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Thread: Sprott launches more PSLV / Silver: key reversal today / gold seasonality VERY favorable

  1. #1

    Default Sprott launches more PSLV / Silver: key reversal today / gold seasonality VERY favorable

    Three very interesting things about pms:

    1. Sprott launched another offering for 200m$ worth of PSLV:

    Wondering why silver suddenly just popped $1.00?
    Sprott Asset Management has just announced a $200-$230 million follow-on offering for the PSLV.
    As Sprott will once again be draining all available physical supply from the market to complete the placement, it is safe to say we have likely seen a bottom in silver.

    TORONTO, July 12, 2012 /CNW/ – Sprott Physical Silver Trust (the “Trust”) (NYSE: PSLV / TSX: PHS.U), a trust created to invest and hold substantially all of its assets in physical silver bullion and managed by Sprott Asset Management LP, announced today that it has priced its follow-on offering of 18,100,000 transferable, redeemable units of the Trust (“Units”) at a price of US$11.05 per Unit (the “Offering”). As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 2,715,000 additional Units. The gross proceeds from the Offering will be US$200,005,000 (US$230,005,750 if the underwriters exercise in full the over-allotment option).

    The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust’s objective and subject to the Trust’s investment and operating restrictions described in the prospectus related to the Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per Unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.
    http://www.silverdoctors.com/sprott-...w-on-for-pslv/

    ---------------------------------

    2. Silver managed to close COMEX trading in the green today, i.e. above 27.15, so we have a key reversal - the most bullish chart pattern of them all. It opened lower than the previous day, made a spike low at 26.36 and rallied all the way above yesterday's close.



    After an up-trend:

    The Open must be above yesterday's Close,
    The day must make a new High, and
    The Close must be below yesterday's Low.

    After a down-trend:

    The Open must be below yesterday's Close,
    The day must make a new Low, and
    The Close must be above yesterday's High.


    Remember:

    The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.
    http://www.incrediblecharts.com/tech...y_reversal.php

    This is what a key reversal looks like:



    -------------------------------------

    3. Today, July 12th is historically the best day of the year to buy gold:

    Thackray’s 2012 Investor’s Guide notes that the optimal time to invest in gold bullion from a seasonal perspective is today, July 12.

    The summer months normally see seasonal weakness and it is thus a good time to buy on the seasonal dip.

    The Global and Mail reports that Thackray’s 2012 Investor’s Guide shows that the optimal time to invest in gold bullion for a seasonal trade is from July 12th to October 9th (see news: http://www.theglobeandmail.com/globe...28/?cmpid=rss1 ).

    “The trade has been profitable during 11 of the past 14 periods.”

    During the past 25 years, gold bullion has outperformed the S&P 500 Index by a very significant 4.7% during the period.

    The Globe and Mail notes that “traditionally, advances in gold during its period of seasonal strength is attributed to precious metal fabricators in India who purchase bullion to make into jewellery for the Indian wedding season that starts in late October. India is the second-biggest consumer of gold jewellery in the world behind China.”

    The trend may also be due to more sophisticated investors using gold as a hedge and diversification and increasing allocations to gold during the late summer and early autumn months which traditionally see weakness in stock markets.

    Timing markets is extremely difficult - even for the few successful traders. However, there are clear seasonal patterns that long term physical gold buyers can use to their advantage.

    http://www.zerohedge.com/contributed...nvestors-guide



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  3. #2
    Member Zippyjuan's Avatar
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    On the "surge in demand from India at this time of year" the article also noted:
    However, demand for gold jewellery in India is expected to be lower than usual this year because the price of gold in Indian rupees has moved sharply higher. Indian rupees recently fell to an all-time low relative to the U.S. dollar. The cost of gold jewellery in India has skyrocketed with the price of gold.
    and adds:
    Timing markets is extremely difficult - even for the few successful traders.
    China:
    Of greater importance, central banks including Russia, China and India are rumoured to be significant buyers. China continues to take action to diversify its reserves outside of U.S. dollar investments by adding to its gold holdings. China and India are rumoured to be buyers of gold for use in a gold-for-oil arrangement with Iran.
    Not in the article is that China has been increasing their holdings from their own production so they are not exactly making purchases on the open gold market which can drive up the price.
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  4. #3

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    If the Basel proposals for tier 1 status are implemented, (a supposed lack of) demand from China won't be an issue for gold.
    I compiled a "brief" history of events since October 2008 that are defining the global currency war and the role that gold is playing:

    Tin Foil Hats, Economic Reality and the Total Perspective Vortex

    Also, have you contacted your Congressional Rep and asked them co-sponsor Ron Paul's Rep. Paul Broun Jr.'s HR 1098 77: Free Competition in Currencies Act?

  5. #4

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    Quote Originally Posted by Zippyjuan View Post
    Not in the article is that China has been increasing their holdings from their own production so they are not exactly making purchases on the open gold market which can drive up the price.
    That's not the whole truth either. Gold imports from HongKong to mainland China are at all time highs and Chinas currency reserves are shrinking at the same time, so it's seems logical that they're using imports, too.

