This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

What's Next For Silver?

As GATA has reported in the past, such tactics have quietly been taking place with the London gold market for roughly a year. But this is no "solution" for JP Morgan and the rest of the silver-shorts. Obviously, the first thing that most of these Comex customers will do after accepting their paper bribes in lieu of real metal is to buy even more silver for delivery in the next month's contract.

Markets rarely simply shoot higher in a straight line, no matter how out-of-balance that market had previously become. Thus silver investors (and especially those new to the sector) should not be recklessly buying silver, and by "recklessly" what I am referring to is the use of "margin." While the recent hikes in margin-requirements by the CME Group (owner of the Comex) were clearly intended to be manipulative, as we come closer and closer to an absolute default in this market, we should expect margin requirements to legitimately be raised still higher in the future. Those greedy traders who get hurt by such moves have no one to blame but themselves.

What we know about the silver market today doesn't give us the luxury of "mortgaging the farm" in order to place massive bets on silver. However, what current fundamentals do allow is for ordinary people to invest a significant portion of their wealth in this monetary "insurance" -- and know that they have no fears over the longer term of this investment losing value.

Such "one-way" trades are very rare in markets, and those sitting on the fence have no time to dither. Prices could explode still further, inventories could completely collapse -- or both -- in the near future. While investors will not enjoy quite as much "upside" on their investment as those who started their buying with silver closer to $10/oz, there can be no doubt that over the long-term that silver is heading to a three-digit price.

Knowledgeable investors in this sector already know that the average, long-term price ratio between gold and silver (over roughly 5,000 years ) has been approximately 15:1 -- and that was when silver was truly abundant in the world. With silver stockpiles exhausted, it would be silly not to expect silver to breach that ratio on the upside.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $123.25 -0.80%
FB $83.30 0.35%
GOOG $548.34 -1.23%
TSLA $185.00 -2.84%
YHOO $45.10 1.42%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs