Why I Think Silver Price Will Move Up Soon

Silver price has been bearish (dropping) for more than 2 months since late February 2012. I have posted several post before this that suggest silver price might move up before this such as:

  1. Flag Pattern
  2. Head and Shoulders
  3. Silver Price 1970

and few others…

The fact is I didn’t know for sure. If last Friday, silver price has fallen $26 support, very bad thing could happen to silver price as it could drop to support as low as $17 or $18 to find the next strong support. Some investors wish for it to drop to that low so that they can buy more. For short term, it’s true that the investors might be able to buy cheaper; but as for long term view, it is not a good sign as it could take a very very long time before price climb back to $30 level. If price has dropped below $26 last Friday, anyone who went in market in the last 2 years would get burned – the only variation is, how severe.

Since price has re-bounced to $28, that would make all my previous forecast seems correct again. Today, I’m making another forecast as I spotted another similar pattern in 2007. As you can there are Point A to Point F, right after Point F, silver price shot up high

A similar pattern is detected in silver price now…

The similar Point A to Point F can be found in today silver price, if we are already in Point F (this is very likely because we survived support at $26), very soon silver price will re-bounce and rise drastically.

I’m in the process of writing my new eBook, the last version of the eBook was released in February and I only opened to limited amount of download (100 copies). Due to popular demand, I am planning to work on the 2nd Edition of the eBook. I’m updating the information and added a lot more good stuff into it. Stay tuned in my blog and you will see the update soon. Alternatively if you do not want to miss anything, please subscribe here so that I can update you from time to time about my progress.

Have a nice week ahead!

 

2 Months Cycle

Few days back in my previous posting, I mentioned now is a good time to buy some silver. Today, I will show you another reason why you should buy silver now.

Looking at the following chart, there is a 2-months cycle happening in the trend. Since November 2011, market comes down for 2 months (until January), up for 2 months (until March), and down again for 2 months (until May). Right now, we are at the end of the last cycle which is start in March. If the trend continues, we can expect a change of direction in silver price.

Together with the head and shoulder pattern. now is a good time to buy some silver.

If you are interested to learn more about technical analysis and forecast the movement of price, please consider reading this book written by Ikram Adi where he explains one simple and effective formula to forecast silver price movement. Click here to download

Until next time, happy investing silver in Malaysia!

 

James Cameron Silver Investment

Have you heard of the name James Cameron? If no, it’s ok, I didn’t know him too until recently. He is the director for The Terminator (1984), Terminator 2: Judgment Day (1991), Titanic (1997), Avatar (2009) and a lot more movies.

I have learn something very useful from this successful man. This is what he said,

“Luck is not a factor, Hope is not a strategy, Fear is not an option.”

That is so true, especially true when come to silver investment.

Luck – when we invest in silver, we are not investing base on luck. In fact, no investment should be done base on luck. We are investing in silver because we understand the fundamental of silver investment. There is a physical shortage for silver, there is price manipulation on silver, gold silver ratio is way too high, silver is being consumed year after year. When we are investing in silver, getting lucky should not be part of the factor why we should invest in silver. Facts that we have been exposed to and learned are the reasons we want to take advantage of the situation through silver investment.

Hope – when we invest in silver, we don’t hope for the price to go down so that we can buy. We also don’t hope for the price would go up after we bought. We learn strategy and formula to identify when is a good time (good opportunity) to buy silver and when is a good time  to sell silver. If you are serious about silver investment, you should check out the book written by Ikram Adi where he shares his strategy and a special formula to forecast price movement in silver investment. Honestly speaking, I would invest in education anytime rather than hope for a good return. If you are interested to see his book, you can download here.

Feara person should not be fearful while investing in silver. Silver price is a very volatile. Within few days, price could drop as much as 30%. If an investor is a fearful investor, investing in silver would give him a heart attack. A person should only invest the amount of money that he can afford to lose. This is preparing for the worst. Fear is not an option. Once a person has done enough homework, he needs to trust himself that he has done his homework well and be fearless with his silver investment decision.

