My name is Ed Steer. For the past 10 years, I've spent my days and my nights deeply immersed in the world gold and silver markets, and report about them in my newsletter, Ed Steer's Gold & Silver Daily, for Casey Research.
There's a lot going on in the silver market right now, and because of a number of factors I explain in this report, I believe that silver is due for a major price breakout and soon.
Right now I'm seeing a strong case developing for silver's price to triple taking the spot price from just above $20 to over $60... or even higher. Multiple markets are all pushing upward on silver's price. As I'll share below, there are two big reasons why that push could get a lot harder.
And if we look at history, we see this can happen fast. Case in point, when silver's price spiked in late 1979 and early 1980, it took only 5 months for silver to move from $6 to $48 (that's a move from $18 to $144 in today's dollars).
Not only that there's reason to believe silver's price spike may be triggered soon. Through my work with GATA and in my daily newsletter, I address stories of short-selling and techniques edging on market manipulation by the major bullion banks. Well, if you read below, you'll discover the new policy out of the CFTC that's about to make it a lot harder to profit from short-selling silver and why this may trigger a silver price frenzy similar to the 1979-1980 silver spike.
And finally, I'll share with you who I'm turning to for the best strategy to put your investment dollars to work to take advantage of a big rally in silver.
This metals industry expert is who I go to for my silver and gold investment strategy because he and his team always deliver well-researched recommendations to help me grow and guard my wealth.
One of this expert's current silver stock picks has beaten silver's gains by 5.5X since the November 2008 low. This means if you'd put $5,000 into physical silver at the November '08 low, you'd be sitting on $9,203 worth of silver today. But $5,000 in this stock, and you'd have $28,116 today. (That's $18,913 more for every $5,000 invested.) Learn below why he thinks this is only the beginning and how to get in on the next move.
But I don't want to get ahead of myself. So let's take a look at where we're at now, and answer the question: "What's going on in the market that supports a case for a big move up in silver?"
Two Reasons Why Silver May Rise Steeply
$60 silver roughly triple today's price is a bold prediction, I know. Yet when I look at two important factors, I tend to see it as a fairly conservative and well-founded estimate.
First is what we can call "the supply-demand tight-rope act." And second is the Fed's pro-inflation "quantitative easing" policy. Let's look at each and why together they support a strong case for a steep increase in silver's price. (To be triggered by another factor which I'll also share below.)
The Supply-Demand Tight-Rope Act
It's well-known that silver demand is outpacing new supply. But by how much (and what that means) may be a bit surprising.
For one, mining can't keep up with silver demand. Last year's mine production was at 709.9 million ounces while demand (actual silver use) was 889 million ounces. That gap had to be filled from somewhere, and last year it was covered by sales of government stockpiles and old silver scrap.
But the stockpiles are running out. In 2005 we were worried because silver's above-ground government stockpiles had hit the low mark of 700 million ounces. That was just five years ago... Now it's a lot worse. Last year, net worldwide stocks of silver decreased by another 86% year over year to 20.2 million ounces. That's only enough in the stockpiles to meet eight days' total silver demand.
Nobody's selling scrap either. Silver scrap sales have dropped for three consecutive years and have hit a 13-year low. As the stockpiles disappear, there's no reason to believe scrap sales will fill the gap they leave.
And here's the kicker. We're seeing more and more days where there are buyers who've already bought and paid for physical delivery of silver yet the seller has none to give them. Decide for yourself, but what that could mean is that the supply is so low that some days it's actually impossible to fill orders.
Without stockpiles and scrap sales to keep up with demand, the only way to stay balanced on the supply-demand tight-rope is to reduce demand.
And you know what that means: a fast increase in silver prices.
But where's the excess silver demand coming from?
Investors, for one, are driving demand for silver. Silver's long been known as "poor man's gold" a way to invest in precious metals without the high cost per ounce gold brings. Well, more and more investors are being turned on to silver for this very reason and the investment market for silver is growing at a rapid rate. Net investment demand for silver is up 622% since just 2007:
And this is pure bullion demand it doesn't even include the demand for coins and collectible medallions.
And it's investment demand that pushes silver prices up fastest. Compare it to gold or other commodities, and silver's market is relatively small. That means just a little interest goes a long way to shifting the market... Especially when supplies are short.
The imbalance is getting worse, too. Investors have been compounding the "supply-demand tight-rope act" by flooding into silver in the past couple years. In the early 2000s, when silver prices hovered around $5 an ounce, investors hardly paid attention.
Fast forward to the last couple years, and investors who understood silver's market conditions enjoyed serious gains as the price spiked to over $20. Of course, in a choppy market, what goes up also must come down, and silver fell below $10 within months so only those investors with a good exit strategy or industry expert on their side kept the lion's share of their gains.
(That's why even with my finger on the pulse of the market I'm always turning to the industry expert I'll introduce you to below to help me get in and out for maximum gains on the market's big moves.)
When these spikes happen, investors flood into and out of the silver market with irrational exuberance and because the market's so small, silver's price swings big. And market signals are saying in the coming months we may see a rush into silver like we haven't seen in a long time.
The new silver hoarders are driving demand in a big way, too. Who are these "new silver hoarders?" In short, ETFs. In the last few years, a number of different exchange-traded funds have come on the scene to help investors play silver's market moves inside tax-sheltered retirement accounts, with more liquidity, and without the extra effort of physically handling the stuff.
Well, some of the most attractive silver ETFs earned their reputations (and grew so much) because they actually take physical delivery of one ounce of silver for every share they sell.
With the silver market heating up, these ETFs have started hoarding ever-bigger silver stockpiles to support demand for their shares adding demand pressure to the silver market and taking significant supply off the market indefinitely. For one, iShares Silver Trust (SLV) has increased its stocks from 20 million ounces on its start date of May 1, 2006, to over 300 million ounces today.
(Chart of SLV's holdings and share price since inception, from my friend Nick Laird over at sharelynx.com.)
Dear reader, you don't have to be a brain surgeon to see what this is doing to the market. It's only a matter of time before all this action sends silver prices on a big swing to the upside.
Yet investment demand is just a slice of the overall silver market.
What's also driving core demand, depleting stockpiles, and supporting silver's increasing prices are all of silver's "other" uses we investors often forget about.
Industry, for one, accounts for around 40% of annual silver use. What drives high industrial demand are silver's conductive, reflective, and anti-bacterial qualities that make it useful in batteries, bearings, brazing and soldering, catalysts, various electronics, medical applications, mirrors and reflective coatings, and more. Even the green energy and environmentalist folks are demanding silver and putting it to use in solar cells and water purifiers.
And this is important to note unlike investing where silver is bought and held, most of these industrial applications "use up" silver and take it off the market for good.
And industry will keep buying even when the price spikes. Because the amount of silver used in each application is so small and there's no reasonable substitute for silver in many cases industrial consumers will pay $20, $60, $100, or more per ounce, without any significant reduction in demand. They just absorb the increased cost or pass it on to consumers.
Plus, there are a number of smaller "consumer" markets for silver that are driving demand, eating up stockpiles, and laying claim to new production as it comes out of the ground.
And even silver producers are betting on the price going up a small 2.5% of silver demand last year was silver producers de-hedging (getting out of fixed-price contracts) so they can take advantage of increased prices of silver.
And every single one of these markets is drawing down on the total supply of silver and snatching up pretty much every ounce that comes out of the ground.
But that's not all...
How "Quantitative Easing" Is Also Pushing Silver Up
Like gold, silver's price is pushed up quickly when inflation rears its ugly head. And it doesn't have to be current inflation either. If investors so much as expect inflation (like when Bernanke and the Fed announce new "quantitative easing" policies), they flee equities, bonds, and other dollar-based investments to put their money in hard assets like silver.
And investors are finding plenty of reasons to expect inflation today:
In fact and you may agree with me I believe many of these pro-inflation policies have been a large factor in silver's strong push up since November 2008. With the state of today's economy, government debt, and a culture of fiscal irresponsibility, investors are scared what their dollar will be worth in 5 years... 1 year... even 6 months...
