November 2, 2012 - Any News To Explain Pm Drop?

Well, the ol Canary-hawk has been buyin silver lately Barry, via 100 oz. in last couple of weeks.....

I notice every time pms start down, they catch support after a 100 dollar and three dollar fall (or 1700 gold and 32 per oz silver), then it starts on back down before turning back north....

I still think we are looking at sub 30's for a while, but not as far down as last year perhaps, say 28 per oz. silver and 1625 gold, but just a hunch, nothing more....

I think that support for gold is at $1680 and $31 for silver. I suspect the powers that be are trying to make the price of gold more affordable for the physical buyers in India and China; to shore up long term price goals. Right now the physicals suck. They try to spin it but year for year buying in India is way down and buying in this country is down.

Secondly I don't see this as a real retreat by silver, though I would love to be wrong. It was range bound at $31.60 to $32.20 for awhile. In other words it had a 60 cent range and we are 'only' 60 cents below the bottom limit. How many times have we seen silver go up one dollar or more, in price, in a single day? Lots of times. In fact so much that it is almost a "norm". In my opinion, for silver to make a solid break lower it needs to close below $30.80.

Lastly I had something I thought was interesting happen yesterday. I had an old customer come into the office and offer a single silver eagle for sale. Now, I am out of the bullion game for the moment, but; this was a regular of mine and he needed a helping hand. I paid spot for the Eagle and you should have seen his face light up. Why? Because apparently, and I verified this, the other dealers in town were only offering $28 for an Eagle.

That may be nothing new to most of you. But around here an Eagle has had a premium since this whole thing started. In fact there was a short time we were all paying a bit above spot, the demand was so high. We have all been paying spot now for the last year, and selling at spot plus $2. What the other dealers are now telling me is that they are buying Eagles at $26 to $28 and selling at around spot, but no less than $32.

With the price break today I contacted my regulars and they all told me that they are waiting till after the election to buy. The thinking is that a Conservative in office will depress prices. As the stated intent of that Candidate is to oppose QE.

Also a lot of the smart money sees the employment figures to go up more than anticipated. The thought is that not only will there be seasonal help, campaign workers (for this month) but that also the trades (Carpenters, Electricians,Plumbers, and Utility Workers) will also delay their season down time to make repairs because of Hurricane Sandy. They will also probably hire Helpers and Laborers. Higher employment figures have recently put pressure on PMs.

Economic uncertainty pre-election also factors into the slight dip. I think a lot of investors are standing pat until after the election before they decide to buy or sell.

I think some of this is folks needing cash so the PM's have to go,at least temporarily. I also think the amount of the damage done by Sandy has people rushing to a deflationary safe haven,ie,cash. My prediction is a sharp turnaround next week.

I'm gonna go to the shop tomorrow and stack some silver bullion with a dash of gold.

I agree with some of the things that have been mentioned. There were more jobs created than expected, but unemployment rose so thats a negative.

But people probably are getting to the point they need liquid money, the hurricane eliminated a lot of the eastern seaboard from even considering buying making the market demand much smaller, the USDX rose to the highest level since early september today, the disaster could have also made people see the need to have more emergency money that can be accessed right away as opposed to money stored in PMS. Really theres a lot of factors in play here at the moment and impossible to say which ones are having the biggest effect

Hey -- you're stealing my schtick! Seriously, though, it's nice to know I'm not the only one this keeps happening to. Remember the huge drop earlier in the year from the mid $30s down to $27? Guess who bought a couple of monster boxes of silver right before that happened...

Anyway, just talked to the wife and she agreed that making a [relatively] small purchase now wouldn't hurt. I was thinking of buying another monster box if silver dropped below $30, but for now I went with a 100-ounce J&M bar from goldmart.com (only $0.59 per pounce over spot). If prices keep going down next week, I'll buy some more. If not, at least I got something.