I sincerely hope you will do your homework well and prepare yourself for silver investment to practice what James Cameron said, “Luck is not a factor, Hope is not a strategy, Fear is not an option.” Until next time, enjoy your silver investment journey!

Silver Price Movement

Silver price has been very exciting in the past 12 months. If you look at the below chart, you can see that within a short period of time, silver price has shoot up to USD 49 and felt down to USD 27. If an investor unfortunately bought silver at USD 49, he would probably get a heart attack when silver price hit USD 27. That is 45% price drop!

What can you tell from the above chart? If you are like most people (including myself), this chart doesn’t seem very interesting. However, I met a new friend from Facebook and he has pointed out something very interesting from this chart and I have decided to share it here. Look, this is what he has shown me:

Silver price seems like consistently not able to break several major resistant levels. Resistance level is where the price tends to find resistance as it is going up. This means the price is more likely to “bounce” down this level rather than break through it.

By looking at the chart, it silver price is potentially not able to break the current resistance level like how it happen during May 2011 and Sept 2011. It seems the possibility of silver price going down is higher than the possibility of silver price going up. However, if silver price is able to break this resistance level, the price might shoot up significantly.

So what can you do with this information? Well, if you believe silver price is not going to break this resistance level, you should not buy any silver in the next few days and wait for silver price to significantly go down before buying. On the other hand, if you do not believe in this trend and believe silver price will break this resistance level, you should buy now before the price shoot higher.

Time will tell whether silver price will go up or go down. In the mean time, where do you think silver price is going?

eBook Silver Malaysia

Practical Guide for: Investing Silver in Malaysia

The first silver investment in Malaysia eBook has been published titled Practical Guide for: Investing Silver in Malaysia !

Please click on the Download button below. It will lead you to a very simple registration page. I will need your name and email address so that I can send it to you. If there is a newer edition of the book, I will notify you through the email you have provided.

Sorry, this eBook is taken down for information update. Please subscribe to my mailing list . I’ll inform you immediately when the book is open for download again.

Sorry, this eBook is taken down for information update. Please subscribe to my mailing list . I’ll inform you immediately when the book is open for download again.

“Read this ebook. You will learn how to purchase your first silver coin in Malaysia within the first few pages. Daniel had done a great job producing this practical guide!”,

– KCLau, author of Top Money Tips for Malaysians and Top 93 Personal Finance FAQs in Malaysia


Why Silver Price Is Not Rising

Silver In Malaysia – Why Silver Price is Not Rising?

Looking at the facts and numbers, Silver is destined to shine. There are so many articles and youtube video floating around the internet to prove that Silver is the greatest investment of the century. During Silver price boom in 1980, there were only the west was buying and caused the price to went up to almost USD50. Thanks to the hidden tax: inflation, can you roughly estimate how much is it worth USD50 in 20 years ago? For example, can you recall how much of goods RM50 can buy you in 20 years ago? and how much of RM does it take today to buy the same amount of goods today? Silver price will be MINIMUM USD 50 of 20 years ago value. The price of silver in Malaysia should proportionally adjusted according to international market.

Fast forward to today, not only the west, but also the east – and basically the whole are buying Silver, thanks the power of internet and TV news to spread knowledge very quickly and freely, the word is well informed about the facts, the numbers, the demand & supply for Silver. Logically speaking, the coming round of Silver price boom will definitely be higher than the last 1980 boom. How is it possible that a precious metal (and commodity) that has limited supply on earth being chased by an (almost) unlimited supply fiat currency will not spike up? Silver in Malaysia might not play a significant role in global market, but every oz of silver in Malaysia that being bought, it will reduce the global supply, even a little.

There is a lot lesser available Silver in proportion to demand – either above or below ground – than available gold.

