Silver Morning Update

May 24, 2011 By 3 Comments

Silver appears to be attempting to break out of its trading range this morning.  Silver has been capped between $34-$35.50 for the past few days.  With this mornings downgrade of UK debt, the dollar has been selling off as many wisely realize that the US is not far behind the UK.  Both gold and silver have climbed higher throughout the morning session, with silver leading the charge all the way up to $36.59.
We are slightly wary of this current rally, if only because this is options expiration week, which is essentially prime time for cartel manipulation. 
One last take-down attempt this week would not be unexpected.  If silver can continue to consolidate, and hold above $34 throughout the week, we expect silver to make a run at $40 next week or the week after.  The spec long COT positions have not been this low since 2006…indicating that it is highly unlikely the cartel will be able to smash silver below the correction low near $32.  Continue buying any dips that reach into the $34-$35 range…silver seems to have a funny complacency about it that indicates to The Doc it may be preparing to make its next leg higher.


                


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Comments

  1. Anonymous says:
    May 24, 2011 at 12:56 PM

    impressive move by silver today.

  2. Anonymous says:
    May 24, 2011 at 1:36 PM

    Hi Doc,

    I have been looking at gold to platinum price ratios. Platinum has been trading over $300 more than gold for an ounce for a long time and recently it is now down to a little over $200. Is now the time to buy platinum or was there a recent platinum resorvoir found that I didn't hear about!

  3. The Doc says:
    May 24, 2011 at 1:42 PM

    Only current concern with platinum is whether the auto industry rolls over this summer when earnings are released. While it is a precious metal with monetary and investment properties, platinum's price swings are largely influenced by the economy as a whole. (Remember 2008 when the economic collapse took platinum from ~$2500 down to $700, making silver's decline look like a day in the park?) If you already hold platinum, i'd hang on…if looking to invest new funds now, I'd put them into silver which has corrected 30% from its recent peak. Not investment advice, but that's my personal outlook currently. – Doc

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