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Gold to Rise into June 5th Turn Date
-- Posted Sunday, 26 May 2013 | Share this article | 4 Comments
May 25, 2013 UPDATE:
Dear Friends,
I have received numerous requests for an Update to the prior dates and charts posted on jsmineset.com. I have waited this week as I have been closely watching the gold market, and I wanted to be certain of the next date I post.
I have attached my most recent gold chart for your review. Please take the time to review the information within it:
Original Post April 19 stating that April 17 was THE bottom (Perfect and Holding to Date).
TURN DATES:
(I) May 3 (Perfect Turn Date)
(II) May 13 Expected Turn Date; May 17 Actual Turn (only four days after expected turn)
(III) June 5 - NEXT TURN. NOTE: This anticipated turn will likely coincide with a simultaneous Equity Market Correction (6/6/2013)
(IV) All dates forward are PRIVATE -- For Subscribers only.
I know not one person that has been willing to go on the record and post what I have posted. No individual has yet called the bottom for gold, and I have already gone on the record announcing the bottom only two days after gold hit $1321. The recent drop (just a re-test, in my view) was just four trading days and only $100 off—and folks seem to have forgotten that my Bottom call of April 18 has (so far) held beautifully! I sold my gold at $1900, as you are aware, and the $1321 bottom has not failed me.
For those of you who simply buy and hold Gold and Silver: sleep well, my friends, and know that your decision is a wise one into the year 2020, when they will top!
I leave you with this…
By carefully studying history, we will never need to guess what our world will look like tomorrow—for tomorrow has already happened in our past! We must remember: our grandparents awoke one morning to worthless paper. History tells us where we are headed and how it ends!
I wish you all an enjoyable Memorial Weekend.
Thank you,
CIGA Bo Polny
gold2020forecast@aol.com
ORIGINAL POST on jsmineset.com, posted April 18th, 2013 at 10:00 AM:
“This is a man we should watch.”
– Mr. Jim Sinclair
Gold crashes, a bottom comes in at $1321 on April 16. Mr. Bo Polny buys that morning and sends Mr. Sinclair an email. Mr. Sinclair asks for a chart with 2 turn dates that he posts April 18, 2013:
http://www.jsmineset.com/2013/04/18/jims-mailbox-1236/
__________________________________________________ ______________________
A second post on jsmineset.com April 19th, 2013 at 10:00 AM
“Friend CIGA Bo P has had some important calls on the market over the past few years. For this reason I am sending this to you for your consideration over the weekend.”
– Mr. Jim Sinclair
Mr. Polny states low “$1300 Gold–Never Again” and “Mr. Sinclair, as you are aware, I sold my silver at $49 and gold at $1900.”
http://www.jsmineset.com/2013/04/19/1300-goldnever-again/
__________________________________________________ ______________________
A third post, on kingworldnews.com, April 22, 2013:
“This is why two of the professionals that did recognize $1900 as a price the Banksters were most uncomfortable with also see this month as the culmination of an attempt to destroy physical demand by crushing the paper price. I cannot speak for Mr. Fennen, but I know that is Polny’s view. We are witnessing history here, and before this is over the physical gold buyers will crush the central planners.”
– Mr. Jim Sinclair
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/21_Sinclair__Physical_Gold_Buyers_Will_Now_Crush_C entral_Planners.html
__________________________________________________ ______________________
A fourth post on jsmineset.com April 24th, 2013 at 10:28 PM:
Mr. Polny States…“With regard to Silver, it has been the weaker of the two as it sits at the BOTTOM of the 8-year support line of the gold/silver ratio that PERFECTLY matches the FINAL low of October 2008, which marked the FINAL BOTTOM! See attached gold/silver ratio chart.”
http://www.jsmineset.com/2013/04/24/jims-mailbox-1241/
__________________________________________________ ______________________
A fifth and sixth post on jsmineset.com on May 10th, 2013 at 7:54 AM and 5:04 PM, respectively.
