Le Metropole members,
I am leaving Sunday Feb. 21 for Torreon, Mexico to
visit ECU Gold Mining's Velardena Silver Mine. I also
will be looking at another silver mine that has
potential. I will return on Wednesday night, Feb. 24.
Since we have so many new Cafe members, I have put
together a chronology of Midas du Metropole silver
commentary since Dec. 4 when the price of silver was
raided all the way down to $4.58.
The contributors to Midas believe that our commentary
on silver has been more right on than any other in the
world. Check it out for yourself.
Have a great weekend.
Midas du Metropole
Midas du Metropole silver commentary-Dec.4 till Feb.11
Dec. 4 - $4.78
Silver was finally mauled. With other commodities so weak
and the precious metals unable to overcome resistance,
the silver bears "worked the turf" and broke the back of
some short term silver bulls. The price got all the way
down to $4.58 in overnite trading on a blatant, bozo
raid play. Remarkably, silver clawed its way back to
$4.87 basis March today before settling back, but must
close over $4.90 spot to be respectable again. We
still remain bullish and think that this raid won
a minor skirmish for the bears and that is all. A
close above $5.00 is needed to hand the technical
baton back to the bulls…………….
Buffet and silver. Every time silver swoons, Buffet
selling comes up. We have told you in the past that
we were told by the horse's mouth last summer that
he was pleased that the price of silver stayed down
because the supply was being rationed off too cheaply.
This ( low silver prices ) will require a much higher
price down the road to ration future supply, than
other wise would have been the case. It is well known
that Mr. Buffet takes on these sort of investments with
a 3 to 4 year time horizon. Why should silver be
different? The silver stocks recently rose about 5
million ounces in the Comex warehouses to about
78,500,00 oz. ( still a very low number ). Knowing
his silver trader, he probably did that himself to
flush out weak longs and encourage the bear raid
that occurred. In rare fashion, silver rallied 30
cents from its Wednesday night low. Normally silver
does not do that after such a flush out. Would not
surprise us if wise ol' Mr. Buffet was standing
there with a silver bucket saying: thank you very much.
Dec. 9- $4.78
Silver has been in deficit for many years and the price
has really done nothing. Do not need our Café
commentators for this one. Yogi Berra good enough.
"It will go when it goes". In the late 1980's copper
remained in a severe supply/demand deficit for a long
time. Inventories ran way down. Asian demand surged
and all of a sudden the price of copper doubled in
9 months. Silver could easily do the same thing.
Dec. 11-$4.79
Silver was a big surprise this trading session. Of
the two precious metals, one would have thought silver
to be blasted as gold swooned. After all, it is also
an industrial metal and more likely to buried by
deflation play speculators. Not so. The price was
driven down during the day but came back at the end.
This is a very big plus and we consider it to be a
sign that a strong hand buyer is scooping it up. Silver
must clear, and close above, $4.87 now to hand the
technical baton to the bulls. It has failed to break
through that level 4 times. At 11.3%, the Indian
premiums remain robust. The bullish consensus in
silver is only 20. We remain bullish and think silver
will surprise the pundits.
Dec. 15- $4.88
The technicals in silver are very intriguing. Even
with yesterday's healthy 9 cent rally the bullish
consensus only rose to a piddly 22. Yesterday, silver
closed above $4.87. This resistance level thwarted
upward silver price movements 4 times in the previous
weeks. Now, we have eased through this resistance
and a bullish baton has been handed to the longs.
In addition, silver also has a monster technical base
with the same killer move down on the right side of
the base that gold made when it took out the $278 area
in August. Silver has no gaps to come back to fill
either. This may seem trivial, but it is a big, big
positive. Leaves room for a true breakaway gap some
day. The final completions to the base will occur
when silver first closes above $4.90 spot and then $5.00
spot. The price of silver is going uptown.
Dec. 17- $4.95
The same group went after silver causing it, at one
point, to give up all of its 19 cent gains that it
made yesterday. Silver has never traded like this
ever before ( see below ). However, silver has strong
hand sponsorship and was able to fight its way back
and eventually only gave up half of yesterday's
powerful move. Yesterday's spot close was the highest
in many months and registered a clear break out. At
least, that would have been a reasonable technical
comment when the precious metals traded free from
government sponsored, market capping bullies. Even
with yesterday's run up, the Indian premiums held
at 8.7% which is still ample enough to encourage
imports to India. The Comex silver stocks at
76,869,118 ounces are at historically, very low levels.
We remain very bullish on silver.
Jan 4- $4.93
Silver really took to the bomb shelter and arbsorbed an
early 16 cent battering, but actually managed to come
half way back. If the silver market was in a bearish
technical condition, this would not have occurred today.
The $4.86 to $4.88 area is one of strong support and it
held like a rock. Resistance is anything above $5.00.
That is when the "squad" comes out selling. They have
done so three times over the past months.
Jan. 7- $5.23
Silver has been on a roll since our last Midas when
it closed at $4.94. Today, it traded as high as $5.35.