Due to the industry consumption of Silver and low supply from mining, the situation will only get worse. The supply of Silver and gold gap will only get bigger. More gold, even lesser Silver. However the current gold to Silver price ratio suggests that we have almost 50 time more Silver than gold. It could be true in long time ago, but due to industry demand in the past decades, Silver consumption rate is far higher than the production. Economy basic, if supply is low, demand is high, price will go UP UP UP! There will be no exception for Malaysia, silver in Malaysia will naturally UP UP UP!

silver in malaysia

Silver Price in Malaysia using GoldPrice.org (USD) - which also indirectly represent price of silver in Malaysia

 

Unfortunately, the reality has slightly disappointed us Silver believer in recent May 2011 (30% drop) and Sept 2011 (35% drop). If Silver has been steadily increase like Gold did, I’m sure Silver price will be much higher. Today the general public has not yet gain confidence in Silver. You who are reading this is not considered general public. You know a lot more about silver in Malaysia comparing to the public. The public are the people whom have problem believing or even seeing Silver as a form of investment or at least a medium to keep the wealth. The best experience I have encountered is when I talk about silver in Malaysia, they would ask me why not gold instead. But whether like it or not, the big movement of anything will have to depend of the middle working class. The real spike of silver price will come when the public are rushing into the silver market.
Another factor (the main factor) that stop silver price from soaring is the artificial manipulation of silver price by the big boys. Not only the banks are interfering it, but the industry players are also coming in the suppress the silver price. Let’s not discuss about banks as I’m sure you can find a lot more better explanation about why it is banks disadvantage to allow precious metal price soar. I will talk about industry player manipulating the price instead.

Not long ago, I attended a Forex trading course. During the course we didn’t discuss much specifically about silver in Malaysia but we did talk about something more interesting. I learned that big industry players do manipulate their country currency for the benefit of their manufacturing / importing / exporting business advantage. Take Japan for example, for a giant manufacturer like Honda (and many other giant manufacturers), a slight change in Japanese currency would significant affect the cost of manufacturing and the profit gain from export. Similarly, for silver (as a form of commodity), industry player would also manipulate the price for their advantage. Take China as example, they make use of silver as raw material for solar panel, and they do use it in a very large scale. It would not cost little to suppress silver price – but imagine if it cost USD 1 million to suppress the silver price which will lead the manufacturer to buy the same amount of silver with USD 5 million; although it is unethical, it’s a no brainer for the business to spend USD 1 million rather than USD 5 million for the same amount of silver. In fact, just like any business, these big boys are not working solo and manipulating the price individually, they are working as team to strengthen each other. It would take a very big force to bring them down. Silver in Malaysia did not go through such manipulation but the price of silver in Malaysia is directly affected by the global market.

However, like a Chinese proverb says, “paper can never wrap fire”. I’m confident that silver price will one day revert to an honest price. You, will want to buy silver in Malaysia now rather than buying it when the price has reverted back to honest price.

Note: This post has little direct relevance to silver in Malaysia. It is a general discussion about silver in global market. Stay tune for more posts related to Silver in Malaysia.

Silver During Bad Time

A friend who has been in silver business has posted an interesting question on “what is going to happen to your silver during bad time?” Here is my response….

My opinion, during economy collapse, “3 cans of sardines and 5 loaf od bread for 1 oz of silver” will not happen. At that time, more likely people will be using barter system like, “hey, how about 3 cans of sardines for 5 loaf of bread”. Right now, people are too comfortable with currency (dollar, ringgit, etc) and totally forgot about the value of real money (gold and silver). If you try to Youtube about how ignorant people are about the value of gold and silver, you might find some videos really amusing. The point is, although central banks have been buying gold for inventory, the amount of gold and silver flowing in the end user market is too little to be used as “money”. Some people do keep a little precious metal but it won’t last long, the fact is, most people don’t. Right now, people are too comfortable with the idea of “currency”, almost all of us grow up and live in the “currency” mentality. gold and silver being used as real money again (like 2000 years ago) is very unlikely to happen. So, my friend is right, during bad time, it will be very hard to sell off your silver or even find anything useful to do with it.

