Risk-Off Has Changed the Rules
Now traders are dealing with an uncertain Fed and a risk-off situation across all speculative markets, which points toward lower prices and a return to more traditional fundamentals. Instead of looking to come in every day to take out offers, investors are now hunting value.
Long-term investors have seen what silver can do after a 46-year wait, so they are the patient ones. The short-term guys have to think now with little momentum to the upside, so they have lost interest. But they will probably be back once the market finds value and stabilizes.
It is just a different game right now than it was during that explosive December and January time period. The rules have changed but good traders adapt, so be patient.
Deutsche Bank Drops a Number, But Don’t Read Too Much Into It
CNBC covered it so I thought I would mention it. According to CNBC, Deutsche Bank analysts said in a note published Tuesday that silver was trading $7 below its real adjusted price in 1790, after prices fell in the morning.
First of all, it is not a forecast. It is just a statement with historical context. It does not tell us where silver should trade tomorrow or next week. It is telling us that silver is at a discount to long-term purchasing power history. It could be attractive to dip buyers or to computer traders searching for historical value anomalies.
One More Piece of the Value Puzzle
Essentially it supports my idea of value hunting. It is restating what I wrote earlier about traders searching for value. It is just another piece of the puzzle.