX currently hold net short silver positions that represent more than 330 million ounces — nearly half of total global silver production.

Compare that to gold, in which the net short position in of the same ten traders represents 25 million ounces (or a mere 1%) of the 2 billion ounces of world gold inventory.

That means the net short position in silver is 27 times greater than that of gold.

This is setting up what I believe could be an explosive situation for wise investors.

Read more @ ORIGINAL SOURCE

Turk - Dollar Ready to Collapse, Silver Squeeze to Continue

February 25, 2011 KingWorldNews.com


With gold higher and silver up almost $1.30, King World News today interviewed James Turk out of Spain.  Turk had this rather frightening warning about the dollar, “The dollar right now is hanging on the precipice.  If we break below 77 on the dollar index, look out below.  I don’t think people really appreciate how scary the dollar chart is here, or how ominous the implications really are.  There’s no predicting how far the dollar could plunge if confidence breaks.”

Turk continues:

“You’ve got civil breaking out in North Africa and you have rebellions happening in the Middle-East.  In this kind of geopolitical situation in the past the US dollar would always rally, but this time it can’t even bounce.  You know Eric the other side of this coin is that if the dollar falls off the edge of a cliff, precious metals are going to skyrocket.” 

When asked about silver Turk stated, “During the most illiquid time of the trading day, somebody decided to take out all of the stops in silver.  If you were not following during business hours in the Pacific Ocean you missed it.  I woke up this morning and looked at the chart and couldn’t believe what happened while I was sleeping.

The important point Eric is that no technical damage was done and in fact the situation has become even more bullish because that little smack down overnight took out all of the weak hands.

With this month’s important options expiry now behind us, I’m looking for higher prices next week.  Even though the March/May spread has flattened a little, the backwardation continues to grow to 2015 and has ballooned further to $1.16.  The short squeeze is continuing to develop.  The shorts are trapped and whether the trap springs this week or in a month or two I don’t know, but we are getting very close.”


Read more @ ORIGINAL SOURCE

Trader Dan Norcini's 4 Hour Silver Chart - update - Close of trading for the week

FEB 25, 2011

$400 Silver, Extreme Backwardation: James Turk on Goldseek Radio

Feb 24, 2011

James Turk's book

Mexico's Fresnillo CEO Sees Silver Demand Remaining Strong [Feb 24, 2011]

By Laurence Iliff, Of DOW JONES NEWSWIRES

MEXICO CITY -(Dow Jones)- Fresnillo PLC (FRES.LN) Chief Executive Jaime Lomelin said Wednesday that the world's biggest primary silver producer sees strong demand and solid prices even if global economic fears subside and silver's use as an investment hedge slows.

"Even if this entire problem of global worries over inflation and economic development were to disappear and economies began to bloom, we think that silver would stay at a good price thanks to its applications," Lomelin said at a meeting with reporters. "If at any given moment there was a lot of euphoria in the world economy, there would be greater consumption of industrial silver."

He pointed to all kinds of electronic devices that use silver as a conductor, along with growing interest in countries such as China in renewable energy sources like solar applications.

And just as demand is likely to remain strong, supply will continue to be limited because the growth in new mines capacity has lagged, Lomelin said, adding that most silver comes as a byproduct of copper, zinc and lead...

Read more @ ORIGINAL SOURCE

Long-Term Decline In Gold/Silver Ratio To Favor Silver, Although Correction Possible

24 February 2011, 02:59 p.m. 
By Allen Sykora
Of Kitco News 

(Kitco News) - The gold/silver ratio hit its lowest levels in 13 years this week, and as the bull market continues in precious metals, analysts look for it to fall further as silver outperforms due to the combination of investment and industrial demand.

Nevertheless, some look for the ratio to correct higher in the short to intermediate term. This is largely because of technically oriented factors and since safe-haven demand from large entities might favor gold as geopolitical turmoil continues in North Africa and the Middle East.

The gold/silver ratio is determined by dividing the price of an ounce of gold by the price of an ounce of silver. As the number falls, silver is outperforming, and vice-versa.

