Monthly Archives: June 2011

Is Now A Good Time To Buy Silver?

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The Stock Market is presently seven weeks into the trading session, and the only substantial activity that can be viewed is sell offs. This trend activity is worrying everyone involved. Many are beginning to believe that the market is heading for a major collapse.
 

The month of June did experience some big money players that commenced investing and grabbing up shares. This caused a temporary boost in the market. Commodities were at a low, so many began to buy silver and gold, and the like. These types of trends typically signify that the market is heading for a bottom.

In order to bottom, the big players need to commit more funds to the market and they need to do this for more than one selling session. The present trend in the selling is over a course of many weeks. This is indicative of a broadening of the price actions. What usually follows this broadening is selling exhaustion. This means that the bottom line on shares cannot be attained, and this makes for a perfect season to buy silver.

What appears to be the most important aspects of the market have been devoid of showings for the last coupleof weeks. These two sectors tend to weigh in heavily when speaking of the overall strength of the market. These two sectors include the financial and technology realms.

The financial sector has been lagging but seems to be at a pivotal point where a rebound can take place. In terms of the technology sector they have remained pretty cold, but are expected to heat up in the coming weeks. Both of these factors make this an ideal time to buy silver.

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Silver Prices are Dropping

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Looks like the dollar is gaining momentum, according to the Street, and has propelled the prices of silver as well as gold downward, in an across the board commodity liquidation.

Gold closed at $1520.50 an ounce, a $32.90 decrease for its August delivery, at the Comex division of the New York Mercantile Exchange. According to various indexes, during trading on June 24, gold traded as high as $1549.60 and as low as $1515, before closing at $1520.50

Silver prices also took a hit, the commodity closed at $35 an ounce, a $1.73 decrease, while in comparison the dollar, which has taken some hits in recent months, saw a .87% increase. The U.S dollar index closed at $75.61.

Why a turn in the tide? Phil Streible, senior market strategist at Lind-Waldock, speculates that “Investors are selling higher yielding assets and heading back to the dollar.” There are a couple key reasons why investors began to abandon the dollar and moved their money to into safer investments (like silver and gold). Chief among them was the current economic downturn. The Federal Reserve was buttressing the dollar because of the lack of stimulus; additionally, the central bank’s downgrade of the United States economy.

Other factors could be attributed to the sell-off of generally stable commodities, is doubt that Greece can be bailed out a second time which could lead to a default if funding can not be secured. Also HSBC reports that in China manufacturing activity slowed to 50.1 in June, compared to the readings in May of 51.6. These numbers could be indicative of a broad-range slowdown in the country. All of these determinants caused investors to sell-off assets that generally do well.

Reference:
http://silverinvestingnews.com/7567/gold-silver-prices-hammered-by-dollar.html