  6. #5

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    Quote Originally Posted by swissaustrian View Post
    That's not the whole truth either. Gold imports from HongKong to mainland China are at all time highs and Chinas currency reserves are shrinking at the same time, so it's seems logical that they're using imports, too.
    And if the Chinese were not buying their own production, that supply would be on the market. Gold is fungible and the market is international. Unless a country is entirely cut off from world trade, its gold production and gold purchasing effects world market price even if no net gold crosses the border.
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    Member Zippyjuan's Avatar
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    If it is going from the mines to the government, it isn't going on the market. Imports from Hong Kong last year were yes, a record at 431,226 kilograms. http://www.bloomberg.com/news/2012-0...gest-user.html


    Gold shipments to the mainland climbed in March to 62,913 kilograms, the Hong Kong data showed. That compares with 39,668 kilograms in February and 9,166 kilograms in March 2011. China doesn’t publish gold-trade data. Last year, imports from Hong Kong more than tripled to 431,226 kilograms.
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  8. #7

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    Roughly 7 weeks ago, I called a bottom in silver in the op of this thread. Silver actually made it's low on the 12th of July at $ 26.36, so I was right . It's now trading at 32.67, so it had an impressive rally during the last weeks. It needs a rest.
    It's very overbought (chart as of yesterday, today we added another 1%):



    We're now in the 32.5-33 resistance area which could take some time to be taken out.

    Lease rates have been falling quite a lot lately which is an indicator of growing physical supply:


    Speculative paper postioning (futures/options) has picked up quite a bit as well. These people sell very quickly once a correction starts.

    EUR/USD has rallied quite a bit, too, from 1.20 to 1.26. It's also up for a correction, usually dragging USD-prices of pms down, too.

    All in all this points to a high likelyhood of a correction in the near future.
    We'll see how much the correction costs us.

    -----

    All of the above applies to gold, too. The signs (overbought, falling lease rates, speculative positioning, EUR-strength) aren't nearly as dramatic as in silver, though.

    -----

    Buyer beware.

  9. #8

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    Basel 1 status is THE game changer. And it will happen.

    Quote Originally Posted by Bern View Post
    If the Basel proposals for tier 1 status are implemented, (a supposed lack of) demand from China won't be an issue for gold.
    "Like an army falling, one by one by one" - Linkin Park

  10. #9
    Site Staff - Moderator Brian4Liberty's Avatar
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    Quote Originally Posted by swissaustrian View Post
    Roughly 7 weeks ago, I called a bottom in silver in the op of this thread. Silver actually made it's low on the 12th of July at $ 26.36, so I was right . It's now trading at 32.67, so it had an impressive rally during the last weeks. It needs a rest.
    It's very overbought (chart as of yesterday, today we added another 1%):
    ...
    Buyer beware.
    Good call on the bottom. Summer is generally a great buying time.

    So on the correction, what do you think the next bottom will be?
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  11. #10

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    Quote Originally Posted by Brian4Liberty View Post
    Good call on the bottom. Summer is generally a great buying time.

    So on the correction, what do you think the next bottom will be?
    In the worst case, the 200 daily moving averages for silver and gold look like tempting targets, i.e. ~ 30.5 / 1650

  12. #11

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    Looks like the unemployment disappointment and QE expectations are putting your anticipated "vacation plans" on hold. The mini-correction this morning was short lived.
    I compiled a "brief" history of events since October 2008 that are defining the global currency war and the role that gold is playing:

    Tin Foil Hats, Economic Reality and the Total Perspective Vortex

    Also, have you contacted your Congressional Rep and asked them co-sponsor Ron Paul's Rep. Paul Broun Jr.'s HR 1098 77: Free Competition in Currencies Act?

  13. #12

    Lightbulb

    We're on track for another key reversal in silver today. It would have to close above $31, preferrably on huge volume and a nice spike.

    Last time silver went from 27 to 35 in 2 months after my call on July 12th in the op...

    Key reversal means:


    After an up-trend:

    The Open must be above yesterday's Close,
    The day must make a new High, and
    The Close must be below yesterday's Low.

    After a down-trend:

    The Open must be below yesterday's Close,
    The day must make a new Low, and
    The Close must be above yesterday's High.


    Remember:

    The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.
    http://www.incrediblecharts.com/tech...y_reversal.php



    Additionally, the traditional October weakness in the metals has passed. November is historically the best month for gold.




    Add on to that that bullion dealers are getting HUGE orders
    :
    http://www.pmbug.com/forum/f13/physi...html#post15648

    I say BTFD.

  14. #13
    Site Staff - Moderator Brian4Liberty's Avatar
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    Probably a good day to buy.

    We may be in a holding pattern until after the election. Obama wins, metals take off. Romney wins, might be a short term drop to a slightly lower level. Or maybe not. It's a gamble in the short term.
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  15. #14
    Site Staff - Moderator Brian4Liberty's Avatar
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    The Silver rocket has just launched.
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.






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