Wednesday, September 3, 2014

Nice 2% Drop in Precious Metals!

Gold and Silver both got smashed today down today, about 2% each.

Prices for Silver are near it's lows for the year and I felt that USD19.10 is a strong support for Silver, followed by the 18.70 point. Beyond that, it is reasonable that we could go down to as low as $15. I've seen quite a few patterns that have $15 as an objective.

Gold lost it's support at 1280. I don't think that we are done with gold yet, I think we can realistically see the 1240-1250 range offer a strong support.

The ideal scenario for me would be 1240 for gold and 18.70 for silver both holding these supports. This can happen through a US stock market correction (which looks imminent), that would trigger margin calls and forced liquidation of gold. On the flip side, I honestly doubt that margin traders even have much gold as collateral. I feel that the prices of precious metals are quite depressed to an unnatural level, and I am expecting plenty of upside in the longer term.

From the current prices, I think it is a good starting position for an investor with long term holding power. That means no leverage (no financing costs) and minimal storage costs.

I continue to accumulate both precious metals and average down my precious metal portfolio. Taking into account the physical premium and spread that I am paying, my liquidation market value is now ~5% below my initial investment.

Full disclosure: If you enter BullionStar through my site, and you buy anything, I get a small commission.

This is my main source of blog revenue. I prefer this to "donations" because I rather you get something that you want as well, instead of a tip.

Whether you buy at BullionStar directly or enter from my site, the price you pay does not change.

My personal precious metals investments are stored with BullionStar and I pay the same fees as any other regular customer.

No comments:

Post a Comment

Observe the house rules.