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overtheedge
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These Next Few Days Could See Significant Price Resolution For Silver Investors

- Dan Dontrose - The Fundamental View

Awhile back, the market news was all about how China was stockpiling raw materials. I remember copper was mentioned quite frequently. Now Chinese demand has tapered off.

An analogy. You are expecting a hard winter ahead. You get busy stocking the pantry with all the staples. After some time, you notice you have a pallet full of 50# sacks of flour. You determine this is adequate and notice you have plenty of sugar too. Your buying level drops to consumption level.

In the market, a 10% rise in demand fuels the snot out prices (bubble bath anyone?). A 10% drop in demand is almost catastrophic (who pulled the plug?).

Success demands knowing the difference between consumption and consumer stockpiling. Silver might languish a while as industrial demand levels off or even drops (consumer liquidity). But the driver is gold. As the price increases, demand for golds ugly little sister will increase. When people are priced out of one commodity, they substitute another. Isn't that what the government does with the CPI? For most consumers, the tactic works just fine. Silver will regain much of its former monetary status as gold prices increase.

Commented 4255 days ago

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Beginning of the headline :I’ve been reading with great interest over the last month or so all the various articles on both the bear or bull side of the silver and to a lesser extent, the gold trade. Lately, the market has been flashing some signals that investors and market players need to pay attention to. What I am about to write is not a prediction of sorts but more of a guide as to what we “might” expect in the coming days or weeks in the silver market. (My guess is days and I will get into that a bit later). Most... Read More

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