People might ask, so why are we still buying silver? Let’s run a fact check list to ensure everyone really understand the potential of silver.

  1. Amount of Silver on earth, in 1950, there were 10 billion oz; in 1980 there were 3.5 billion; in 2010 oz there were approximately 500 – 700 million oz
  2. In 1980, Global Population was 2.5 Billion, Global GDP was USD10 Trillion. silver price peaked at ~USD50.
  3. In 2010, Global Population was 7 Billion, Global GDP was USD60 trillion. you work out how much silver price should be.
  4. Since 1980, Population has increased +176%, Global GDP has increased +500%, Above Ground Available Gold increased +600%, Above Ground Available Silver DECREASED -91%.
  5. Silver price right now is still below 1980 peek.
  6. In 1990 – 2000. 2 billion oz of silver is consumed. If you refer back to item no.1, for 2001 till 2010, it literary means there is no more silver! Of course, mining was and is still going on, but the production can never cope with the consumption.
  7. Everything will revert back to the mean, the more something overshoot, the more it will bounce from the mean in the opposite direction. The mean ratio for gold : silver is 1 : 15. At the point of writing this, it is 1 : 52. Conservatively, people believe it will overshoot back to 1 : 12. Some extreme thinker believes, silver will be more rare (and more expensive) than gold.

First I say silver will be useless during bad time, second I say silver is such a potential metal. So what am I trying to say?
There will be 2 period of time silver will shine.

First is during the period of PRIOR to world economy collapse. Let’s face it, historically every ~40 years there will be a new monetary system. The last monetary system changed was in 1971 (end of Bretton Woods system), and it came the new dollar system (that we have today). Let’s add 40 years to 1971….oh! It’s 2011! With the Eurozone crisis, US QE1, QE2, (who knows QE3…..QE999), China bubble, global inflation. Aren’t they the hints of a new monetary system is about to arrive? The fact that a new monetary system is almost for sure. It’s a matter of when.

How this new monetary system would affect the price of silver – is right before the new monetary system is introduced, where the current dollar system would have to go somehow out of control. During this period of time, (most likely is a global hyperinflation), where people have to buy a RM0.60 bread for RM6000 and a bottle of RM1.20 water for RM12000. At this point of time, your 1oz of silver will probably worth RM12,000,000. Don’t think it is impossible, Zimbabwe dollar is a perfect example. Your silver still buy the same amount of goods even during hyperinflation. You ringgit literary means nothing. People might rather use barter than carrying a bag of cash. This is the first period you really sees your silver shine.

Currently, our current monetary system (dollar) is backed by nothing. That’s why US can print as much as they want in QE1, QE2…. When the above out-of-control scenario happens, a new monetary system need to come into place to end all the misery. A new monetary will not be easy to adapt, for most people, it will be a very painful experience. Imagine a middle class worker who has worked hard all his life and saved RM1,500,000 and now he can only buy a bottle of water with it? The transition to a new monetary system will not be easy, everyone will have to go through certain amount of pain. However, the new monetary system would ideally backed by something. Throughout 5000 years of history, gold and silver have always been used to back a monetary system, it’s very likely that gold and silver will be again be used as the back-bone of the new monetary system. When all the central banks adopt to this new currency (which is backed by gold and silver), and you take out your silver, your silver will be the most precious thing a banker will see. For discussion sake, if the new monetary system is known as “Goreso” (I’m just making this up), people with pre-crisis cash would bring RM10,000 to to central banks to exchange for 1 Goreso; while you might be bringing 1 oz of silver to exchange with 120 Goreso where 1 Goreso can buy 1 bottle of clean water.

To summarize this, silver will shine under 2 circumstances:

  1. Prior to global economy collapse,
  2. A new monetary system is introduced.

For most people, the above scenario is really hard to imagine. We have live all our life with something we are so comfortable with which is the paper note currency.

I hope this post will serve as a first sign of warning you to get prepared for global financial crisis with precious metal.