So smart investors are using silver as a hedge to protect their wealth against double-digit inflation like we saw in the 1970s and 80s, or the even-worse currency crisis that could hit should inflation get completely out of control.
Sure, they're using gold, other commodities, and even other currencies too yet silver seems to be getting extra attention because of all the other factors I've described in this report that give you a chance to not only beat inflation, but also profit handily while you do.
Yet among all these factors, you may wonder why NOW is the time to make your big move into silver rather than waiting 3 months, 6 months, a year, or more for further developments.
The Straw That Breaks the Camel's Back (and Sends Silver Skyrocketing)
Here's where things get very interesting.
I mentioned above that silver's price spike could happen anytime soon. And there's good reasons why.
First, remember that silver's market is relatively small much smaller than gold and oil and swings easily. A small handful of players can make the market move quickly speculative capital has always been able to drive big price swings in silver. Just recently we've seen swings giving gains of 53.8% and 22.9%, and drops of 21.9% and 19.6% all within a period of months and even weeks. And on a day-to-day basis it's not unusual to see spikes and troughs when "Da Boyz" (the big bullion banks) in London and New York start throwing their money around.
Second, it's important to understand how the market is being moved during these price swings. It's all about Da Boyz the bullion banks, led by JPMorgan Chase selling shorts and profiting from price drops.
My friend, silver market analyst Ted Butler, described it best in a recent commentary...
"The commercial traders band together and pretend to sell massive numbers of contracts (emphasis on pretend) on the electronic market. This starts the price snowball rolling down the hill and below the key moving averages, at which point the technical funds started selling on a programmed basis, as they always do. Knowing how and when the technical will sell, the commercials then, in a predetermined and cohesive manner, withhold the bids on thousands of silver contracts they want to buy from the tech funds, so they can cover their own short positions. The commercials set their collective bid at much lower prices than they would have normally, in order to maximize their net collective buy points."
Decide for yourself, but this looks like market manipulation in spades to me. Ted goes on to call it like he sees it...
"The tech funds arent hedgers by definition and, in fact, neither are the commercials. This is what I mean when I say that this big paper futures trading is setting the price of silver, not discovering it. This is a violation of basic commodity law. Our futures markets exist to allow risk transfer by real producers and [real] consumers. This COMEX tech fund/commercial paper trading scheme has absolutely nothing to do with hedging silver production or consumption. It is purely an illegitimate private gambling racket that is setting the price of silver for all the real producers and consumers in the world. Id like to see someone describe it differently."
And from my next point, it seems the folks in Washington are starting to agree with Ted...
Third, understand that the CFTC is shutting down the "mechanism" used to profit big from driving the silver price down. Whether or not it's market manipulation that we've been seeing in the silver market, things are about to change and change big.
The Dodd-Frank Act the financial reform that was signed into law earlier this year contained one important provision that should help us independent investors by putting an end to these practices that stink of market manipulation. You see, the reform package requires the U.S. Commodities Futures Trading Commission (CFTC) to establish reasonable position limits on trading futures of silver and other commodities. Something Ted (and I) have been in favor of for years.
He's been watching the silver market like a hawk for more than 20 years, and now more than ever, he's quick to tell you Da Boyz have gotten completely out of hand with their short positions. Take the graph below, which he and Nick Laird at sharelynx.com put together. It shows how many days of production it would take to cover the short positions of the four largest traders (the "4 or less" are in red) and eight largest traders (the "8 or less" are in green) in a number of commodities markets. In gold and silver, the "4 or less" and "8 or less" traders are almost certainly the bullion banks. Notice how silver especially, and also gold, stands out.
Here's the chart:
What does this mean? It would take a full half-year of dedicated silver production to cover these short positions. You only get positions like this when there's significant illegitimate activity going on not when normal producers and consumers trade based on supply and demand. There's no way these short positions represent a legitimate hedge against future price fluctuation and that's why the CFTC has been ordered to shut this down.