That is a decent start towards our big picture
objective of $9.78. The first major resistance shows
up between $5.50 and $5.65. The bullish consensus
jumped but is still a very modest 48. The base in
silver is massive and the shiny, white metal has
clearly broken out to the upside. I am sure the point
and figure counts can show support for a move to $9.78
in time. All this action below $5 means that too
much silver was rationed off too cheaply. It will take
a much higher price to ration future silver supply than
it would have if silver moved earlier. That is what
the silver point and figure counts tell you. The area,
or breakaway gap, at $5.04 should hold.
Jan 12- $5.23
Silver sold off, after closing higher 5 days in a
row. It probably would have closed up again if gold
was not battered. Last night, silver was 5 cents
higher when the Japanese pulled a sneak attack on
their own yen. A week ago, when the price of silver
was $4.94, we said we thought it looked "sold out".
The price is now 30 cents higher. We still think
the same way and it appears to us someone is to
trying to buy silver in size. This market is explosive.
Even though the price of silver rallied sharply,
the premiums in India remained very firm at 8.2%
as of this A.M., which is adequate for importing
silver into that country. After the close, a report
was issued by the CFTC showing that the silver
stocks dropped 628,656 ounces and now stand at
only 76,275,457 ounces. $9.78 is our target by
year end. Only a close below $5.00 can derail
this "Silver Streak" ……..
Thus, some food for thought. When silver broke a
few weeks back to $4.58 and then rallied back, we
said it was "bozo" selling, but that the bear raid
effectuated a killer move that cleared out stale
bulls. Ever since then, the price of silver has
performed very well ( in noticeable contrast to gold )
as it rallied over 80 cents. Right after the raid
occurred, we told you we would not be surprised if
Buffet's broker, Jimmy DePiazza, engineered the silver
price breakdown. We felt he would do so to set the stage
for the real bull move.( more on this some other time ).
Jan. 22-$5.09
The silver market is just marking time. We see a violent
rally up to the $5.80 area in the works. The bullish
consensus is a modest 50 which is healthy for a break
out market. The silver base is a big one and can support
a rip roaring move to the upside. The Comex silver stocks
are only a very low 75,435,680 ounces as they continue
to disappear.
Jan. 26-$5.105
Silver is Mr. Seesaw- trading between $5.05 and $5.21.
It is still my opinion that the silver market is
displaying price action that indicates an upward price
explosion is in the cards in the very near future.
For the fourth time in recent trading sessions over
the past couple of weeks, silver was sold off fairly
sharply, but closed well off its lows. As we have
said before, a bearish silver market would close on
the lows, open, a penny higher, and then go south.
This silver market has not been doing that. The Indian
premiums remain very firm at 10.9% which is ample for
imports into that country. We also hear from first hand
observations that silver coins in Canada are in very
short supply. We still see a sharp move up to $5.80 in
the near term.
….In stark contrast, the silver lease rates are
trending up a bit. This is consistent with our
reporting to you that the silver market is very,
very tight. We continue to pound away that theme
to you in the hope that it will sink in. If the
silver lease rates continue to trend up, many shorts
will decided to run for the hills. When that occurs,
we get a spike to the upside in the silver market.
3m silver lease rates have risen to 3.15 from 2.4
early in the new year. 1m silver has risen from 90
basis points to 1.25 basis points.
Feb.1- $5.55
The silver market is explosive. We have tried to
make this point over and over so that our strong
opinion on the future price of silver would be
clearly made. The trading action is classically
bullish and there are no gaps to fill right below
the close, which is a big plus. The only gap that
is out there on the downside, is the breakaway
one at $5.04. Four times the past couple of weeks
silver plunged below $5.08, but it could not
close this gap. This is a very bullish clue that
a major player is accumulating silver. One more
tailtale sign that we should see some silver firework
s very soon- silver is now closing on its HIGHS,
while on the sell offs, it closed well OFF its lows.
The lease rates exploded today ( see below ). The
Indian premiums remain firm, indicating good demand
in that silver devouring country and today the price
of spot silver was the same as silver priced for
March delivery. We might go into backwardization
( nearby prices greater than forwards ) which
would be very, very bullish. The Comex silver
stocks dropped again today and now stand at
75,016,717 oz. Our near term target of $5.80 is
looking better and better and our longer term
target of $9.78 by year end will be looking better
and better very soon. We know of few others that
are this bullish on silver
………..The silver lease rates shot up dramatically
today. Overnite, the one month rate jumped rate
jumped from 1.20 to 2.59 and the 6 month rate shot
up to 4.08 from 3.10. This is very good news for
us silver bulls. The "silver streak" has left
the station and is now picking up speed. Very
simply, this means that the silver supply situation
is tightening and that news is significant for the
bulls and scary for the bears.
We have been pounding the table for weeks now about
silver. There is talk around the silver pits that
the"Buffet silver followers" have been buying. We
do not know about that, but we have alerted Midas
followers ever since silver was bombed down to $4.58
that we smelled something was up. On that day, Midas
said he would not be surprised that the bombing of
the market was orchestrated by Jimmy DePiazza, who
is Buffet's silver broker. A pro like that would
do so to clean out all the stale longs by setting
off the stops. It also would attract computer system
shorting. Then he could open up the bread basket to
buy all he wanted for Buffet and his friends. All
totally legal- and smart.
