The old merchant wisdom that profit lies in purchasing also applies to the financial markets, of course. Here, too, those investors who can acquire an asset cheaply are at an advantage. Thanks to the lower purchase price, the investment not only moves into profit more quickly, but this profit is also proportionally higher in the end if it was possible to buy at a favorable price beforehand.
For this reason, many investors are always waiting for price corrections, because they see in them a more favorable entry opportunity that they would like to take advantage of. Some even go so far as to long for a tangible, but fundamentally completely unjustified crash. It initially causes prices to fall quickly and deeply, but then, when it turns out that the whole price theater was completely exaggerated and unjustified, they also rise very quickly again.
A more intensive look at the charts also shows again and again across all stocks, commodities, bonds and currencies that corrections proceed much faster than the preceding increases. This very often leads to corrections being completed after only one-third of the time that the previous increase had taken.
With silver, everything is currently happening extremely fast
Silver is no exception at this point. Here, too, the usual patterns are evident in the charts. Currently, however, it is noticeable that price declines and corrections are not of long duration. For example, the two increases in margin requirements made by COMEX in late December immediately led to falling prices in both cases. However, these price declines were immediately bought up again and today the price of silver is trading at levels that are far above those prices that were paid at the time of the margin increases.
This is absolutely unusual, because both in 1980 and 2011, as a result of the margin increases at that time, the price of silver not only entered into a significantly longer correction, but in both cases a bear market developed over years, which led silver in its course to extremely low levels, which were more than 50 percent below the highs at that time.
A few days ago, another attempt was made to break silver’s neck in this way. So far, however, without any resounding success, because the corrections that we have seen in the past three weeks have been extremely short and anything but deep. The well-known Canadian silver investor Eric Sprott was already prompted by this observation to conclude that the power of the banks over silver has been broken.
If Eric Sprott is right – and there is much to suggest that he is – not only is a new year beginning for the price of silver these days, but a completely new era.
