Thursday, March 02, 2006


Silver Muscles Past $10

The press is buzzing about silver. "Silver futures closed above $10 an ounce Thursday for the first time in more than two decades with traders upbeat about the prospects for a silver exchange-traded fund. At the same time, gold futures touched a one-month high above $570 an ounce to mark a third-straight session of gains, as concerns about global unrest lifted oil to a high above $63 a barrel, supporting investment in gold as a safe-haven asset."

"May silver climbed as high as $10.235 an ounce on the New York Mercantile Exchange. Futures prices haven't traded at levels this high since at least 1984. The contract closed up 41.8 cents, or 4.3%, at $10.208. 'I believe the proposed silver ETF can be the biggest thing for silver since the Hunt brothers,' said Peter Grandich, referring to the duo that tried to corner the silver market, and pushed silver to $50 an ounce around 1980."

"'Unless there's a sticking point, it could be approved in the next few weeks,' said Grandich."

"Meanwhile, gold futures closed above $570, trading closer to the record front-month contract high of $579.50 from Feb. 2 of this year. The April gold contract climbed to a high of $570.80 an ounce on the New York Mercantile Exchange before closing at $570.40, up $4.60. It hasn't traded at levels this high since Feb. 6."

"Overall, 'gold has worked its way out of the recent congestion zone and made a mini-break back towards higher values with each trading session since Monday,' said Jon Nadler, an analyst at bullion dealers"

"Adding to the likelihood of $600 in the next several months: the Bank of China reported that it will cut the spread on gold trading by up to 20%, said Emanuel Balarie, adding that this will run on a trial basis until May 27.
Given that, he expects an 'influx of gold buying to enter the market and more importantly, 'this reaffirms the fact that China realizes the value of gold ownership -- both for its central banks and its citizens,' he said."

"Elsewhere in the metals sector, the June palladium contract rose $3.05 an ounce to end at $303 and April platinum rose $3 to end at $1,054.80 an ounce."

"Shares of Coeur d'Alene Mines Corp., the biggest U.S. silver producer, have risen about 51 percent in the past year. The Coeur d'Alene, Idaho-based mining company rose 28 cents, or 4.9 percent, to $5.98 at 2:18 p.m. in New York."

Reuters had this, "Mexican miners taking part in a nationwide wildcat strike showed the first signs of wavering on Thursday, with workers at the world's largest silver mine ending their stoppage. But other major Mexican mines, refineries and steel mills stayed shut on Thursday as workers held firm in support of their beleaguered union leader. Mexico's mining industry has been in turmoil since an explosion at a coal mine owned by Grupo Mexico in northern Mexico killed 65 men last week."

"Silver surged to a 22-year high, breaking through the $10 per ounce barrier in New York. In London, where the precious metal was also at record highs, the rally was linked to rising copper prices triggered by the strikes and technical buying, dealers said."

From Forbes, "The ECB raised the minimum bid rate at its main refinancing operations to 2.50 pct from 2.25 pct. The decision was fully expected by financial markets after ECB president Jean-Claude Trichet signalled that such a move was likely and following a raft of strong economic indicators."

"Trichet said the ECB council also considered the possibility of raising rates by 50 basis points or of keeping them unchanged today, but its decision to hike rates by 25 basis points was unanimous."

Looks like the US$ rally took a hit on the ECB decision. The precious metals really needed to break out, technically, because news doesn't get much more bullish than this. Congrats longs!
Thanks Ben. SLW went from prev close 8.39 to 9.39 after hours (almost +12%). An amazing day.

Crude oil surpassed $63, but my energies had mixed results.
I've been long for so many years I don't know how to be short. I'm do hope many of the shorts are caught with their pants down this go around, it's about time to flush the toilet!!
I'm very tempted with holding calls and writing puts. Risky, but so tempting!
Buy and hold, buy and hold...
Rise in Silver Ignored... Good, I hope we can stay out of the spot light as long as possible!
Harry Browne Passes away...
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