Decision Time for Silver Investors?

by Roland Watson, Silver Seek:

What I will say comes with some reservation, mainly because the future is unwritten. However, based on the notion that markets will rhyme rather than repeat, I present a scenario in which a decision has to be made by silver investors in the near future. That decision is whether to hold onto silver, sell some of it or sell all of it.

This is not because I foresee this nascent silver bull being strangled at birth, but rather because of the nature of the silver bull. The problem is silver in the past 13 years has seen some volatile action followed by periods of inactivity. These periods can be so volatile that some silver investors may wish to reduce their positions at such a time. Contrast the two charts below which compare periods of silver volatility (first chart) against the same time window for gold (second chart).

Volatility implies not just the drops but the preceding run ups as well. Silver charges up faster than gold but is more prone to dropping off quicker than gold. To quantify this, I measured two parameters for gold and silver over notable periods of volatility for silver. The first is the percentage drop from peak to bottom and the second is the time it takes gold or silver to recover and exceed the given peak price in the ongoing bull market.

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