Silver :Physical Vs Paper

The war is on, And the war is between Physical holding of silver vs Paper.Paper enthusiastic has always been the killer of the rising silver prices as most of you know the silver is a metal used both for industrial as well as monetary metal.

Let me give you what paper silver is and its problems !!!

Paper silver is a certificate issued by the bullion banks so that they can hold the physical silver and give you a paper certificate.But what happens if they are not storing the physical in thier vaults that they have promised over years which is nothing a big fraud.This is what SLV (Ishare Silver Trust) GLD (Ishare Gold Trust)

Paper market generally compromises of
Stocks
Options
Futures
Bonds
basically OTC (Over The Counter) derivatives values will be of no value or zero value once the system fails. Video below is what happens when holding paper assets.



Fundamental Numbers:



There is massive withdrawal of physical silver on comex warehouse. Before start of this year comex warehouse had a total of 100 million ounces most of which is registered.But now that no's have changed, And now most of the registered took the silver out of the comex for the eligible.Now we have only 28 million ounce left and if that evaporates at this pace then the comex will default by end of this year.So now what happens to paper silver and its value.That you have decide for yourself but the physical premium will jump 20% overnight.Okay now lets go to technical analysis

Technical Analysis

Silver




Silver daily is showing some weakness here and another sell call has just knock the door for the more downside.Its the paper silver folks so don't worry as they(bullion banks) wanted to shake the loose hands so that they can grab more physical silver out of you by selling paper silver.



Silver was and is on steroids based on the current economic woes. Silver will bottom around $28 based on the current play and will definitely challenge $50 again by end of this year.My long term target that I predict back in mid 2009 was spot on click for links below
http://gamatraders.blogspot.com/2009/09/watch-out-for-goldsilver-breakouts.html
http://gamatraders.blogspot.com/2009/05/gold-silver-dollar-and-treasury-bonds.html
it reached before my 2012 prediction.

Most probable scenario for the silver is that all the points i.e Fibonacci retracement of entire move from 2001 to 2011 which is 50%,the up trend green color of lower end channel shaded in white and down trend in red color all converging at $28 area.So I would call "THE BOTTOM" for silver and most probable price action would be in white color drawn on the above futures chart.

Once the precious metals starts their rallying by early 3rd quater we will see jaw breaking news in media by end of this year for sure.Hold your silver I mean physical holding only which will reap you big way in longer term.Once the selling is done, Are you ready for this crazy lift off ????



Silver cash also shows support around $28 area on multi year moving average cloud strategy on monthly chart.



Right now the inflation talk is paused based on market data and deflation is kickin in but this will not last much longer.US financial pillars are coming apart, And now in a process of defaulting on thier debts.Nothing has been changed or addressed so far on the future of the economy.So the downward spiral continues based on the market action.

Happy Day and Happy Trading.