The price crashes intermittently when the trade gets overcrowded. With just $50 billion of silver bullion above ground, it is a very small market and gets crowded easily. The Silver price has had four major crashes in the last ten years but has still increased five-fold.
In the first half of 2004 it fell by 36%. Then during the first half of 2006 the silver price fell 38%. In 2008 it fell for most of the year with the peak to trough fall a colossal 61%.Then in 2011, from its April peak to its low point in late December, silver lost 48% in price. But after each of these savage dips, silver SURGED.
The net result is, if you invested US$10,000 in silver at the start of 2004, it would now be worth US$48,309.
Last year left a bad taste in the mouth for many silver investors. The 48% correction was brutal. And now there’s a lot of negative sentiment around silver.
But – believe it or not – when negative sentiment builds to this point it is often the best time to invest. As Warren Buffet says, “be greedy when others are fearful and fearful when others are greedy.”
There are also some clear signs this latest correction is now finished. The main sign comes from the silver futures market.
READ THE REST OF THIS ARTICLE BY DR ALEX COWIE HERE: http://www.moneymorning.com.au/20120110/silver-price-ready-to-explode.html
CCU Price at posting:
59.2¢ Sentiment: Buy Disclosure: Held