The CFTC limits have not been put into effect yet theyve been in bureaucratic lag for a couple months now. But as soon as they are announced, they'll essentially take away the mechanism Da Boyz have been using to profit from silver's downside swings. As for a timeline for this announcement, we could be talking days or just a few weeks. But whatever the timeline is, it will be sooner than you expect and come out of the blue.
And that's the straw that'll break the camel's back and send the silver price skyward.
Because the best way left to make significant profits in the silver market will be to bet on the price going UP.
And it appears Da Boyz have gotten the message. JPMorgan the leader of the pack has notified the traders on its prop trading desk (the ones who "play" in the silver futures market) that their jobs are in jeopardy a good sign they're shutting the doors on the operation before the whole house crumbles.
With JPMorgan leading the charge, the sticky fingers that have been holding silver's price down will start to pull out of the market. The pressures pushing the price up will be unleashed. And we'll likely see a mania pushing silver's price up well into triple-digit gains (on top of the gains since the November 2008 low).
We only have to look back to 1979-1980 to the last time the CFTC took a serious look at short-selling and manipulation in the silver market to see what scenario is likely to play out. In just a few months, from late 1979 into early 1980, silver shot from $6 to $48 that would be from $18 to $144 in today's dollars.
With similar factors in play today, it wouldn't surprise me to see as much as half that action in silver's price more than triple today's price on silver once Da Boyz are out of the way and a mania has ensued. And if it goes higher (perhaps matching or exceeding the 8X gains in just a few months from 1979-1980), that wouldn't surprise me much either.
Looking at silver's volatile price history and all the factors discussed above, triple today's silver price in as little as five months is a conservative and well-founded estimate.
That's why I'm calling for a major jump in silver's price possibly even above $60. And why I think you should go "all in" now because the hammer is poised to fall and we could see this spike start in no time flat.
Your Best Way to Profit from $60 Silver
In my Gold & Silver Daily email newsletter, you can rely on me to keep my eyes on the gold and silver markets, to identify patterns that may predict big price swings, and share news that affects your wealth and freedom.
Yet to show you how to safely and profitably play triple silver, I pass the baton to my friend and metals industry expert Jeff Clark, editor of Casey Research's BIG GOLD newsletter.
I mentioned above that one of Jeff's current recommendations has beat silver's gains by 5.5X since the November 2008 low turning every $5,000 invested into $28,116.
And if we see silver triple soon (or even just continue its bullish gains), there's every reason to believe this is just the beginning. This stock is in a good position to outpace silver on every increase.
Of course, I can't give you any guarantees; however, all the evidence below suggests this stock will slingshot up on a silver price increase... And you'll want to get in before this happens.
Of course, Jeff's not so single-minded as to tell you to put all your chips on one company he has a safe-yet-leveraged approach to playing the volatility in the silver market (so you can take big gains while protecting your wealth). And I think you're going to want to follow Jeff's lead on this...
But before I get too deep into how to play silver's coming price spike, I'd like to give Jeff and his publication, BIG GOLD a more formal introduction.
Who Is Jeff Clark and Why Should You Listen to Him About Precious Metals Investing?
Jeff has been the editor of BIG GOLD for about three years now though he's no rookie to the precious metals industry. In fact, he's been in the industry for most of his life:
From a young age, Jeff Clark worked on his family's gold claims in Arizona, Nevada, and California. Ask him and he'll tell you, he's done it all: digging, sluicing, dry washing, panning.
After years working in the field on mineral claims, he now tracks the market forces behind them. He has an in-the-trenches understanding of the precious metals industry no Harvard or M.I.T. grad will ever have he knows the metals, the industry, and the market from the inside out.
More importantly, he knows how to use this metals industry "insider" understanding to ferret out opportunities others don't see.
And while he's been bullish on silver for years, he agrees that there's something big going on in the silver market right now. (You probably won't find Jeff claiming market manipulation unless cell doors start slamming, yet all the other factors pushing silver's price skyward have him very interested.)
Jeff is a disciplined investor. His recommendations are always based on well-researched facts and never pure speculative plays. He'll only give you a recommendation if it's rooted in true value and sound investment principles. So follow Jeff and your wealth is guarded while you're able to take advantage of market moves like the spike I see coming in the silver market to grow your portfolio.
