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Gold/Mining/Energy : Gold Price Monitor

GDXJ 150.31

+2.0%

Jan 28 4:00 PM EST

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To: long-gone who wrote (80188)	12/25/2001 11:36:42 AM
From: ahhaha	Read Replies (2) of 116927

It is telling about the marginal supply of silver. Silver is not instantaneously available in synthetic quantity. Market demand for synthetic silver, silver associated with contracts and market settlement, is fairly strong, but fundamental demand isn't. Total demand and supply of silver are in equilibrium and both are flat as a function of time. The net of this configuration is that once the marginal effects caused by synthetic conditions are neutralized, price will revert back to the fundamental equilibrium level. The long term silver chart suggests this level is instantaneously $4.40, and over the next year, $5.00. Whenever a market is dominated by marginal forces price volatility is high. Currently the market has a head of steam. The above mentioned forces and associated measures like lease rates should bring the price at least up to $4.70 and then above the median long term equilibrium of $5.00 where it should then correct back down to something like $4.40 before heading up and swinging wildly for some time around $5.00, again all due to marginal forces and their attendant volatility. The dominance by marginal forces and lack of clarity is expressed in the ambiguity seen in lease rates. This is a trader's game sine qua non. Maybe the current move is half done. Do you get aboard now? Not in my book on a trading basis. I don't need to catch all the girls. Maybe the current move is mostly done. It's totally treacherous because fundamental long term total demand just isn't there. Because the price is driven by synthetic factors the price structure is a house of cards. In comparison the gold market situation is inverse to that of silver. Gold is in a long term boring bull market. It's hard to say what the long term trend is in silver. The best guess is flat with wild swings generated by wild speculation.

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