Solid Support for Silver

I apologize for not posting more frequently, but I've been very busy lately. Yesterday, I sent out recommendations for both Red-Hot Canadian Small-Caps and Red-Hot Asian Tigers. And I've been working on my Money and Markets Column as well.

Here's a (very rough) preview of what's in Money and Markets on Wednesday. You might find it interesting, especially if you're interested in silver...

Silver Finds Strong Support

Last week, I told you a bunch of reasons why silver should head higher. The most basic one is simple supply and demand -- according to CIBC World Markets, there will be a deficit of 77 million ounces of silver this year alone. That’s a powerful force that cannot be ignored.

And investment demand is growing by leaps and bounds. The iShares Silver Trust (SLV) now has 2,404 metric tonnes of silver on its books – that’s close to 86 MILLION ounces, and way, way up from the 1.5 million ounces when the fund started on April 28. You can read the stats yourself by following this link: http://tinyurl.com/rw4sm.

If anything, I think CIBC may be underestimating the silver supply deficit for this year.

And a chart of silver shows we may be at a great buying opportunity …

Here’s a weekly chart of silver. Let me show you what I’m seeing …


1) There is support from price action earlier this year, when silver plateaued before its big move

2) A recent uptrend offers support close below current prices

3) The bottom indicator on the chart measures momentum. It shows silver is oversold and due for a bounce. If you bought silver when this momentum indicator was at the same level in August, you got a pretty good run.

Check out my new gold and energy blog at MoneyAndMarkets.com