After the Bottom call of April 18 for Gold, the next posted turn date, May 3, 2013, was hit perfectly at a $1487 high.
Mr. Polny states…“With regard to silver, this is a time for extreme caution! What is next? May 9-10, 2013… the drop! The question is, how low will it go?... silver is extremely vulnerable to a support break!”
Silver’s $22 low did in fact break on May 20, 2013.
http://www.jsmineset.com/2013/05/10/an-update-on-gold-from-ciga-bo-polny/
http://www.jsmineset.com/2013/05/10/update-on-gold-from-ciga-bo-polny/
__________________________________________________ ______________________
A seventh post on jsmineset.com on May 14th, 2013 at 3:20 PM
Mr. Polny states… “Yesterday, May 13/14, marked a turn date.”
His timing ended up being off by just four trading days. The last day down ended up being May 17, 2013.
http://www.jsmineset.com/2013/05/14/jims-mailbox-1256/
http://news.goldseek.com/GoldSeek/1369628603.php
I'm not in the group that trades or watches for bottoms and tops. I'm just simple folk, but, this sentence I can relate to...........
"For those of you who simply buy and hold Gold and Silver: sleep well, my friends, and know that your decision is a wise one into the year 2020, when they will top!"
Silver Market Update
Clive Maund
| Monday, June 10th
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While silver is on the defensive short-term there is plenty of evidence that over the medium and longer-term it is setting up for a powerful rally. COT’s and sentiment are already very bullish indeed, which means that when the turn does come, the rally is likely to be accentuated by panic short covering.
On its 6-month chart we can see how silver is being pressured lower by its falling 50-day moving average coming into play overhead, although the increasingly large gap between the 50 and 200-day moving averages is indicative of an oversold state that increasingly calls for reversal. Volume is still predominantly negative, suggesting lower prices dead ahead. After that we can expect reversal. There was a pronounced bull hammer in silver in the middle of May towards the intraday low of which there is quite strong support – silver may drop no longer than the low of this hammer.
http://67.19.64.18/news/CliveMaund/2013/6-10cms/1.png
The long-term 20-year enables us to see the big picture to advantage and to determine where this correction is likely to stop. If the low of the hammer fails then the price may dip a little lower into the strong support in the extensive trading in the $17.50 - $20 zone that occurred in 2008, 2009, and the first half of 2010. There is really strong support in this zone that should turn the price back up. Worst case is a drop to the lower trendline shown now at about $16, but this is considered unlikely given the already strongly bullish COTs and sentiment.
http://67.19.64.18/news/CliveMaund/2013/6-10cms/2.png
The retreat this year has given Big Money, the Commercials and the like, the opportunity to cover almost all of their shorts for a nice fat profit, and has left the dumb Large Specs smarting from huge losses. The COT chart shown below reveals that the Commercials have almost completed the process of unloading their short positions. The media driven Large and Small Specs, the “victims”, are totally discouraged and largely out. These are the lowest readings we have seen since the Precious Metals bullmarket started in the early 00’s and needless to say this is now a powerfully bullish situation. It is now only a matter of time, and not much at that, before we see a dramatic reversal to the upside.
http://67.19.64.18/news/CliveMaund/2013/6-10cms/3.png
The longer-term COT chart shown below provides additional perspective and on it we can see that the Commercials’ short positions have dropped to a very low level indeed – even lower than the freak market crash low of 2008. Meanwhile the habitual losers, the Large and Small Specs, are cowering in the corner licking their wounds, beset with timidity having reduced their long positions to very low levels. We are back at the starting line again with the stage being set for another major uptrend.
http://67.19.64.18/news/CliveMaund/2013/6-10cms/4.pngChart courtesy of www.sentimentrader.com
Thus it should come as no surprise to see that Public Opinion on silver is now at a very low ebb.
