Albert Einstein - The Economist

When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?" —The Economist, June 13th 1992, p. 71).

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Silver Rush

Silver Rush Spreads to Stock Market

by Tom Lauricella and Carolyn Cui
Wednesday, April 27, 2011

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The mania for silver has spread to the stock market as day traders pile into the buying.

Trading got so heated during the past two days that shares traded in the iShares Silver Trust, the biggest exchange-traded fund tracking the price of silver, topped that of the SPDR S&P 500 ETF, usually one of the most actively traded securities in the world.

Day traders "are going crazy," says Joseph Saluzzi, co-head of trading at brokerage firm Themis Trading. "It's typical of the bubbly speculation that's been going on in silver."

On Monday, trading in the silver ETF was especially heavy, as silver prices soared to new 31-year highs and approached $50 an ounce. Silver is up 46% this year, part of a nine-month rally. The heavy ETF trading continued on Tuesday, as silver prices retreated.

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Volume in the silver ETF on Monday reached a record 189 million shares, compared with an unusually low 65 million for the SPDR. The trading in the silver ETF was five times that of the 37 million daily average of the first quarter and blew past its previous daily peak of 149 million shares set in early November. On Tuesday, the silver ETF's trading was 125 million shares, falling just 21 million short of the SPDR volume.

The volume in silver ETFs is remarkable because the ETF until recently was relatively small and was shunned by mainstream traders. Its ascent reflects a surge in appetite for silver, which itself is reflecting a rise in the price of gold.

Investors have turned to precious metals amid worries about inflation and the weakness in the U.S. dollar. The metals are increasingly considered attractive as a permanent store of value that doesn't diminish like paper currencies.

Trading volume of silver futures contracts on the commodities exchange owned by CME Group rose to 319,205 contracts on Monday, a 58.6% jump from its prior record hit in November. Month to date, the contract's average daily volume has more than tripled compared with the same period last year. Total outstanding contracts in the silver-options market also reached a record on Monday.

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The heavy trading interest came as silver closes in on its record price of $48.70. Silver touched an intraday high of $49.105 per ounce on Monday before settling at $47.1510, a 31-year high. It dropped 4.4% to $45.0580 on Tuesday.

In some respects, the surge in silver ETF volume above the SPDR was made easier by relatively lack of volume in the SPDR fund.

Many investors have been sitting on the sidelines ahead of a crucial Federal Reserve meeting Wednesday. Trading also was muted Monday by a holiday across most of Europe.

The evidence of day-traders flocking to silver can be seen in the surge of trading in high-octane ETFs designed to magnify the moves in silver prices up or down. Trading in ProShares UltraShort Silver, an ETF that offers a levered bet on falling silver prices, totaled more than nearly eight times its average daily volume over the last three months. The fund is down more than 40% in 2011.

Scott Redler, chief strategic officer at T3 Trading Group, says day traders started to buy into silver ETF trading when silver prices first broke higher two weeks ago.

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"When that happened, momentum traders put it on their radar," Mr. Redler said.

It hasn't been one-way bet, however. Mr. Redler was among those last week selling borrowed shares of the iShares ETF in anticipation of buying them back at a lower prices later and pocketing the difference.

But, he says, so many traders were looking to do the same trade that, starting last Wednesday, "it was really tough" to locate shares to borrow.

"You had to 'get on line,"' for the shares, he says.

Part of the most recent surge in silver prices was the result of those bearish traders scrambling to buy in order to cover short positions.

On Monday, "we saw a lot of the shorts capitulate," Mr. Redler says.

Write to Tom Lauricella at tom.lauricella@wsj.com and Carolyn Cui at carolyn.cui@wsj.com

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Gold Takes Off....Again! Thank You Bernanke!

Will Gold catch up to Silver's stellar run? Mark Gordon takes a quick look at gold.

