Silver Year End Sales

It is end of the year now and it seems like there is a Silver Year End Sales in silver market. In early December 2011, 1 oz of silver price has been dropping from USD 32 – USD 33 to USD 26 – USD 27 in late December 2011. Hey! Silver in Malaysia has a Silver Year End Sales too!

I have been buying silver from USD 38 / oz down to USD 31 / oz. Although I have not been long enough to invest silver in Malaysia, I did witness silver price felt to USD 26 in late September 2011 but unfortunately that was the first time I saw silver price dropped to such low level therefore I didn’t know how to act upon the low price at that time. I didn’t even know there was such a thing known as resistant level which USD 26 was a strong one. Few days back, I saw the similar pattern was happening again. Silver price has been falling and soon it would reach USD 26 again.

In early December 2011, I have already bought 15 pieces of 1oz Maple Leaf 2007 at RM128 each. In mid-late December 2011, I bought another 4 pieces of 1oz Morgan bar for RM104 each. When silver price hit USD 26, I told myself that I must buy some more! As it turn out, I bought another 10 oz of 1oz American Buffalo 2011 at RM100 each. (Update: 2 days after that, there is a bulk purchase selling American Silver Eagle 2011 for RM 105 each, again I bought another 20oz. Due to the low price factor, I bought almost 50oz in a month.)

These 4 purchases in a month made me started to think something even deeper regarding the price fall. Mike Maloney has a video in Youtube sharing that “treat every price pull back as a gift”. I’m a loyal student of his because I found his teaching make a lot of sense, easy to comprehend and very genuine. Therefore I buy at every major price pull back.

When silver price drop, how can we (buyer) benefit the most out of the it? Ideally we could always argue that we should practice dollar cost average and buy consistently regardless what price it is. Theoretically it sounds good, but in reality human is very emotional, I seriously doubt how many people can follow this for a long term. Therefore I could think of 2 more ‘realistic’ approaches to benefit the most out of a silver price drop.

  1. We wait until the resistant point, if price started to bounce back, we buy immediately.
    1. The pro for this is the buyer is protected from the price continue dropping.
    2. The con for this is the buyer will never buy at the lowest point of the price.
  2. We buy at every major resistant level.
    1. The pro for this is the buyer very likely buy at the possible lowest price.
    2. The con for this is buyer might face a situation when he has bought it and the price still keep dropping.

So which approach do you prefer? If you have more innovative approach, do share with me in the comment section. Hope you have enjoy reading Silver Year End SalesSilver in Malaysia look forward to hear your comment on this post!

4 thoughts on “Silver Year End Sales

  1. If you always have the bullets to shoot, then practice approach number two.
    If bullets are limited and very small, approach number one would be a more suitable one.
    To average out the price, talk is easy but not easy to practice as one’s situation is different from another. You gotta have consistent bullets to come in periodically in order to do cost averaging.
    For my case, I practice approach number two although bullets are limited and small. Try buy some coins or bars that are not heavily affected by silver price. Once there is a price dip, you can sell off those coins/bars to get cheap silver at that spot price.

  2. From a Gold and Silver dealer I know in Singapore, he practice approach no 2, buy on every dip. but actually the best way is still dollar cost averaging, you cannot always rely on the technical analysis.

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