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Old 12-22-2011, 10:47 AM   #1
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Silver demand and supply analysis

I found this nice technical anylysis http://www.scotiamocatta.com/scpt/sc...recast2012.pdf

I think overall in 2012 silver will do better ôn a % basis than the major stock indexes, bonds and cash. Dare i say also than gold, the metal of the gods? After the 2011 correction silver is set to do very well in 2012. Not that gold will not be great (i think a 20-30% rise in gold dollar prices is what we can expect by end of 2012, which is a superb return in its own right), but silver should do way better than that (my target is 50-80% dollar price rise).

Main driving factors are solar panels, nanotechnology, chinese investment demand and QE3 coming up.
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Old 12-22-2011, 11:15 AM   #2
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I'm not sure if we need QE to get silver and gold going..

What we really need is the US dollar to weaken and the "Short Euro to oblivion" trade to finally end. That should be enough to push us through technical levels that would turn market sentiment more bullish.

Right now, we have the highest short interest in the Euro ever. We have the highest bullish sentiment in the dollar over the past 8 years. I'm not sure things can get more one sided than they already are.
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Old 12-22-2011, 11:42 AM   #3
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Harvey Organ has a piece that shows if just 4% or so of all Comex holders demand delivery, the system crashes in upon itself and the fraud is exposed. I think it is unfortunate that so many of these paper holders are merely along on the arbitrage train for an easy buck, so will never pay up and take delivery.
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Old 12-22-2011, 11:43 AM   #4
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Chinese demand might implode along with their cratering real estate / mortgage market. They have some tough problems with their domestic economy to worry about.

That said, I fully expect silver to perform brilliantly in 2012. I think we see some supply shocks in the physical market finally break the paper markets.
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Old 12-22-2011, 12:46 PM   #5
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Originally Posted by PMBug View Post:
Chinese demand might implode along with their cratering real estate / mortgage market. They have some tough problems with their domestic economy to worry about.

That said, I fully expect silver to perform brilliantly in 2012. I think we see some supply shocks in the physical market finally break the paper markets.
You may be right, but i think the probability of a Chinese economic crash is remote in the next few years. Their exports and internal demand are surging. While they do have a real estate bubble, and a rising inflation, many now are protecting their wealth with gold and silver, so both the metal of the gods (gold) and silver experience a surging demand among Chinese. A real estate crash will only encourage more precious metal purchases. What other options do they have? Investment in dollars is foolish and staying in yuan with inflation eroding it is equally foolish. The chinese are just beggining their love affair with precious metals and i think they will continue this for decades. Dont forget, for mainland chinese private individuals it was illegal until a few years ago to own gold and silver. And traditionally they trust paper about as much as you would trust a dog to guard your steak while you are away.

With real estate peaked, the dollar weak, at least some part of the surging new wealth will have to be parked into precious metals. And now it is legal to do so.
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Old 12-22-2011, 02:38 PM   #6
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This debate is going on between top money managers. Faber vs Rogers...
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Old 12-22-2011, 03:39 PM   #7
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Originally Posted by dereksatkinson View Post:
Right now, we have the highest short interest in the Euro ever. We have the highest bullish sentiment in the dollar over the past 8 years. I'm not sure things can get more one sided than they already are.
Dollar's not that weak relatively to other currencies, not sure where you're getting that one. My year DXY plot shows it pretty high for the year.

As another trader, I'd have to go with the quote above - when things are too one sided, look out for that swing back - it's coming, and usually the more one-sided, the more like a jibe on a sailboat - don't get knocked overboard by the boom when it swings by.
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Old 12-22-2011, 03:44 PM   #8
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Originally Posted by DCFusor View Post:
Dollar's not that weak relatively to other currencies, not sure where you're getting that one. My year DXY plot shows it pretty high for the year.

As another trader, I'd have to go with the quote above - when things are too one sided, look out for that swing back - it's coming, and usually the more one-sided, the more like a jibe on a sailboat - don't get knocked overboard by the boom when it swings by.
The EURO has very high short interest..

Dollar sentiment is at an 8 year HIGH.

I'm saying that I think people are overly bullish on the dollar and overly bearish on the EURO.
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Old 12-22-2011, 05:23 PM   #9
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Originally Posted by dereksatkinson View Post:
I'm saying that I think people are overly bullish on the dollar and overly bearish on the EURO.
No question about that in my mind. Lesser of two evils, given no good alternatives to choose from, and based only on current events. If ANY sound money was on the table as a viable medium of exchange option, both the dollar and the EURO would be losers.
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