Market Curiosity: Exploring Markets And Systems

February 21, 2011

Speculating on silver’s near term price and time targets using backwardation… (40, 47, moon, pluto) (corrected)

Filed under: Editorials — Tags: , , , , — Jeff Fitzmyers @ 1:52 pm

When to consider taking profits if long? Speculating: Not before 12 month SIFO at least gets above zero which, extrapolating from the 2008 backwardation won’t be for at least 6 days.

UPDATE March 3: I have some mistakes on the chart. This one is correct. A similar price rise for 2011 targets 38 $/oz.

Extrapolating from silver’s rise of 20% from the 2008 “midpoint” price suggests a target price of about $40/oz.
But 2011 silver being up double compared to 2008 at the midpoint suggests a rise of 40% which would be around $47/oz. (And each day that 12 month SIFO drops and silver rises just raises the targets.) That puts price at the old high, and past first notice day of Feb 28th. If fundamentals continue to be supportive, the moon is next.

John Hathaway: What I strongly believe is that the amount of paper we are seeing traded in both gold and silver on the Comex and in the derivatives market is nonsense. It has to be something in the order of 100 to 1. The fact that the market is moving today when the Comex is closed tells me it is not New York that is doing this, it is physical demand… Silver has broken out to the upside and because of that you have technical buying and short covering. This could in fact be a short squeeze.

This is why my account has a few COMEX silver options, but mostly is in SLW: Who knows if the COMEX is going to make it through this in one piece.

References and updates:
+ LBMA’s growing backwardation could mean silver rising for at least 14 more days
+ Silver’s current focal point: March silver’s open interest
+ Silver backwardation growing even as price rises: speculative targets based on 2008 LBMA backwardation: $37-42:

~The gold silver ratio (of above ground metal) is heading back toward about 15 to 1 which would put silver at about $90/oz with gold at about $1,400/oz. Except there are not 15 ounces for every 1 ounce of gold. Most silver is apparently used and now scattered in landfills. There are now supposedly only 0.2 ounces of silver for each ounce of gold. That would put silver at $7,000 with gold at $1,400/oz.

2 Comments »

  1. I’m liking your blog. I think you have an eye on the important parameters during this move. Do you post on Turd’s blog or others?

    Comment by silverflaunt — February 21, 2011 @ 2:42 pm

  2. Hi, Thanks for the complement. I only occasionally post on Turd’s blog (and others) using “cast22”. –When I do, the content is mostly the same as here.

    Comment by Jeff — February 21, 2011 @ 3:55 pm


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