http://67.19.64.18/news/CliveMaund/2013/6-10cms/5.pngChart courtesy of www.sentimentrader.com
In the context of all that we have observed above, the silver seasonal chart is most interesting. For it reveals that June is the weakest month for silver, on a generalized seasonal basis, but after that, things look up in July and especially in September. What we can infer from this is that any short-term weakness over coming days and perhaps extending to 2 or 3 weeks should be seized upon as presenting a major buying opportunity. We will use this window of opportunity if it occurs as the perfect time to load up with a range of silver ETFs, better silver stocks – producers with little or no debt and Call options.
http://67.19.64.18/news/CliveMaund/2013/6-10cms/6.pnghttp://www.silverseek.com/article/silver-market-update-12168
http://www.youtube.com/watch?feature...;v=qRp-EpvWxBUhttp://www.youtube.com/watch?feature=player_embedded&v=qRp-EpvWxBU
Jim Willie: Next Scandal to Break is Leasing & Theft of 20,000 Tons of Allocated Gold!
http://silverdoctors.com/jim-willie-...llocated-gold/
Gold Market Update
By: Clive Maund
-- Posted Monday, 10 June 2013 | Share this article | 1 Comment
We are very close to or at a major bottom in gold and silver now, regardless of the potential for another short term downleg. This is made plain by the charts we are going to look at in this update. COTs and sentiment are now at extraordinary extremes not seen in the entire history of this bullmarket. This means that when the turn really comes we are likely to see a scorching rally which will be driven by massive short covering that will leave most investors standing, mouths agape.
On its 6-month chart we can see gold starting to be pressured lower again by its falling 50-day moving average, after a feeble recovery rally. Although it looks set to continue lower short-term probably into the support approaching its April panic lows, for reasons that we will come to later there is considered to be a fair chance that these lows will hold, or that if the price does break to new lows, it won’t be by much before it reverses to the upside after setting a bear trap. The position of the MACD indicator, which has largely neutralized following oversold extremes, certainly allows for further downside, but at the same time gold’s overall oversold condition is shown by the large gap that has opened up between the price and its 50-day moving average, and the 200-day moving average quite far above.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/1.pngGold’s 20-year chart is interesting as it shows that a very long-term trendline is in play that is supporting the price at about the current level. Given the now strongly bullish COTs and sentiment there is considered to be a fair chance that this trendline will cause the price to reverse to the upside very soon now. If it breaks down from this uptrend it will open up the risk of a drop to the strong support in the $1000 area, but this is considered unlikely because of the aforementioned positive COTs and sentiment.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/2.pngGold’s COT structure is little changed from last week. It is still strongly bullish with the Commercials having scaled back their short positions to a very low level, and Large Spec long positions having dropped back to a low level, while Small Specs have given up on the game altogether, which is a very positive sign. The slight uptick in Commercials’ short positions last week is thought to be evidence of some position taking ahead of Friday’s drop.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/3.pngThe long-term COT chart looks very bullish indeed, with the Commercials having scaled back their short positions to the lowest level since the bullmarket began. Meanwhile Large Spec long positions have been reduced to their lowest level since 2008, indicating general despondency typical of a market bottom, and Small Specs have abandoned all hope, with their long positions disappearing altogether. This all pervasive negativity on the part of traders is the stuff of which important bottoms are made.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/4.pngChart courtesy of www.sentimentrader.com
Meanwhile, Hulbert Gold Sentiment is in the basement, which is bullish…
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/5.pngChart courtesy of www.sentimentrader.com
The public have a low opinion of gold, another positive, as the time to buy is when most investors aren’t interested…
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/6.pngChart courtesy of www.sentimentrader.com
The Precious Metals assets of the Rydex traders are at a very low level, which is a good sign, as they make a science of being wrong…
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/7.pngChart courtesy of www.sentimentrader.com
The seasonal chart for gold shown below reveals that while June is overall a negative month, the best time of the year seasonally speaking is just around the corner, with August and September being the best months. The script this year could therefore involve a selloff over the short-term into a final bottom, and then a reversal and big rally in the ensuing months.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/8.pngChart courtesy of www.sentimentrader.com
