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http://www.telegraph.co.uk/finance/commodities/8494041/Silver-loses-shine-in-20pc-tumble.html

Silver loses shine in 20pc tumble
The price of silver futures tumbled again on Wednesday, taking total losses to more than 20pc in a week amid fears that the precious metal represented a bubble bursting.
Silver – which has suffered its biggest three-day fall in 28 years – plunged from a peak of almost $50 an ounce last Thursday to a low last night of below $40.

gold next?

should have sold my silver coin collection. :(

The crash is on , remind me how much silver is down YTD RB?

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Ace. I've been waiting for RB to post to mark the bottom of this particular fall.

*Buys more silver*

:P

I hope people take this opportunity, who wish to do so, to get a position in silver or increase an existing one. IMO the best way is to average in and not to try and attempt to buy all in at an absolute bottom and end up delaying a purchase, thus risking paying more per ounce, or not purchasing because the price has turned up and decide to wait it out for another dip, which results in buying in at a higher price, if at all.

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Have a listen to Ben Davies recent inerview on King World News:

http://www.kingworld...Ben_Davies.html

Davies thinks that

- The silver market went a bit manic due to hype by some commentators (I think he's referring to Max Keiser)

- Increased recycling will help physical supply for the next six months

- Silver is volatile (duhh!)

However the bull market fundamentals are still intact if you are willing to wait.

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Saw this on the Reuters newsfeed:

Silver margins surge 84 percent in 8 days

  • Wed May 4, 2011 11:04pm EDT

NEW YORK/BANGALORE (Reuters) - The CME Group (CME.O) sharply raised silver futures margins for a fourth and fifth time in under two weeks, an 84 percent rise in trading costs that has helped provoke a nearly unprecedented sell-off.

The 20 percent slide in silver prices since they touched an all-time high of $49.51 an ounce on April 28 has been in large part driven by selling from speculators who may be unable or unwilling to bear the surging cost of holding positions.

Holdings in the world's largest silver-backed exchange-traded fund, iShares Silver Trust, fell by 521.8 tons, or 4.78 percent, from the previous session to 10,387.26 tons by May 4.

The CME, which typically raises margins when volatility in markets increases, dealt the latest blow on Wednesday, announcing two separate, successive margin hikes.

It said margins would rise to $14,000 per contract from$12,000 effective Thursday, May 5, and again to $16,000 effective Monday, May 9. Prior to April 25 the margin stood at $8,700 per contract. One contract holds 5,000 ounces, worth about $200,000 at current prices.

"The catalyst for the silver move could be the margin requirement hikes, squeezing out the pure short-term speculators that were playing a hot segment," said Joe Cusick, senior market analyst at Chicago-based online brokerage optionsXpress.

Silver prices tumbled 5 percent on Wednesday, taking three-day losses to 18 percent, only the sixth time since 1983 that prices have fallen so sharply in such a short time.

The volatile silver market has become a hot topic in financial circles over the past six months as it surged more than 170 percent from August, outstripping gold's one-third rise and attracting a flow of trend-chasing money.

But its recent ructions have shocked even veterans, with implied volatility in the options market surging from 37 percent to a post-2008 high of more than 55 percent in just two weeks, according to Reuters data based on 30-day at-the-money call options traded on COMEX.

I'll buy more if it drops below $30 TROZ ;).

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It could go down, it could go up! :rolleyes:

The risk is that it may not be a one way bet down.

This is NOT a criticism, but I have seen over the years on the HPC PM threads, the buying psychology, people wishing to buy and waiting for a dip and when the dip comes they hold out for even more of a correction on the fear that the price might drop further, but are wrong footed when the price increases.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/4_Dan_Norcini_-_Silver_Plummets,_What_to_Look_For_Now.html

To his credit Dan Norcini was waving many caution flags on the KWN Weekly Metals Wrap this weekend, and as it turns out he nailed it. For those of you who are on monthly accumulation programs in gold and silver, continue buying at the same time every month, do not try to get cute and time these markets. This is a long-term secular bull market and before it is over gold, silver and the mining shares will be in a mania that will be talked about for generations.
Edited by Take Me Back To London!
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The risk is that it may not be a one way bet down.

This is NOT a criticism, but I have seen over the years on the HPC PM threads, the buying psychology, people wishing to buy and waiting for a dip and when the dip comes they hold out for even more of a correction on the fear that the price might drop further, but are wrong footed when the price increases.

Well, I suppose so, but who cares when you placed your bets way before the long term trend started? Most HPCers on this forum already have significant holdings and will only be looking to top-up. Who cares if waiting too long risks missing out completely?

I have seen people jump in with both feet far too many times and, myself included, running out of cash to take advantage of opportunities.

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Well, I suppose so, but who cares when you placed your bets way before the long term trend started? Most HPCers on this forum already have significant holdings and will only be looking to top-up. Who cares if waiting too long risks missing out completely?

I have seen people jump in with both feet far too many times and, myself included, running out of cash to take advantage of opportunities.