Then when silver was trading around $4.92, we alerted
you to the fact that it appeared to us that a big
player had entered the silver game and was clearly
accumulating it. We have also noted how strong the
silver premiums are around the world. The dramatic
jump in the lease rates has put the silver shorts
on notice that they may be in big trouble. Are you
listening Mr. Martin Armstrong?
Feb. 3- $5.55
Yang silver is trading very powerfully and appears
to want to streak much higher. Our short term $5.80
target could be achieved any day. Our year end
target of $9.78 does not look so preposterous any more.
The big news is the lease rates, which we have
spotlighted for you in previous Midas commentary.
The one month rate is now 3.53- up from 1.20, then
2.59. The six months rate is now 4.75- up from 3.10,
then 4.08. These are dramatic short term increases.
It is important to note that the one month rate shot
up 95 basis points today while the six month lease
rate shot up 35 basis points. That means the silver
market is getting tighter and tighter, as we told
you it would. Those that borrow short and lend long
have to be very nervous right about now as the near
term rate is accelerating even faster than the more
distant rate . The pricing of the market now also
tells us that the shorts are in big trouble. Spot
silver today closed over one penny higher than March
did, which means the market is in backwardization.
It is that type of telltale indicator that trumpets
our opinion that an upside price explosion is in the works.
………………All of a sudden the silver pundits ( analysts )
are talking about the fundamentally bullish silver
situation. We read all the reports and saw none of
that talk when the price of silver was below $5.00 As
a matter of fact, Midas Jan. 14 commentary in "the library"
lists the silver year end price predictions of all the
big analysts in London. The average forecast by the
lot of them was around $5.25. The highest was $5.70.
Then, there was the Midas forecast of $9.78. Too early
to tell who will be right, but silver is running away
to the upside all by itself. Where do you think the
price of silver will go when the price of gold soars
in the months to come?
I think it is important to realize that silver has been
a bull market in the making for many years. It just never
materialized. That means, it is MUCH MORE explosive
than your basic metals analyst appears to understand.
That is why our price projection is almost 50% higher
than all the others that were interviewed
Feb. 8- $5.61
Silver hit our near term target of $5.80 with
lickety split speed. It reached that level so
quickly, it became technically overbought for
the short term and the recent price set back is
perfectly natural. The lease rates are still very
firm indicating that the supply of silver is very
tight. Word is that Merrill Lynch is trying to
get hold of 1,000,000 ounces of silver and is
having trouble doing it. There are more fireworks
for this market to the upside. Our target for $9.78
silver by year end is looking better and better.
……..All of a sudden everyone is trying to figure
out what is going on in the silver market. Mega
bear Martin Armstrong made statements to the press
today how Warren Buffet has not done that well
with his foray into silver. The notorious egomaniac,
Armstrong, suggests that Buffet is stuck with
the silver and that Buffet followers will be
left holding the bag on this supply/demand play.
It strikes us that Armstrong does not mention that
Buffet's typical investment plays are 3 to 4 years
which leaves plenty of time for this one to work
out very well. Ironically, Buffet is making a
nice profit on his silver play from what we can tell,
while Mr. Armstrong is sucking wind and losing money
on his silver shorts. I would love to ask this
notorious silver bear how he plans to cover his
positions when the price of silver soars?
When the price of silver tumbled last fall to
$4.58, Midas suggested that day it could have
very well been a bear raid, orchestrated by
Buffet's broker to set up the market for a big move up.
Silver just rallied 80 cents very quickly. Yesterday,
the Comex stocks went up a little over one million ounces.
That would be a typical move by Buffet's trader-
to have sold into the move up in the $5.70's, put
some silver in the warehouse to scare out some longs,
and then buy back his position on the dip.
Feb.11- $5.55
Last night, Midas received a call from John Brimelow
that someone was noticeably marking down the silver
price in Australia. Someone wanted to make it appear
that the price of silver was about to fall out of
bed- as it was announced in the late afternoon that
the Comex silver stocks had gone up some 600,000 plus ounces.
In the last Midas, after noting that silver hit
our short term $5.80 target almost to the penny,
we suggested that silver was technically overbought and
corrective action would be natural. We also suggested it would
not be the first time a big time trader, who was
in fairly good control of this market, sold some
of his position as the price approached the $5.80 area
and then put some of his physical silver into the Comex
warehouses to make it look as if the silver market
was weakening. Our guess was that after Mr. Strong
Hand knocked out some weak hand specs, this big time
operator had a plan to buy back the part of his
position he sold. Thus far, we must say, that is
exactly what it looks like is happening.
If our own assessment is on target, the silver setback
has basically run its course and, after some backing
and filling, we should see new highs for silver in the
weeks to come. We still see $9.78 by year end.
----------------------------------------
Spot silver closed at $5.65 on Feb. 12.
Some lease rates have now shot up to over 6 %.
$9.78 silver by year end is our silver price projection.
We remain steadfast to that call
Midas du Metropole-http://www.lemetropolecafe.com
|
