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"The story in silver is similar to gold. (Read the gold comments first). There are several differences however. Silver demand has consistantly been greater than annual new supplies for a number of years. With inventories dwindling it is hard to see silver staying down very long.
Silver is also more of an industrial metal than gold. It also can be consumed in ways that make it unrecoverable. Gold is almost always recoverable so there is no inventory crunch in gold.
I like buying puts in short dated options (two weeks to expiration) when silver is over bought and weak handed speculators are very net long. The washouts can be spectacular and very profitable. (See May 2006 silver chart as an example). If you would like to discuss this trading strategy, give me a call at 800-481-1613.
Overall, I think silver futures will continue to move higher through all of 2007 with occasional sharp corrections." |
