Jump to navigation

Subscribe Follow Magazine

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Hard Assets          

Market Data

more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

Check out Resource Investor - Polls on LockerDome on LockerDome

When is the Silver Price Going to Get Its Mojo Back?

By Peter Cooper

December 10, 2012 • Reprints

Take look at the five-year chart for silver, then you can appreciate both why silver investors are so anxious and why they really have nothing to worry about. True if you bought silver 19 months ago when it hit $48.50 an ounce ready for an exponential take-off then you have reason to be annoyed.

However, silver did not break its $50 all-time high at that point and fell back into a trading range. Our old friend Gerry Schubert at Emirates NBD Bank still holds the record for having placed the highest priced order for silver ever back in 1980 as a young trader.

Rising Trend

Then again anybody who bought silver in the run up to $30 has not lost money, and the long-term trend is still upwards. Silver will only recover its mojo when gold prices begin to advance again.

 

As readers of ArabianMoney will know there are some very hopeful indicators of a gold price advance early in the New Year.

The Chinese are planning to launch a gold ETF and double their gold consumption to 1,000 tons per annum over the next three years (click here). Goldman Sachs is currently fixing the market so that it can go long for the next price advance (click here). And the central bank printers of money are going into overdrive (click here).

Silver almost always rises in tandem with the gold price and outperforms by a factor of two over the very long-term. The gold price rose by about half as much as the silver price in the first decade of the 2000s. It is a reasonable expectation that it will do the same in the final stages of the precious metals boom.

Boom Over, No Chance!

Is this boom over as Goldman Sachs is saying “might” be the case, although not with much conviction? Well two things are missing: commodity market booms always end with a price spike, and that is exactly what investors are complaining about not having seen; and retail investment interest in the precious metals remains very low by comparison to say the rush into gold and silver witnessed in 1979-80.

There are no queues down the road outside gold and silver shops, though we note that most large towns do now have somewhere to buy and sell precious metals and that was not true a decade ago. So when the retail investors finally bite they will be able to buy.

When people you know who are not very investment savvy begin to say they are buying gold and silver and the man sitting next to you on the Dubai Metro is looking at gold prices then it might be time to worry seriously about the sustainability of precious metal prices.

But we are far from that date, or at least 12-18 months. 

About the Author

ArabianMoney.net editor and publisher Peter Cooper is based in the Dubai Media City, and has been working as a senior journalist in the region since 1996. He was then the founding editor of the Gulf Business, the first-ever business magazine published in Dubai. In the year 2000 he was a founding partner in the business news and information website ameinfo.com.

His book about ameinfo.com, ‘Opportunity Dubai: Making a Fortune in the Middle East’ was No.1 in The Daily Telegraph Book Club for six months. An Oxford graduate in politics and economics, Cooper spent a decade in London as a financial journalist specializing in real estate and construction. He is also the author of ‘Dubai Sabbatical: The Road to $5,000 Gold’.

Related Articles
Indian silver takes a tumble
Gold still under pressure from dollar
Indian gold imports decline
Gold jewelry exports from India more than double this year
Precious metals have a long way to go
Previous
Bullion Investment Continues to Be Buoyant ‎
Next
An Emerging Low in Gold Stocks?
Related Terms
Goldman Sachs 868retail investors 405precious metal prices 80retail investment interest 2Emirates NBD Bank 1young trader 1bank printers 1Gerry Schubert 1

Subscribe Follow Magazine

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images