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friendly_jacek
12-16-09, 08:18 AM
Can someone tell me why gold topped at the very beginning of 2004 and silver went on 4 more months and 26% higher? The dollar bottomed roughly with gold top back then. The fed rate was increased in mid 2004. The reason I'm asking, 2009 has been a close copy of 2003 investment wise so far.
I'm long silver, energy, gold and miners, but not sure about gold and miners at this juncture.

http://www.amergold.com/email2/GMU_9-06_5-yr_silver.gif
http://www.amergold.com/email2/GMU_9-06_5-yr_gold.gif

Spartacus
12-16-09, 04:52 PM
If you find an explanation, it might look like it explains something but I bet it won't be THE REASON.

I remember on the first significant leg up on the rise to $21 there was a strike at a Mexican mine. Several Silver analysts said about the first blip up "this rise is of no significance, it will end when the strike does".

So that explained the uptick. Perfectly good explanation. And when the strike ended, the price kept going up. And up. And up. And when it fell ... no explanation. none. Well, one ... but it's been that guy's standard for 6 years on the Internet & 20 years in total .
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after writing, I realized this doesn't answer your question ... It's actually a rant - I distilled the most important point above

I gave up trying to analyze Silver price movements long ago. It's a tiny market that can be shoved around by relatively little money. The market cap of all the Silver mining stocks in the world used to be smaller than IBM's market cap.

I was looking for investment opportunities, got the idea for Silver in 2000 and spent the better part of all my spare time for what seems like a long time researching Silver at all the local university libraries and the Internet. This was before most of the current internet resources became available.

I've done tons of research since, trying to get a handle on the ups and downs.

This research became of use later when I would discuss Silver on the interwebs, and people would pose as experts, and they never heard of the LBMA clearing stats, the COT, didn't know what lease rates were, and so on ... there's one long thread on all those issues in the iTulip archives.

Other than letting me pose as some kind of expert, all that was pretty useless for pricing. Good thing i never tried to time entry and exit points. If I had done that I would be much, much poorer than I am now.

If you find an explanation, it might look like it explains something but I bet it won't be THE REASON.

I remember on the first significant leg up on the rise to $21 there was a strike at a Mexican mine. Several Silver analysts said about the first blip up "this rise is of no significance, it will end when the strike does".

So that explained the uptick. Perfectly good explanation. And when the strike ended, the price kept going up. And up. And up. And when it fell ... no explanation. none. Well, one ... but it's been that guy's standard for 6 years on the Internet & 20 years in total .

No one produced more Silver, no hidden private stockpile became available (I would have expected Szabo & Fekete to post a Butler-insult article about the private Eurobank stockpile and "I told you so Ted!!!"), none of the industrial uses vanished. Nothing. and the price fell by 50% in a couple of weeks.

and he could even be right


Can someone tell me why gold topped at the very beginning of 2004 and silver went on 4 more months and 26% higher? The dollar bottomed roughly with gold top back then. The fed rate was increased in mid 2004. The reason I'm asking, 2009 has been a close copy of 2003 investment wise so far.
I'm long silver, energy, gold and miners, but not sure about gold and miners at this juncture.

friendly_jacek
12-28-09, 11:08 PM
Thanks!!!!

thisandthat.nowandth
12-29-09, 12:14 AM
It might help to study the silver/base metals relationship...more specifically, copper in 2004.


http://www.kitco.com/images/commmentary/Watson/dec052005_2.GIF

http://www.kitco.com/ind/Watson/dec052005.html

friendly_jacek
02-21-10, 03:33 PM
LOL, I tried and it didn't help me.