Tuesday, February 22, 2011

Silver Prices, Silver Wheaton (SLW) and Silver Correction

For those unfamiliar the with silver prices and the silver market, it is far more volatile than gold, and can take some big swings, which can spook the uninitiated, and result in them losing money because of fears coming from those big price swings.

Silver has to be held onto during these times, as historically it's the way it performs.

What is unique to silver price swings recently is it dived by over 13 percent, and under normal conditions it should have bounced back some, and then plummeted even lower; at least by historical standards.

The fact that it didn't happen and surged past the $32 an ounce mark, is unique, and could be a precursor to a huge upswing. If that's the case (and it probably is), Silver Wheaton (NYSE:SLW) will move up in price with it.

Why it's important to note the lack of a secondary drop in price is those waiting for silver to do that will probably find themselves chasing the price, as it appears it has bypassed that and already began to surge upward.

So for those waiting for it to drop, it could mean losing significant opportunity; not only in physical silver, but in companies like Silver
Wheaton or iShares Silver Trust (NYSEArca:SLV).

What all of this means is silver appears to be stronger than it's been in decades, and past swings may not be the behavior of silver prices in the future. Remember, we're referring to the secondary drop, not an initial drop in the price of silver.

Now that the $32 an ounce mark has been breached, we could see silver challenge it's all-time high. Silver Wheaton will take the ride with it, no matter how high it ends up going.

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