The dollar’s rally reversed as predicted in the last update. After forming a choppy top area, it went into a steep decline which stopped abruptly right at important support near to its 200-day moving average on Thursday. Given the magnitude of the dollar’s decline it is surprising that gold did not fare better, and this does not bode well for gold short-term, as the dollar now looks set to bounce back, although longer-term the outlook for it is bleak.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/9.png
While we can all chortle with mirth at Japan’s laughable attempt to imitate the Fed by printing money recklessly – laughable because they do not have the comfy cushion of being in possession of a global reserve currency - and how they drove straight at a brick wall leading to the distinctive sound of rapidly crumpling metal. What happened in Japan to the Yen and then to the stockmarket should serve as a dire warning to the Fed of what could happen if it continues to abuse the dollar relentlessly as it has been doing. The dollar chart now looks very scary, and although it does look set to bounce back short-term from oversold, which could clobber gold and silver one last time, what looks likely to happen is that it will rally up to form the Right Shoulder of the potential Head-and-Shoulders top shown on our 6-month chart for the dollar index below. Use this as your guide for when to reverse positions – dump the dollar when it tops out at the prospective Right Shoulder high, we’ll offload our “insurance” PM sector Puts for a nice profit and we’ll go aggressively long the PM sector across the board – ETFs, better producing gold and silver miners with low or no debt, and Calls. Note here that the dollar rally up to mark out the Right Shoulder of our prospective H&S top may not get as far as shown on our chart - we could see a stunted Right Shoulder. COTs for the dollar are still extremely bearish, with Small Specs being insanely bullish, which is a huge negative.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/10.pngChart courtesy of www.sentimentrader.com
US dollar Public Opinion has moderated from its earlier positive extreme which also called for the recent drop. This moderation has created room for the expected short-term relief rally to develop.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/11.pngChart courtesy of www.sentimentrader.com
Although obviously cheap compared to last year it may still be a little early to buy PM stocks aggressively, which could easily fall victim to another short-term downleg, for reasons that are made plain by the 8-year chart for the HUI index shown below. This index broke down from a Head-and-Shoulders top earlier this year, whose minimum downside target on an equal move basis is about 210. If gold and silver drop short-term in response to a dollar bounce, they could get clobbered again, particularly as the oversold condition has unwound as is shown by the MACD indicator at the bottom of the chart having neutralized. There is some risk of them plummeting back to the vicinity of their 2008 lows. One big fundamental reason for the dreadful performance of mining stocks relative to gold is the huge increase in mining costs. However, when the turn does come a dramatic recovery is to be expected that will likely be amplified by short covering.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/12.pngWhile mining stocks are vulnerable to further short-term losses, there is plenty of evidence that they are close to putting in a major bottom. This includes of course the positive indications that we have already looked at above for gold and silver, but also various indications that the sector is way oversold already and approaching extremes that call for a reversion to the mean.
One powerful indication that the entire sector is close to a reversal is the chart below showing the ratio of the HUI index to gold. When this is at a very low level as now it shows over pessimism – when investors are scared and very negative towards the sector they favor bullion over stocks, and the more that this is the case, the more bullish it is. The situation is already really extreme, with this ratio already way below its low readings at the depths of the 2008 crash, and amazingly it is even approaching the dismal levels plumbed in late 2000 before the Precious Metals bullmarket even began. This is surely a sign that a bottom is close at hand.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/13.pngThe recent rotten performance of the Precious Metals sector is made plain by the chart below showing the ratio of the HUI index to the S&P500 index over an 18-year timeframe. This chart shows that the PM sector outperformed for most of the time from late 2000 right through to 2011, only really going into reverse since the late 2011 peak. However, the dreadful performance of recent months has brought it down close to an important relative support level, where there is a strong probability that it will reverse to the upside, and thus outperform the broad market once again.
http://67.19.64.18/news/CliveMaund/2013/6-10cmg/14.pngConclusion: all of the indications are that a major PM sector reversal is imminent, but we might see one last down first, particularly by stocks. Any such drop will be viewed as throwing up a rare opportunity to buy the sector at ridiculously low prices.
http://news.goldseek.com/CliveMaund/1370873400.php
Getting Ready
Sunday, June 9, 2013 at 1:42 pm
I suspect we are about to have a rather consequential week, therefore, here's a Sunday post to get you started.
