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Silver Selloff

Silver is now down to 26.75…in my mind, a great buying spot.

Silver’s explosive move to close 2010 was basically from 18 to 31 – a 13 pt move (up 72.2%). If you experience a healthy 33% retracement of that move from 31 (down 4.29), you get to 26.71. Here we are – 1/3 of the way down the move, and also at a support level on the charts going back to Nov 2010. Physical buying – taking delivery of metal – only intensifies with large dips like this. The COMEX price is largely a paper game fought between physical buyers and paper sellers. In the end, the holders of physical metal will win.

Keep an eye on the 10 yr (3.41) and 30 yr (4.56) govt bonds…yields are holding the rally, ie bonds are still acting weak. And we all know the true cost of money these days is much higher than where govt yields reside. Food inflation is making mainstream news right now…the cost of printing money is going to soon dawn on the masses.

To see silver down over 13% to start the year is really a gift in my mind. Time to buy more cheap physical while it’s still possible.

Finally, read this headline out of Russia courtesy of the Russian paper Tass:

Central Bank plans to buy over 100 tons of gold every year
MOSCOW, January 24 (Itar-Tass) — The Central Bank of Russia plans to buy more than 100 tonnes of gold to renew the country’s gold and foreign exchange reserves (or international reserve assets) every year, CBR First Deputy Chairman Georgy Luntovsky told reporters on Monday, giving no details pertaining to the terms.

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