SLV has had a long good run, I’m up 42% since 09/08/10 when I bought the ishares at $19.5499. Now I’m ready to sell.
Options trades are now showing concerns about silver. Bearish puts on the iShares Silver Trust (SLV) are at unusually high levels, according to a new report by Brendan Conway for Dow Jones Newswires.
Day two of the correction in metals with gold down nearly $30 as of this post and silver retreating by almost 5%. The saying goes that metals take the escalator up and the elevator down.
“The market fears that the increase in Treasury yields will soon push real yields back in positive territory,” says MF Global precious metals analyst Tom Pawlicki. “The developing trend of higher stocks, dollar, and yields signals economic growth. That would take away the need for previously bullish drivers like safe-haven or more quantative easing.”
Another reason for selling SLV is China and what they plan to do with interest rates. If they do raise interest rates, as expected, that could slow investment demand in precious metals.
Downside risk has been above average. SLV has a draw down risk of -95.13%, which is the largest price decline experienced over the last three years. – Source: The Street Ratings