There's certainly a lot of disgust and angst out there at the price action from Friday. Put me in that category, too. The U.S. unemployment rate rises from 7.5% to 7.6% and it's used as a rationale for a 2.5% selloff in the price of gold? Uhhhmm...yah...that makes a lot of sense. I guess what doesn't make sense is going over it all again as I made my frustration pretty clear in the previous post. In the end, the desperate scheme of The Bullion Banks to transfer as much short obligation onto the backs of the Specs continues unabated.
This week's CoT report showed next-to-nothing in terms of weekly changes to net bullishness or bearishness. The real action, though, sprang forth from the monthly Bank Participation Report. Again, it is this report that many analysts use to calculate the net long or short positions of the individual Bullion Banks...and this month's report is a doozy!
The report shows that not only are the major Bullion Banks no longer net short, they are actually NET LONG gold futures. I've seen one report that suggests this is the first time the Bullion Banks have been NET LONG since 2001. I've also seen a report suggesting that JPM itself is now net long as many as 50,000 contracts! IF this is true, and it's simply a matter of correctly interpreting the data (of course the DATA ITSELF has to be accurate), then there can be NO DOUBT that the precious metals are on the verge of a MAJOR BOTTOM followed by a ferocious rally.
The only thing I'd like to add to the discussion is the rationale for JPM's move into NET LONG territory. The shortages in their gold vaults has been well-documented and clearly this has much to do with it. But there seems to be a lot of curiosity this weekend as to how JPM can be net long so many gold contracts yet still be net short so many silver contracts. The answer likely lies in offshore and OTC positioning, but as this relates directly to The Comex, I think that part of the JPM gold position is actually a hedge against their remaining silver position. Huh? Let me explain.
As you know, I watch the OI and CoT levels pretty closely and I've been banging the drum pretty hard for months about the unusual and exceptionally large Comex Commercial GROSS LONG position. This gross level of Commercial long contracts has historically and consistently fluctuated between 30,000 and 45,000 for the past several years. At price peaks, the gross level would be close to 30,000 and, at price bottoms, the number would rise to somewhere near 45,000. Essentially, these "other commercials" added contracts at lows and then closed them out at highs, making a tidy profit from anticipating how JPM was going to once again fleece the Spec Sheep.
Well, something flipped with this last price cycle. At the lows of last August, the Commercials had again built up a large gross long base (47,797) and, by the time price was capped at the announcement of QE∞ in mid-September, this position had been trimmed back (32,206). During this entire Cartel operation in the nine months since, you would have expected that the Commercial gross long position would have grown again. But, would you have expected this?
DATE PRICE GROSS COMM LONGS
8/14/12 $27.78 47,797
9/11/12 33.46 32,206
10/23/12 31.66 35,786
11/27/12 34.03 42,525
12/31/12 30.29 45,415
2/5/13 31.79 46,293
3/12/13 29.13 51,929
4/9/13 27.97 61,060
5/7/13 23.94 65,703
6/4/13 22.52 66,857
OK, so what the heck does all this mean? I'll try to bring it all together in some sort of coherent form:
- Caught flatfooted and enormously short paper metal at the initiation of QE∞, a deliberate and calculated plan has been orchestrated by the major Bullion Banks, in particular JPMorgan.
- By driving price the price of gold almost $400 lower, The Gold Cartel has been able to reduce their general liability by nearly 80% (http://www.tfmetalsreport.com/blog/4750/speechless-turd) and, by virtue of the latest Bank Participation Report, some Bullion Banks have been able to move NET LONG for the first time in over a decade.