How many times have we read on here, even after numerous opportunities that have arisen in the PMs to buy at an advantageous price, the regret afterwards when the price is higher and then the desire for another correction etc.

As for jumping in with both feet, I like your attitude, I have seen to many people paralised with fear. As Del Boy says, "Who Dares Wins". :D

DelBoyMM_203x150.jpg

As for taking advantage of other opportunities, vehicles like BV or GM are convenient to liquidate PM savings, as one would do with cash in a bank/building society account.

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Take me to London, I think that if one were to buy today, it would in be wisest to buy in tranches, rather than jumping in with two feet. In the last hour this has plunged further.

Doesn't matter to me as this is developing into my ideal spring top up. Newbies buying today may well have to stomach massive paper losses before it comes back up or a real divergence emerges.

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Take me to London, I think that if one were to buy today, it would in be wisest to buy in tranches, rather than jumping in with two feet. In the last hour this has plunged further.

Doesn't matter to me as this is developing into my ideal spring top up. Newbies buying today may well have to stomach massive paper losses before it comes back up or a real divergence emerges.

I agree that the safest way is to average in and then, IMO, at some point in the future to average out.

With regards to both feet in, I wish to compliment you on taking decisive action to preserve your wealth. I know people who have 100% cash in the bank and are fixed on the idea that one day things will change with regards to savers being rewarded with a decent interest rate, all they need to do is wait a bit more, the years just roll on. One day they will be right, but the purchasing power will not be the same when this all comes to an end.

As you point out there has been a plunge in the last hour for silver and gold, back to where it was 2 weeks ago. Will this continue and or staberlise giving an opportunity to make purchases in the summer, in a calm and orderly fashion or will it quickly snap back up violently?

There will be those that will puking up at this correction, however there will be many rock solid, physical buyers, the buy and hold types, who are aware of the perilous state and decline of fiat, will be stripping out the coins and bars right down to the floor boards at the dealers, as they did during and after the 2008 deleveraging.

Edited by Take Me Back To London!
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Or not average in at all. ;) Now that its missed key support levels, it will put doubt on the rest. I have never believed this BS about trendline support.

I agree that the safest way is to average in and then, IMO, at some point in the future to average out.

Edited by fallingbuzzard
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Just bought 22 ounces. Lovely jubbley.

I am so scared, the horror, the horror of this crash, I ordered another tube of 20 ozs today. :lol: I'll be giving the truck a check over this weekend, making sure the reverse gear and tail lift are in fine fettle, ready for a bit of shopping down at the bullion dealers.

What has changed, paper is still shite.

Anyway, someone who I have high regard for is Ben Davies of Hinde Capital who got what was building up in the silver market and what would happen in the second half of 2010 bang on.

His latest comments out on King World News.

Ben Davies called for a 3 to 5 day $15 decline in silver and that is exactly what happened. I wanted to catch up with the CEO of Hinde Capital to get his thoughts on where we are now in the silver market. When asked if silver is bottoming Davies replied, “As a firm we have covered all of our hedges on silver and we have started to accumulate physical silver. Let me add that this is the swiftest 30+% decline in this bull market. If you are a cash buyer of physical silver then you should now be accumulating silver. There is always a danger in catching a falling knife, but you have to remember that silver has intrinsic value.”

“Nonetheless we are keeping an eye on the US dollar which could continue having a bounce post Trichet’s comments. There’s clearly an unwind of commodity positions in general with crude down almost 10%. The market in silver is extremely oversold and it would not surprise me to see a bounce overnight in Asian trading.

We have seen a 10 standard deviation move in silver on multiple periodicities that we track, the likes of which we haven’t yet experienced in this bull market. I want to reiterate that Hinde fundamentally believes that the silver market had reached a point of criticality at this last peak whereby the market was vulnerable to a swift and violent correction irrespective of any external trigger and that is what occurred.

In our opinion, such moves as we just experienced in the paper silver market have been exacerbated by system traders exiting the market. This last decline today was more a function of liquidation due to margin calls as a function of the whole commodity sector selling off.

This is the start of a great opportunity to accumulate silver. All of the key fundamental issues in the world have not gone away nor those specific to silver such as the fact that it is under-owned and short of supply in the medium-term. All of those conditions are still in place for silver. KWN readers should remember that on corrections beyond 20% in a secular bull market you are supposed to be buying.”

When asked about gold Davies stated, “The gold market has been dragged down with the precipitous fall in silver, but we believe gold will hold above $1,450. We believe between now and August we will find a floor and the next up leg in gold will begin. That next leg higher in gold should take us over $2,000.”

Davies is correct, in secular bull markets you are supposed to accumulate positions on significant corrections. Silver just experienced a tremendous decline, so you will start to see the big money accumulate on weakness.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/5_Ben_Davies_-_We_Are_Now_Buyers_of_Physical_Silver.html

Edited by Take Me Back To London!
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I'm just waiting and watching.

I've had money in my Goldmoney account for weeks. I watched the price moving up into the 40s, then touching 50, all the time thinking "should I buy". Eventually my usual pathetic procrastination paid off.

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