Earlier this week, as silver hit a 31-year high, Commerzbank reported that the ratio fell to 41.5 to 1, which it said was the lowest level since February 1998. As of Thursday afternoon, the ratio was around 42.5, down from around 55 as of early November and 64 as of late August. Based on average spot monthly prices going back to 1976, the ratio has averaged around 59...

Read more @ ORIGINAL SOURCE

Trader Dan Norcini's 4 Hour Silver Chart - update 5:42 PM Pacific [24.02.2011]

Stagflation 2011: Why It Is Here And Why It Is Going To Be Very Painful

February 24th, 2011 http://theeconomiccollapseblog.com

Are you ready for an economy that has high inflation and high unemployment at the same time? Well, welcome to "Stagflation 2011".  Stagflation exists when inflation and unemployment are both at high levels at the same time.  Of course we all know about the high unemployment situation already.  Gallup's daily tracking poll says that the U.S. unemployment rate has been hovering around 10 percent all year so far.  But now thanks to rapidly rising food prices and the exploding price of oil, rampant inflation is being added to the equation.  Normally inflation is a sign of increased economic activity, but when the basic commodities that we depend on to run our economy (such as oil) go up in price it actually causes a slowdown in economy activity.  When the price of oil goes up high enough, it fundamentally changes the behavior of individuals and businesses.  Suddenly certain types of economic activities that were feasible when oil was very cheap are not profitable any longer.  When the price of oil rises to a new level and it stays there, essentially what is happening is that more "blood" is being drained out of our economy.  Our economy will continue to function when there are higher oil prices, it will just be a lot more sluggish.

In some way, shape or form the price of oil factors into the production of most of our goods and services and it also factors into the transportation of most of our goods and services.  A significant rise in the price of oil changes the economic equation for almost every business in the United States...

Read more @ ORIGINAL SOURCE

Silver best-performing asset over last 5 years

Sidhartha, TNN, Feb 24, 2011, 01.34am IST The Times of India


NEW DELHI: Looking for the best returns on your hard-earned money? Call up any market player and the advice you are likely to get is to invest in silver.

The precious metal has emerged as the best-performing asset both over the last 12 months as well as over the last five years, comfortably outpacing gold, the traditional favourite.

"Silver is the new gold," confirmed Jayant Manglik, president of brokerage firm Religare Commodities.

The metal has already surpassed projections for 2011 that were in the region of $30 an ounce.

Read more @ ORIGINAL SOURCE

Trader Dan Norcini's 4 Hour Silver Chart - update [Wednesday, February 23, 2011]

IS THERE GOLD IN FORT KNOX? [Maloney & Morgan]

Posted Feb 23 2011

Eric Sprott: The Government Lied... There is No More Silver!

Casey Research Feb 21, 2011

Frank Veneroso’s book: The 1998 Gold Books Annual

MANIPULATION FAILS, METALS SPIKE [posted by SGTbull07 22.02.2011]

Why I'm Buying Silver at $30 [By: Jeff Clark]

-- Posted 22 February, 2011



The silver price has bounced 27% since January 28, a huge advance for a measly 16 trading days. It's already soared past its 2010 high and was selling for less than $16 this time last year, a double in 12 months. So, is it pricy? Or should we ignore the run-up and keep buying?
I've read a few articles that say we should expect silver to drop to the $25 level, and one pinpointed $22. Others, of course, see bullish tea leaves for the near term and believe it's headed higher. Of those that assert silver will decline, most believe it will be temporary, though one writer claims the bull market in precious metals is over (I think he's a holdout from the gold-is-a-bubble camp).
These authors could be right about a near-term decline, but I'm less concerned with what the price does this month or even the next few months, and more focused on where it's likely headed over the next few years...


Read more @ ORIGINAL SOURCE

Silver Better Than Gold?

"Caution: the chart below may cause excitement." By: Jeff Clark

Silver rose an incredible 3,646% from the November 1971 low of $1.32 to its January 21, 1980 high of $49.45 (London PM fix prices). Our current advance, through February 4, is 596%.

Gold advanced 2,333% in the 1970s; it's currently up 430%.