- If reports are correct the JPM has flipped from 50,000 net short to 50,000 net long, we must conclude that the operation to smash gold is close to complete.
- However, even though silver has been smashed a greater price percentage than gold, JPM has been been blunted in their attempts to completely cover their net short silver position as the "other commercials" (who at least on the surface don't appear to be JPM itself) have added at least 20,000 more longs than they have historically ever carried.
- And notice that the gross long position shown above has continued to rise, even in the face of sharply lower prices over the past eight weeks. These are some very deep pockets that, clearly, are not being shaken out. Instead of selling on further weakness, they continue to add.
- JPM could attempt to jam silver prices even lower in an increasingly desperate attempt to frighten these longs but at what cost? By doing so they lose big on their gold position and further exacerbate their already tenuous physical/deliverable gold position.
- And it is this "juggling act" that leads me to think that this entire operation, which began a brutally-long nine months ago, is nearly finished.
You see, by moving so deeply long in gold futures, JPM has effectively hedged much of the remaining silver short position that they've been unable to cover. At its most basic level...if they are forced to cover silver into a rising price, the potential losses they'd incur will be more than equaled by the gains they'd show in gold. (Just for fun...If you're long 50,000 contracts and price rises $500 back to the August 2011 highs, you make $2.5B!)
Now, all of this is well and good and NO DOUBT foreshadows much higher prices for both metals in the weeks ahead. However, none of this is going to matter much to the Spec HFTs which are expected to pounce on the metals this evening, particularly in silver. The fact that China is "closed" through mid-week will only serve to exacerbate the paper price volatility. However, IF I'm right about the ideas laid out above, price should show surprising resilience this week. Gold has been very well bought each and every time that attempts have been made to drive it down through $1350. Let's see if this continues. Silver, too, has hung tough around $22 and has bounced back twice from "shock lows" near $21.
http://www.tfmetalsreport.com/sites/...r_6-9goldd.jpghttp://www.tfmetalsreport.com/sites/...r_6-9silvd.jpg
So, I'll close this post the way I began. This is going to be a very consequential week for the metals...one that will tell us a lot about the short-term and intermediate trend for price as we head into summer. Nearly every indicator that I've traditionally followed is indicating that a bottom is near and trend change is coming. Let's see where we go from here.
http://www.tfmetalsreport.com/blog/4768/getting-ready
Silver Investment Demand: The Ticking Time Bomb
Steve St. Angelo, SRSrocco Report
| Monday, June 10th
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Even though silver investment demand has picked up recently due to the lowest prices in over two years, this may be just the tip of the iceberg for what is to come in the future. Currently, only a small fraction of investors understand silver's future potential but that will change in the next few years.
Presently, the Main Stream Media bandwagon has been quite busy putting out bearish analysis on silver demand and price. Whether it's due to a decline of industrial demand or a lack of silver investment by those in India, there doesn't seem to be a shortage of this sort of commentary. However, this should not be a concern for those who understand the true fundamentals in owning silver.
The underlying problem with this present bearish commentary is that it is so typical coming from an industry that provides forecasts based on superficial, outdated and manipulated data. The world's financial system is being propped up by trillions of dollars of worthless paper instruments that have totally distorted the market's ability to value assets correctly. Some of these so-called assets are severely inflated, while others such as silver, are tremendously undervalued.
Severely Inflated Supposed Assets
According to the Investment Company Institute's Q4 2012 report, the U.S. Retirement Market was valued at $19.5 trillion, up from $19.3 trillion in previous quarter:
Q4 2012 Retirement Market Break-down (in trillions)
IRA's = $5.4
DC Plans = $5.0
Private DB Plans = $2.5
State & Local Govt. Pension = $3.2
Federal Pension Plans = $1.6
Annuities = $1.7
TOTAL = $19.5 trillion
Now, if we compare that data to the ownership of gold and silver, we have the following:
http://67.19.64.18/news/2013/6-10sa/image002.gif
Here we can see just how insignificant precious metal investment is compared to the total U.S. Retirement market. Furthermore, the current total value of the GLD & SLV is only worth 1% of the entire United States IRA market.