Your 3-Part Plan for Playing a Big Move Up in Silver
Jeff and his crack team at Casey Research have a three-part plan to help you play a quick run up in silver giving you leveraged exposure to silver for the biggest upside, while managing risk and protecting your wealth.
In fact, they've put together a special report for you, aptly titled, "Your 3-Part Plan for Playing a Move to $60 Silver," which I'll show you how to get below.
Though first in order to better understand the plan you'll want to understand Jeff's "keep it simple" approach to investing in gold and silver, plus other precious metals and natural resources.
In BIG GOLD, Jeff won't recommend you start playing the high-risk fields of options, futures contracts, or "junior" mining companies that have yet to prove they can pull a single profitable ounce of metal from the ground.
Instead BIG GOLD shows you all the best ways to participate in today's precious metals price moves while carefully managing the risks.
Jeff and his team show you:
This is the foundation behind Jeff's three-part recommendation to position yourself for a coming silver price spike. Now let's look at your three-part plan.
PART 1: Position Yourself for Big Gains
The first part of the special report, "Your 3-Part Plan for Playing a Move to $60 Silver," is all about where to invest that portion of your capital you hope will earn the strongest gains.
Let me tell you a bit about Jeff's recommendation that he thinks is set to gain most from silver's big move up. You already know that it's outpaced silver by 5.5X since the November 2008 low. Yet that's just part of the story.
Also, this company is on or ahead of schedule on pretty much every project, plus is actively acquiring new rights on promising and proven silver properties.
And here's the best part. This company doesn't have to touch a single piece of mining equipment. They don't mine silver. They purchase the right, for a low or fixed payment, to buy silver production from a miner and later sell it at market prices. So silver's price climbs, this company's costs stay static, and the bottom line gets fatter.
This stock has been on a tear recently. From its February low this year, it's gained a solid 66%. But don't worry if you missed those profits because there's plenty of upside still to come particularly when we see silver's price take off.
Though there is a caveat. This stock has been in "buy" mode a few times this year, yet it's headed into overbought territory right now. We're expecting a short-term correction. So Jeff has a current entry target for you that will let you get in on a pullback, which he'll be keeping updated based on silver's broader market conditions. So you can get in when the time is right and ride it for the best upside.
The full recommendation including where to place your buy order is included in the special report, "Your 3-Part Plan for Playing a Move to $60 Silver."
And as I said, Jeff and his team are watching the market closely. A silver price spike could lead to a "buy" recommendation in a heartbeat even at a price higher than today's. And if you respond per my instructions below, Jeff and his team will be sure to update you as soon as this stock is a go.
PART 2: Get Physical
No precious metals strategy is complete without actually putting a good chunk of your holdings into bullion. The BIG GOLD strategy is no different keep 1/3 of your investible assets in physical metals.
This gives you a powerful hedge against inflation, a devalued dollar, and a down market. Precious metals hold their purchasing power against currency fluctuations, and should be a significant part of your long-term strategy of maintaining wealth. They're REAL money take a gold or silver bar anywhere from Tennessee to Timbuktu, and you'll readily be able to exchange it for cash or goods.
And if you're stocking up for a move to the upside, physical silver needs to be an integral part of your strategy.
Though not all bullion dealers are equal. In fact, there are only four silver dealers in the world that have been vetted by the Casey Research team to actually give you a reasonable price on silver. (Most others make a fortune off you on margins and fees putting you that much further behind for every ounce you purchase.)
In the special report, "Your 3-Part Plan for Playing a Move to $60 Silver," you'll get the short list of the four silver dealers the Casey Research team has found who provide consistently good service and great prices on silver.
Not only that, you'll also learn the 10 types of physical silver you can buy and which are your best options for guarding and growing your wealth.
PART 3: Cover Your Bases
Jeff and his team have one more recommendation for you, and it's a core part of maintaining and building your wealth in the precious metals and natural resources market.
The recommendation? Diversify.