Trader Dan Norcini's 4 Hour Silver Chart - update [22.02.11]

Gold and Silver are holding well considering the barrage of selling across the commodity complex

Hedge Funds Boost Bullish Silver Bets as Mideast Tensions Mount

By Pham-Duy Nguyen - Feb 22, 2011 1:00 PM GMT+0800 www.bloomberg.com

Hedge funds boosted bullish bets on silver to the highest in almost four months as tensions in the Middle East sent the metal to a 30-year high.

Managed-money funds held net-long positions, or wagers on rising prices, totaling 35,159 contracts on the Comex as of Feb. 15, U.S. Commodity Futures Trading Commission data showed last week. That’s the most since October. Holdings have gained for three straight weeks, the longest streak since September.

Silver futures rallied 7.7 percent last week, the most since early December, as Egypt’s pro-democracy demonstrations spread to Bahrain, Yemen, Libya and Iran. Prices have doubled in the past year and touched $32.87 an ounce in New York on Feb. 18, the highest since March 1980.

“With the Middle East deteriorating, and the threat of inflation, you’ve got the big money flowing back into silver and precious metals,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “Silver provides better upside exposure than gold. Gold hasn’t moved as much, and people are chasing yields.”

Read more @ ORIGINAL SOURCE

Interview between GATA's Chris Powell and James Turk

 Posted Feb 21 2011, GoldMoneyNews


James Turk, Director of the GoldMoney Foundation and founder of GoldMoney, interviews GATA's [Gold Anti-Trust Action] Secretary/Treasurer Chris Powell of gata.org . This video is a must-watch for anyone with a clear interest in gold and free monetary markets.

Hold gold, silver if there is war: Marc Faber

Published on: February 22, 2011 at 15:50


BANGKOK (Commodity Online): It is wise to hold gold and silver and invest in precious metals during times of war and when geopolitical tensions and economic crisis hit countries around the world, says noted investment advisor Marc Faber.

Faber, who is famous for his prediction of the US stock market crash in 1987, said that commodities, especially gold and silver will be the wise investment options for people in the wake of rising inflation and troubled economies around the world.

Faber, who is the publisher and editor of Gloom, Boom & Doom Report, said that if there is a war, gold and silver would be desirable investments to hold.

“There will be times like the 1990s until 2008 when gold outperformed stocks and vice versa in 2009. But the key is flexibility. We don't know how the world will look in 10 years' time,” he told an investors’ gathering in Bangkok.

Faber said that treasury bills and deposits will no longer be a sure bet against market volatility.

According to Faber, the US Federal Reserve will continue to keep its interest rate below the inflation rate to avoid worsening impacts from the collapse of the credit market, which had expanded to three times the US GDP.

“The US will want to keep a low interest rate and expand the money supply to ease the public debt that stands at four times the size of its economy," he said.

Saying that gold and silver would continue to provide upside gains in the future, Faber said increasing demand for oil in emerging Asian economies and recovering US demand could lead to increasing geopolitical tensions in the Middle East and other oil-producing regions, contributing to upside gains for commodity prices and precious metals.

He also said that the US dollar could rebound in the next few months, but in the long term it would depreciate as the Fed is likely to expand its money-printing measures beyond the $600 billion already announced up to the middle of this year.

World Silver demand

Read more @ ORIGINAL SOURCE

Trader Dan Norcini 4 hour Silver Chart [21 Feb 2011]

Read more @ ORIGINAL SOURCE

Silver futures fall from record on profit-booking, global cues [22.02.2011]

New Delhi, Feb 22 (PTI) Yahoo News

"Today''s fall in silver prices was due to profit booking at record levels, attracted investors to offload their positions," said an analyst, adding that "the white metal may witness further fall in its prices in the coming sessions".

Market analysts said profit booking by speculators and resistance at higher levels in global markets, pulled down the silver prices from record high levels at futures trade here.

Meanwhile, silver prices lost as much as 1.8 per cent to USD 33.29 an ounce, reversing an earlier advance of USD 34.31, the highest level since 1980.

Read more @ ORIGINAL SOURCE

Max Keiser on Middle East Revolts [Feb 21 2011]

John Hathaway - Silver Breaks Out

February 21, 2011 [kingworldnews.com]


With silver trading at a new multi-decade high trading above $34 and gold up almost $20 breaking above $1,400, King World News today interviewed John Hathaway, Senior Managing Director of the Tocqueville Gold Fund.  Hathaway stated, “What I strongly believe is that the amount of paper we are seeing traded in both gold and silver on the Comex and in the derivatives market is nonsense.  It has to be something in the order of 100 to 1.  The fact that the market is moving today when the Comex is closed tells me it is not New York that is doing this, it is physical demand.”


Read more @ ORIGINAL SOURCE

Middle Eastern tensions will continue to benefit precious metals prices - MKS

21 February 2011, 02:46 p.m. 
By Kitco News 
http://www.kitco.com/


(Kitco News) -- The political unrest in the Middle East has seen governments act swiftly to try and snuff out any protests that could lead to large scale protests as seen in Tunisia and Egypt, said MKS. Without an end in sight, precious metals prices performed well over the last week and are expected to continue on that the upward trend. “The unrest is likely to see the precious metals and oil price well bid for the foreseeable future,” MKS said. Silver hit 31 year highs at $33.40, doubling its price from last year. Palladium touched a ten year high at $858.00 and gold has been trading over $1400.00. US markets are open tomorrow and the precious metals are expected to continue their bull run as safe haven buying, said MKS.


By Alex Létourneau of Kitco News

Silver Price Shoots Up To $34 - Technical Analysis by Derek [The Silver Log]

Silver moves past old high and heading much higher

By: Peter Cooper
-- Posted 21 February, 201



A week ago and you could have made a good argument for the silver price being at a double top. And typically after confirming a previous high, a downturn would be in prospect.
But not after prices jumped to $32.60 by the end of the week, comfortably placing silver in a fresh stage of upward momentum.
It is not hard to reason why. There is the weakening dollar. Geopolitical upsets like the Arab World’s revolution in Egypt and its knock-on impact on Bahrain. Or the US budget deficit.

Hard assets

The rush to hard assets continues. Some observers will not be convinced of the silver price break out until it is confirmed by gold which has been a laggard in this rally and still not above its recent high of $1,430.
That confirmation should not be long in coming. UAE gold sellers report shortages of gold in January as canny local investors bought at lower prices. Mints around the world are having to ration coins.
Metal analysts see silver now heading to $36 before any further correction. But silver has always been volatile. It does, however, almost always outperform gold on the upside as well as on the downside.
Gold prices do not seem very vulnerable to anything except a major correction in global stock markets. That could jump out of the woodwork at any moment. Stocks have not risen this far, this fast since the mid-30s and that was followed by a massive plunge.


Read more @ ORIGINAL SOURCE

Turk- Silver Backwardation [February 21, 2011]

By Eric King
Kingworldnews.com


With silver trading at $33.50 and gold breaking above $1,400 in early trading in London, King World News today interviewed James Turk out of Spain to get his thoughts.  Turk remarked, “The backwardation that we have been talking about has now blown out to 73 cents, that is unprecedented.  I find that number to be completely astounding!  Where are the arbitrageurs?  They could make a fortune.  This suggests to me that the arbitrageurs are out of the market because they don’t have the physical metal to sell to deal with the imbalance.”   

Turk continues:

“The fact that arbitrageurs are not pouncing on this huge bakcwardation is just further evidence of how little physical silver is available.   

Going back the KWN blog we did on February 10th, this backwardation in silver has potentially huge implications for the US dollar.  Metal goes into backwardation for two reasons - Either short supply, or nobody wants to accept fiat currency.  We know the backwardation in silver is because the supply of physical metal is so short.  

But the lingering question in my mind is whether the strong hands who hold silver are unwilling to take a fiat currency.  If that is the case, and this backwardation in silver eventually leads to a backwardation in gold, the implications for the US dollar, and indeed all of the fiat currencies in the world are ominous.”

When asked about gold specifically Turk stated, “Eric, here we have gold in London trading above $1,400 this morning.  For the first time in a couple of weeks, the gold chart is starting to show real strength.  I expect gold to be probing the old high of around $1,430 by the end of this week, given the strength we are already seeing.  The old high should not provide much resistance, so expect new record high prices in gold soon.”  

Read more @ ORIGINAL SOURCE