KultaKeskus.com

Silver - Not a short-term buy based on COT, June 27th 2005

The positive fundamentals for silver haven't changed. In the mid to long-term there is actually one more reason to be bullish on silver: the increased 'rumors' about a possible silver ETF. Silver has also held nicely above the long term up trend and should find support in the $6.80 area. However, from a COT point of view silver looks vulnerable in the short term.

Commercial short and net short positions are again at comparatively high levels. Today's levels have preceded short-term price declines in the past three and a half years. 

The COT numbers have worked quite well as an indicator for short-term silver trading the past few years. There might and will probably be a day in the not too distant future when the old pattern doesn't repeat itself. For the time being I think however that a silver trader should seriously take the COT numbers into consideration. 

It is sad that Comex futures trading basically sets the silver price, but then again, without this systematic price manipulation I believe prices would be at completely different levels and this great long-term investment opportunity in silver wouldn't exist. Even if we once again get a little few dime plunge in silver I believe that in a few years it will be hard to sport on a 7-year chart. I also believe that when silver finally breaks up there won't be much time to get on board. So make sure you know whether you are a trader or investor and why you are in silver. And if you are not, a few hours studying the subject might be your ‘best investment’ this year.

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KultaKeskus.com makes no guarantee about the accuracy or completeness of any data or information given in this article. This article should not bee regarded as investment advise. All investors should make their own market research and base their decisions on their own analysis and judgment. In no event shall KultaKeskus.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein. The writer of this article owns bullion, mining and explorer stocks and has in general a bullish view on precious metals. The author has not been paid to write this article, nor has he received any other inducement to do so. The author's objective in writing this article is to invoke an interest on the part of potential investors in gold and silver to the point where they are encouraged to conduct their own further diligent research. You may reproduce and copy this article provided that you link it to the original source.

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