SILVER TRADE UPDATE

On the trade side.. lets discuss what the general majority is saying...

What i gathered from my technical friends and websites offering technical chart predictions on silver is that 68% of them feel that silver will have a correction of 3-5% in the near term. The other agencies are talking about something called as Gold to Silver ratio. 

if you are talking about positive indications the net long positions in the commodities market is a clear indication of the bullish forces in play. I would love to get some data on Indian commodity Net long Positions on Silver. The US data shows both money managers and non commercials are net long on silver futures. 

Significance of Gold Silver Ratio

The ratio actually tries to bring in a relation between the two metals. 

The ratio is calculated by dividing the price of 1oz of Gold with the price of 1oz of Silver. 

The ratio says whether Gold is outperforming silver or silver is outperforming gold... 

The ratio is again compared on historical basis and some ppl say the ratio should come somewhere between 20, now i guess its somewhere around 50.

I don't like these ratio's because you cannot compare apples and oranges, i would agree there is food inflation prices of food articles are increasing. same way i agree metal prices are going up. Silver is totally different from gold. Silver has wide industrial applications which can give it extended demand side pressure. Gold has entered the speculative realm. 

Global holdings in silver-backed ETFs stand at over 448 million ounces (Moz). Over 326 Moz of physical silver are currently held by the iShares Silver Trust alone. Launched in April of 2006, the product trades on the American Stock Exchange under the symbol "SLV" and is managed by BlackRock. 

The investment demand of silver could bring in a next wave of bull rally for the metal. Reports suggest that silver stocks across the world are at generally low levels. I am a fundamental guy so for me the demand supply factors indicate bull rally. but like i always say the commodities market can get so irrational at times due to the leverage play they enjoy i doubt whether fundamental guys like me can survive.