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moneymetals

Silver Threads among the Gold: What the Tea Leaves Seem to Be Telling Us

The ongoing July silver (and gold) slam has a 2008 feel about it. Important data point elements are different, but there's an air of panic on the part of physical precious metals' owners.

"Major trend lines" being broken to the downside; physical metals' buying (in the U.S. off significantly so far on the year; (some) long-term silver holders giving up the ghost and selling their metal below spot.

About the only thing we have yet to see – on a large scale – is "paper metal" being offered at a price well below what a customer would actually pay for the physical.

In late 2008, while silver was being quoted in the markets at $9.50/ounce, you simply could not find it in "real life" for much less than $12 the ounce.

How Might George Soros Approach This Situation?

In a recent interview for The New York Times Magazine, George Soros talked about his years' running the very successful Quantum Fund – which yielded investors an almost unheard of 40% annual rate of return.

He spoke of his "theory of reflexivity" – the idea that "peoples' biases and perceptions can move prices in directions that don't accord with the underlying reality."

He would "nibble" on an idea until investors' emotions became increasingly disconnected from what was really taking place – or what was almost certainly slated to be – once more balanced circumstances had come to pass. Then he would substantially add to his position.

Soros didn't always get it right, but when he did, he made a killing. His most famous bet was shorting the British pound... against the Bank of England.

Soros claimed his strength as an investor was in recognizing and acting on what he referred to as “far from equilibrium” moments.

SGE silver delivery volume chart

Shanghai International Gold Exchange silver volume continues to rise sharply.

A Technical Take

As for near-term action, Hidden Pivot maven, Rick Ackerman wrote recently in his Rick's Picks column, that silver has the potential to make a large move either up or down, depending upon what the price does on the hourly and monthly charts.



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