How can this be? How did the public get hoodwinked into owning such a large degree of paper assets when gold used to be a part of an individual's portfolio in the past? The answer to that question is probably due to the public suffering from four decades of amnesia since the dollar was backed by gold.
The financial system is in a complete mess. The only thing holding the global paper facade together is the continued monetary stimulus and bond purchasing by the world's central banks. This sort of activity has a lifespan, whose death may be close at hand.
Silver Investment Demand & Price
An error that many typical analysts make today, is to produce a silver price forecast based on industrial demand. Even though industrial demand is one of the forces that impacts the price, investment demand has been the overwhelming factor in the past several years.
http://67.19.64.18/news/2013/6-10sa/image004.gif
From 2005, when the price of silver really started to take off and until 2011 when it hit a new annual high of $35.12, industrial demand mainly fluctuated between 450 & 500 million oz. However, total investment demand (coin-medal & implied net investment) rose from nearly 100 million oz in 2005 to over 250 million oz by 2012. It was due to this huge increase of investment demand during this period that pushed the price of silver to new highs.
Unfortunately for the precious metal investors in 2011, high silver prices generated levels of investment demand too rich for central banker's blood. So after a record of 5 margin hikes on futures contracts in May, 2011 and constant market rigging by central banks, silver investment demand declined in 2012.
This can be spotted quite easily if we look at official coin & medal demand (shown by the bars at the bottom of the chart) versus the price of silver in the graph above. As official silver coin sales increased from 40 million in 2007 to a peak of 118 million in 2011, the price of silver increased and peaked at the same time. But as demand for official coins such as Silver Eagles and Canadian Maples declined 21% to only 93 million oz in 2012, the price of silver fell along with it.
Furthermore, this was true with silver bar investment. According to the data from the 2013 World Silver Survey, silver bar investment declined from 100.6 million oz in 2011 to nearly half in 2012 at 53 million oz. In just one year, investment demand from these two sources declined 73 million oz (33%).
A Brief Word on Precious Metal Manipulation
Surprisingly, there is still a great deal of debate on the validity of precious metal manipulation in the market place. There are some very well known precious metal analysts who think the whole idea of market rigging is just plain silly. To them, it's just a matter of supply and demand. However this is indeed the problem at hand.
How on earth can the markets value a commodity properly when the majority of central banks in the world are manipulating and controlling the value of their respective fiat currencies via Treasury and Bond purchases? By continued manipulation of the bond and currency markets, the central banks have forced artificial demand in paper assets while attempting to destroy physical demand in gold and silver
Global Silver Investment Demand: A Ticking Time Bomb
This next chart shows just how much silver investment demand has increased in the past five years.
http://67.19.64.18/news/2013/6-10sa/image006.gif
In 2007, total global silver investment was valued a $500 million. However, five years later this amount grew to nearly $8 billion in 2012. While that sounds like a great deal, this figure seems insignificant compared to the dollar amounts being thrown around the world today.
If we were to add up all global silver investment from 2007 to 2012 we would end up with a total of $26.4 billion. That's right... $26.4 billion. It is a very paltry figure when we realize the Fed purchases $85 billion a month of U.S. Treasuries and MBS - Mortgaged Backed Securities.
Just think about it, the Fed bought more in MBS in the month of May than was invested in silver by the world in the past five years. When we examine these two figures together, it puts it into perspective just how out of whack the whole system has become.
The central banks will continue with the insanity of using monetary stimulus to prop up the world's financial markets until the whole system implodes. Once the Fed and central banks lose control of over the paper game, there will be a mad rush out of paper instruments and into physical assets.
Not many realize it, but Silver investment demand is a ticking time bomb.
At the SRSrocco Report, we explore how energy will impact the precious metals, mining and economy going forward.
http://www.silverseek.com/article/si...ime-bomb-12170