More info at www.goldenticker.com -

Free Live charts at http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2670890

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Silver's versatility

Silver's versatility to help sustain rally

http://www.commodities-now.com/news/metals-and-mining/5983-silvers-versatility-to-help-sustain-rally.html

Singapore 27 April 2011

Silver's near record high has done little to deter investors' interest in the metal, while demand from the industrial sector should ensure the rally isn't a temporary phenomenon. A rush to buy physical silver this week, as prices came within cents of a record fix of $49.48 an ounce seen in 1980, shows that the metal's bright outlook could offset fears about a possible surplus this year.

With industrial use rising and investment demand showing no signs of slowing down, silver may avoid a repeat of a brutal correction in the 1980s that happened not long after the Hunt brothers tried to corner the market. A lack of substitutes means the industrial sector has to rely on the metal, prices of which have risen more than 60 percent this year after a gain of more than 80 percent in 2010. Gold, which often sets the tone for silver prices, has only gained around 8 percent to a record above $1,518 an ounce.

"Silver has always had quite a big chunk of demand which is price-insensitive in the short to medium term," said Philip Klapwijk, executive chairman of metals research and consultancy GFMS, which is expecting industrial demand for silver to hit a record this year.

"It is a net clear winner from new technology in the last 10 to 15 years. It obviously lost ground in photography, but more than made it up in industrial uses," he told Reuters. A versatile metal, silver is used in jewellery, water purification, photography as well as solar panels, flat-screen television sets, computers and mobile phones.

Although investment has played a key role in pushing prices to the current levels, silver is also riding high on growing demand from the industrial sector, which accounts for more than half of global silver fabrication demand.

Industrial applications demand rose over 20 percent yearon- year to 487.4 million ounces in 2010 after a miserable performance in 2009, when the global manufacturing sector suffered from the worst economic crisis since the Great Depression, according to GFMS. This year the consultancy expects industrial demand to rise by 8 percent.

As investors pour money into silver on uncertainty in the global economy, holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, rose to a lifetime high of 11,390.06 tonnes by April 25.

"While silver may face resistance at its 1980 peak in the short term, it could eventually head above $50 if gold holds firm," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

Silver traded around $46 an ounce on Tuesday as speculators booked profits after sending prices to a 31-year peak at $49.31 in the previous session.

Premiums for silver bars were steady at $1 an ounce over spot London prices in Hong Kong and at 50 cents in Singapore, with dealers noting steady purchases from India, the Middle East and China, the world's second-largest silver consumer after the United States.

"This is different from what happened in 1980s. The whole world is buying, it's not only one or two guys buying," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

The Hunt brothers, two Texan oil tycoons, bet their family fortune trying to corner the silver market between September 1979 and March 1980, driving U.S. silver futures to a record high $50.35 an ounce in January 1980. When their attempt collapsed silver prices fell back to below $11 by the end of March.

India, the world largest gold consumer, has also seen a surge in silver demand as an alternative investment to bullion, leading to tightness in the physical market.

"Investors have found a new fascination for silver other than as an asset. I may have sold 5 tonnes in 2-4 days," said Pankaj Kumar Agarwal, director of wholesaler Brijwasi Bullion and Jewellers Ltd, which supplies the metal to India's northern states of Uttar Pradesh and Bihar, and usually sells 4 to 5 tonnes a month.

"Silver sales have been quick and fast compared to gold." A dearth of supplies in the physical market in India is keeping premiums steady at 40 cents an ounce.

Fundamentals could help the metal resist pressure from mine supply, which rose 2.5 percent to 22,889 tonnes in 2010 -- a record high.

"If you look at the traditional fundamentals, the silver market is absolutely awful. We estimate the surplus equivalent to a fifth of the market, at about 5,000 tonnes in the past a couple of years," said Giles Lloyd, a metals analyst at CRU. "But investment demand is clearly greater than that. The surplus is not big enough for investors to hoard and prices are going up."

Implied net investment, which includes silver exchange traded funds, jumped to 178 million ounces (5,536 tonnes) in 2010 from 120.7 ounces in 2009, according to GFMS.

Ends --

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.