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Gold/Mining/Energy : Yamana Resources INC. T- YRI -- Ignore unavailable to you. Want to Upgrade?

To: kingfisher who wrote (1295)	6/5/1998 10:06:00 AM
From: PSkars	Read Replies (2) \| Respond to of 2346

R.Barbe, To answer your question, you have to go back and look at what's been happening to silver. Fundamentally, Silver warehouse supplies have been falling for years, now to the point of noticeable shortages...even with the shortages, the price of silver continued to fall because of the Central Bank Gold sales and the bearish position of fund managers and traders playing the old "the trend is your friend" scenario. As the silver shortage became obvious, the price of silver was at $4.18. At this point, some major players changed the course by buying everything in sight and taking physical delivery... Forcing a huge short squeeze to $7.80 (thank you Mr. Buffett!). From $6.00 to $7.80, you had a small panic blow-off in about a week (completely unsustainable), so the bears came in and sold the market off back to $5.00. So, where do we go from here? Well, IMHO, we will resume the uptrend but very slowly. The fundamental picture has not changed, and demand will continue to grow, forcing a new supply problem. Also effecting the most recent picture has been the unrest in Asia, as well as lack of physical buying (temporary) and the selling by Russia (cash starved) and on the brink of total collapse (another story). But most of this is the press hyping the markets. Technically, Silver has made a 62% correction (fubinacci number) and has found support at $5.00, as I suspected. The upward move will be choppy, but should be continuous in the longer term. For silver to make a next major leg up, it has to close above the $5.60 (50 day MA) and the $5.80 DTL (Down Trend Line). Any major change in the slowing of the economy, will slow the uptrend in the price of silver. (Any price movement below $4.90 will be reverse this assumption.) Another factor which will have a direct bearing on Silver is Gold. Gold is waiting for the announcement of the EUC as to the % of gold backing for the new currency. If this is anywhere greater than 20%, the market should "Rock and Roll", both gold and silver. One final point...Russia is a major factor in the PMG plays, as you have seen with Palladium. If Russia falls for any reason, the metals will take off, that is because Russia has been dumping everything they have to support their currency from devaluation. The US will throw Billions of $ to Russia to make sure that this does not happen...however, if Yelson falls for any reason, the choice will not be that of the US's.