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« Silver Wheaton Corporation on the Acquisition Trail! | Main | Hecla Mining Company beaten up! »

Silver: On the rack!

Silver Chart 03oct08

Silver was well and truly mugged today losing $1.65 or 12.92% in just one days trading. Silver was dragged down with gold and the general demise of the base metals along with the uncertainty of the mega dollar bail out. The bail out proposals have now to get past the House of Representatives which many see as a given this time around, well, we will know soon enough.

Silver stocks were also victims of today’s rout with many of them recording losses in the high teens; a gut-wrenching day if ever there was one! However, history tells us that silver makes slow and steady progress when heading north but the corrections are sharp and severe when heading south.

Our take on this situation, for it is worth, is that we will continue to experience extreme volatility in both directions. This is nerve racking for most of us but to some it will present unbelievable buying opportunities, especially for fast moving options traders. So our short-term plan is to hold fast to the stock that we have as this forms part of our core position and also to search the wreckage with the view to spotting the quality severely oversold silver stocks and snap them up.

So stay on your toes, as we may have to move quickly.

Have a better weekend.

If you are new to investment in the precious metals sector then you may wish to subscribe of our FREE newsletters regarding gold stocks, silver stocks and uranium stocks, just click on the links.

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Reader Comments (6)

Thanks for your views it's comforting to read. Am a great fan of silver and hold big positions in mainly Hecla, Gdx and slw. Am suffering through this ongoing sell of as have over leveraged myself, resulting in a margin call of $15,000 to cover today by close of market. Am finding it hard to understand why silver price in the paper markets is so cheap especially considering the physical demand for coins and bars recently. Silver is a monetary metal and an increasingly important industrial metal why is it not been valued accordingly? Especially in this environment with talk of U.S on the brink, bailouts and depression! The gold/silver ration is 73 to one for goodness sake! Am confused by the markets logic silver heading down back towards it's 52 week lows is crazy it should be pushing 52 week highs the dollar rallying and the stock market falling. Am feeling the strain........

October 3, 2008 | Unregistered Commentertom

I just purchased more SSRI. My play is that the House passes the bill today and all stocks take part in a celebratory Friday rally. I will then sell what I bought today ata profit to help recoup some of my losses from the past weeks.

October 3, 2008 | Unregistered CommenterObiwan

I heard your predicament, Tom. At least you tried your hand at it. Most people will never know the agony and ecstasy of taking such a brave risk. I am amazed as well. This should have been a slam dunk as far as options and futures are concerned, but I am convinced these markets operate like the old London gold pool did during the 60's. To quote a prominent analyst/commentator, "We don't so much have markets as we do interventions." Futures and options markets at one time were places where canny individuals could make honest bets in a community of gentlemen and gentle-women. I had seen a doctored COT report that never mentioned the huge positions of the some banks this summer. I suppose the best way to handle this market is to hedge your bets and then unwind the bet that comes a cropper so as to max the good bet.

October 3, 2008 | Unregistered CommenterDavid

Re TOM (Oct 3 at 1.59) Go to and read Ted Butler's latest column and you will know all about the manipulation of the silver market by the banks...and then go buy more silver !

October 4, 2008 | Unregistered CommenterHamish Kerr

just hang on in there tom,this could well be a short term correction.i think soon enough,after the bailout has settled in and people realise that 800 billion isnt the answer,you can be in a much better position!

October 13, 2008 | Unregistered Commenterpeter

Thanks very much for all the support I really appreciate it. Eventually lost alot more than 15k. Totally miss timed the market, thought gold/silver would be ok didn't realise they would be sold off in the panic selling. Am alive and fending of the margin calls. Am now faced with what looks like one of the biggest buying opportunities in history with few funds to position. Am taking on more debt to buy gold/silver hand over fist. Have missed the biggest weekly decline in the Dows history I do not intend to miss the dollar crash, hyperinflation and return to real money. Annoyed with myself as if I had held my positions in inverse ETF'S I held 2 years ago would have the reverse problems today. Almost feels delibrate!!! Subconcious???

Am slightly apprehensive about holding ETF'S as the LSE stopped trading 113 ETF'S backed by AIG for 3 days including gold/silver leveraged etfs I hold. Could the Physical backed etf's be confiscated or stop trading because they are backed by banks/companies???

On a side note am feeling slightly mentally unhinged. All my work collegues, friends and family seem to be blissfully unaware of the upheavel we are about to go through to restore order to our money. Even when you try and explain it they are not interested, don't care or think your mad. It's maddening!!!!!

October 14, 2008 | Unregistered CommenterTom

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