Diversify across other silver, gold, and related investments because this opens you up to many sources of gain on every move up in silver's price and because it protects you from the downside risk of putting all your eggs in one basket.These are the specific "cover your bases" recommendations you'll get in "Your 3-Part Plan for Playing a Move to $60 Silver" special report:
So How Do You Get the Special Report?
Dear reader, let's get down to business. I consider Jeff's special report "Your 3-Part Plan for Playing a Move To $60 Silver" a must-read, and now, before silver's price spike starts to take off more than it has.
I also turn to Jeff and his newsletter BIG GOLD as my analysis of choice on where to invest in the precious metals markets. (I read it as soon as it hits my inbox every month.)
It's not just silver's coming price spike that gives you opportunities to profit here the resources and metals markets give investors chances to take gains on a regular basis. And Jeff and his team stay on top of these opportunities, with on-time and on-target commentary and recommendations for how to play the markets' moves to protect your assets while realizing significant gains.
And Jeff and his team have put together a special offer for you.
When I asked him how you could get the "Your 3-Part Plan for Playing a Move to $60 Silver" special report, he said you can have it for free.
Here's how you can get the report free: Just try the BIG GOLD newsletter for the next 90 days.
BIG GOLD gives you monthly commentary on the gold, silver, metals, and resources market, plus portfolio updates and urgent opportunity announcements for 12 months, all delivered by email and through the CaseyResearch.com website. Plus, you get access to all back-issues and special members-only reports.
Retail price for a full years subscription to BIG GOLD is $129 though when you try it today, you're locking in a price of just $79.
All you have to do today is agree to try it out for 90 days put down the $79 investment, then prove for yourself the value of BIG GOLD and you can get the "$60 Silver" report free.
Jeff and the entire Casey Research team stand behind the value of BIG GOLD. But they want you to prove it for yourself. If for any reason BIG GOLD doesn't live up to your expectations, simply give the customer service team a call at 1-888-512-2739 (1-602-445-2736 for international callers) within the first 90 days that's three full months and you'll receive a prompt and courteous refund of every penny you paid. Your satisfaction is 100% guaranteed.
And just for trying BIG GOLD at no risk for the next 90 days, you get to keep Jeff's special report "Your 3-Part Plan for Playing a Move to $60 Silver" absolutely free.
Let me put it this way. For the cost of a few ounces of silver, you can learn exactly how to play the coming silver price spike to collect maximum gains. The upside potential of going "all in" now and riding this to the top could give a tremendous boost to your portfolio.
And not only that, you'll also get 12 full months of commentary and specific recommendations on the gold, silver, metals, and natural resources markets. (Including and this is equally important when to get out with your gains on the other side of a silver price spike.)
You're doing it at no risk, too. Because of the 90-day guarantee, you can put your $79 down today, give it a try, and decide then if it was the right investment. If not, you can cancel within 90 days for a full refund and you'll still get to keep the special report.
Here's Your Next Step to Get the "$60 Silver" Report, Risk Free
It's easy to order. Simply click the big link below, or call the Casey Research customer service team toll free at 1-888-512-2739 (1-602-445-2736 for international callers). Let them know you'd like BIG GOLD with the "$60 Silver" report, and they'll take it from there.
I know I'm "all in" and holding on to my britches for a big move up in silver prices. Will you join me?
See you soon.
P.S. I just wanted to take one more opportunity to stress the urgency of this. When I'm talking about a big move up in silver, I'm not talking about 5 years from now, or even next year. With the new CFTC position limits and all the upward pressure on price (combined with a technical breakout plus more silver market news breaking daily), this spike is set to happen soon.
It's not a wait-and-see situation to go "all in." So go ahead now and take Jeff and his team up on their offer. Try BIG GOLD risk-free for the next 90 days, and grab your FREE copy of the special report "Your 3-Part Plan for Playing a Move to $60 Silver." It's just $79 to join, which you'll make back on just a couple ounces of silver when the price moves like I expect.
Call the customer service team at 1-888-512-2739 (1-602-445-2736 for international callers). Let them know you'd like BIG GOLD with the "$60 Silver" report, and they'll get you all set up. Or just click this link: