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Silver: Is the Correction Finally Over?

So Monday morning 7/13, silver was again down, trading at $12.50.  I just laughed to myself – Jesus, when does it end?  Isn’t a 23% drop since the intraday highs of $16.20 on June 2nd enough?  Sure enough, silver turned around Monday to close above $12.80, and is currently trading at $12.95 as I type this on Tues 7/14 at 7:30pm Pacific time (I’m in Los Angeles).  Looking at a 2 year chart, we see that the $12 level looks like solid support.  If that doesn’t hold…I’d be shocked.

Personally, I bought some more early last week when the price was $13.11.  I find these prices to be quite attractive in light of the fundamentals, especially including continued record govt deficits that necessitate more borrowing, and declining mine production.  I recommend APMEX if you want to buy online – very low premiums to the spot price, and delivery took less than a week.

Lastly, I forgot to mention the Silver:Gold Ratio – it’s jumped from 61 in early June to over 70 during this silver selloff.  Anytime it gets to 70, I’d expect silver to outperform gold and push back to 65 or below…and of course, long term, I expect it to shrink far more than that.

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