Monday, August 1, 2011

Pecking order, indeed



9:45 pm (Hawaii) Sure, silver's gain this year is matched by few commodities or stocks. But gold's behavior in the past week has been almost unaffected by Capitol Hill hooligans, while silver has struggled. Certainly, the recent run from 34 to 41 in silver warrants a breather ... but in the big picture, silver is consolidating here after the bigger run from 19 to 49. In that sense, it's simply struggling to put in a serious run into the 40s again. For whatever reasons.

Tonight's activity in gold and silver overseas shows, once again, some divergence. I continue to be long DGP and XG, long no paper silver, and long physical in both metals. And I'm still holding ZSL, just a little. I considered going deeper with ZSL, but really, it's pointless. The small position is an insurance policy while my core outlook is that silver advances higher as we get closer to 2012.

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