Silver Value may be ready to Rise

  • Posted August 1, 2012

As you know, we have been awaiting the inevitable rise in silver value. There is an obvious war against silver waged by the media and banksters alike. If the public were to realize true silver value, the fiat money scheme would come crashing down. Yet, in the face of this war, we now see reason to believe that the silver value will soon skyrocket closer to where it should be. [UPDATE: August 22| Recent Silver Performance Points to Breakout]

Real silver | silver value ready to rise |

Real Silver.

You know that there are basically two markets in silver. There is a physical market and the paper market. While silver value in the physical market is based upon the spot price in the paper market, there is really no practical correlation between the two. The physical is what you hold….in your hand. And the paper is what is traded through shares…shares which may or may be not be backed by the physical product (easily manipulated).

As you will see, the time for the rise in silver value may now be upon us. In both the physical aspect AND the technical side, there are signs pointing to another breakout. Could this breakout be similar to that of August 2010 – April 2011? That run up saw the silver value rise from $17 an ounce up to nearly $48. Here is a technical chart of the SLV silver spot price over the last 3 years.

silver chart | Silver Value about to about to rise |

Technical Silver Chart July 2009-July 2012

On the technical side, it appears silver’s cycles go from August to April. Before August, we see a consolidation period or we don’t, and silver’s next move is determined by how it performs versus its resistance levels.

The current consolidation period (circle on right) hasn’t been experienced since just before August 2010 (circle on left). Will the silver value subsequently run up as it did back then?

Another point to consider are the August 2010 resistance levels. For months before the breakout of 2010, the silver price met resistance at $17 and $19 dollars. Had the price breached $17, the price may have taken a big hit. But once the price held above $19 dollars an ounce, it literally skyrocketed. Looking at the current conditions, we see a similar set-up. This time, resistance is at $26 and $28 dollars. If the price breaches $26 dollars, it potentially could drop down to $19. However, if the $28 level is held, we could see a 2010 repeat. Several more weeks of consolidation may actually be a good thing as far as an increase in silver value.

Of course, we believe in stocking up on your PHYSICAL silver now. No matter what happens in the short term, the long term silver value will be higher. Actually, the physical side of the market limits the technical side through simple supply and demand. As the (paper) silver value decreases, more physical silver is bought up to take advantage of the low ‘price.’ So this can only be so effective, or else a physical shortage will throw the whole charade out of whack.

supply = demand....exactly? | silver value ready to rise |

Demand exactly equals Supply?        source:GFMS Silver Survey 2011

Silver is unique from other investments because what essentially happens is that paper is traded in for physical. This stems from the fact that many of those who are accumulating silver in its physical form will not easily relinquish it. A large portion of physical silver holders see the silver value in terms of ounces and not dollars. They hold for the long term with a goal of surviving inflation, hyperinflation, or some sort of economic collapse. They won’t be selling for any reasonable price. In fact, they buy more any time there is a dip in the price. That is what could put the system into chaos.

Currently, all of the silver mined ends up being consumed be it demand industrially, medicinally, or through investments. Any added stress on demand will drive the available supply down. That is how a manipulated paper price could bring about a shortage. Those accumulating silver will be able to acquire more ounces with less dollars……But then if supply is already at capacity, what about the industrial consumers? Will your phone or computer manufacturer just pack up shop? NO. They will probably buy months worth of silver at ANY price just to keep production going.

So whether the silver value rises sooner or later is irrelevant. Sure, you can maximize profits by timing the market perfectly. However, you can greatly increase the chances of coming out ahead by buying physical silver now, instead of later.

silver gold searches | silver value may be ready to rise |

Searched on Google

Also keep in mind that though silver has little to no room for the expansion of demand, it is still not really being talked about. You only have to check a google keyword search to see that people search for gold 3 times more than they search for silver. This is proof that there is no bubble in sight for silver. Think about how many people you know who are accumulating physical silver right now. You can probably count them on one hand.

What if people started talking about silver as much as gold? What if people realized its scarcity and started talking about silver MORE than gold? Where would the supply come from to satisfy such a demand? Sure, for now, silver is a niche market. But when people wise up to the fiat schemes and look to acquire real money, the slightest increase in demand could bring the whole system down.

So whether or not we are about to experience a big run up in silver value or see several more weeks of consolidation, you need to consider buying physical silver now.

Disclaimer: This is an opinion piece and Procinctu can not be held responsible for what you do or don’t do with your wealth. Hold fake fiat dollars or real silver money at your own risk.