Silver Editorials & Commentary

In its latest Gold Demand Trends 2010 report, the World Gold Council said gold demand hit a decade high as jewelry buyers returned to the market after the previous year's near-absence and central banks became net buyers.

Let's take a look at gold, silver and the Dow Jones from their lows of the Credit Crisis, starting with the Bear's Eye View and price charts for silver.

Political as well as economical developments around the globe, especially in the Middle East, have affected the commodity markets during the previous week.

Today the stock market bled out with a river of red candles. All of the recent gains vanished in one session. Strong selling volume sessions like this are typically a warning sign that distribution selling is starting to enter the market.

Silver's massive autumn rally has utterly captivated speculators and investors, their appetite for all things silver is insatiable. Interestingly a major driver of this metal's recent surge was stock-market buying of the flagship silver ETF, SLV.

It's great to be back after the holiday season. Things are as exciting as ever in the markets and around the world politically.

Thanks to its awesome autumn rally, silver has become something of a rock star in the commodities world. Investors and speculators alike are enthralled with this white metal.

Last week we had typical pre-holiday light volume trading going into US Thanksgiving.

We have been proposing the monetization of a silver coin in Mexico since 2001. According to our proposal a one-ounce coin of pure silver, with no engraved value, would be given a monetary value by the Mexican Central Bank.

The past few months it seems the gold and silver play has been getting a little crowed with everyone wanting to own gold.

Max Keiser is witty, brilliant, entertaining and informative. I also believe that his latest call for $500 silver is wrong. (See http://www.youtube.com/watch?v=UjDQUP-e_zI).

I gave this article the same title of a favourite Fleetwood Mac song of mine.

A love affair with silver is so natural. The fundamentals are astoundingly positive and bullish in price prospects. My basic argument has been repeated many times. Industry has countless uses for silver, significant demand.

Trading commodities and indexes through the use of exchange traded funds sure keeps things simple for an average trader.

I'm referring to the 1876 battle near the Little Bighorn River in Montana where General Custer made his last stand against the Lakota and Northern Cheyenne Native Tribes.

What a nutty week for the equities market! The bleeding has not led up with almost 2 weeks of straight selling.

Last week looked and felt like a pivotal week for both stocks and commodities. The past two weeks have had investors and traders in a panic as they try to find safe investments for their money.

It's been an exciting week for traders as volatility levels are through the roof and the broad market is moving up and down like a yoyo.

Last week was amazing for both gold and index traders as gold surged higher and the SP500 tested a key resistance then fell 4% in our favor.

Unless you are a real silver bug or a much studied gold bug, the concept of Silver Thursday will have little meaning for you. Silver Thursday took place on March 27, 1980, and this-coming Saturday marks the thirtieth anniversary of that event.

Last week was nothing special as stock market continued to drift higher on light volume and the Volatility Index (VIX) reaching a new multi year low.

So far this week has been pretty slow. Large cap stocks continue to lag the market which can be observed by looking at the Dow Jones Industrial Average which still has room to move higher before breaking the January high.

Three weeks ago on February 5th, we saw an extremely high level of fear in the market with selling vs. buying volume at a 9:1 ratio. We note that in 2009 this extreme level of fear occurred at the bottom of each significant pullback.

The stock indexes have been trading very choppy making it difficult for swing/trend traders. It's during times like this when seasoned traders rise above the herd of average traders.

The past three weeks have been interesting to watch as the Dow (DIA ETF) has broadened causing traders to be shaken in and out of positions. Commodities have been under pressure as the US dollar has risen.

ETF trading has made it so easy for traders and investors to get maximum exposure to the entire market without the high fees of mutual funds and manager.

The market has had a fantastic week so far for stocks and precious metals. The financial and energy sector are underperforming which is a concern, but we continue to hold our positions and will wait until a reversal to lock in our gains.

Since the market crash in late 2008 we have seen investors favor quality stocks that pay dividends and have steady earnings. Fast growth companies and equities with physical resources like commodities have also done well.

So far this week has been slow in regards to commodity ETF funds. Gold continues to shine while silver refuses to make a move higher.

Everyone is talking about commodities as the place to be in the coming months. I tend to agree, but it is still important to know where each commodity is trading to maximize returns and reduce risk.

A well-known truism is that every investor needs to start with savings. But what if that "savings" gave the investor too much exposure to risk? What investors or people in general need in this financial environment is savings that don't deteriorate.

The past week in gold, silver, oil, natural gas and the broad market wasn't anything to write home about. We are seeing controlled profit taking which is making the market choppy.

Commodities so far this week have not changed much. But I can point out a few things for us to watch Thursday and Friday.

Precious Metals
- Gold GLD fund - Silver SLV Fund - PM Stocks GDX Fund

At this point, I am a little reluctant to state this is the final blast-off and that we will not see gold below US$1,000 ever again. Certainly the percentages are with the precious metals investors and it seems gold has nowhere to go but up.

Commodities have and continue to be a fantastic trading vehicle for those who can stomach volatility. After last year's market crash most commodities pulled back to normal if not lower than normal trading ranges.

Gold, silver and commodities moved higher this past Wednesday on the back of confusing data about the current state of the "green shoots recovery".

The market continues to whipsaw traders out of positions as volatility rises. I have put together a few charts to show you where each of our commodities are trading along with the SPX (SP500 index).